Patient-Centered Oxygen

Over the past several years, the American Association for Homecare has participated in the development of a proposal that would reform home oxygen policy under Medicare in order to achieve a number of important goals: 1) restoring reimbursement for oxygen equipment and services so it parallels medical necessity (thereby eliminating the artificial 36-month cap); 2) removing oxygen from competitive bidding; and 3) elevating the status of oxygen suppliers to “providers.”

Discussions about the need for oxygen reform reach back to the middle of this decade, but the pattern of continuing oxygen cuts has made reform an increasingly urgent issue for HME companies. Oxygen patients and their providers need a Medicare policy that is fair and realistic. The timeline for oxygen reimbursement should be based on medical necessity and align more closely than it does today with the true costs of providing the equipment and services integral to the benefit.

Oxygen providers face several hurdles. In some influential corners of Washington, false perceptions about oxygen persist. In essence, the thinking has been that Medicare pays too much for oxygen, consumers can buy oxygen cheaper online or the oxygen sector is rife with fraud. Each of these misleading and erroneous ideas requires a full rebuttal, beginning with a few simple facts.

Done correctly, oxygen therapy provided to Medicare beneficiaries at home involves many services. Medical oxygen is a prescription drug. At less than $7 per day, oxygen therapy is vastly more cost effective than trips to the emergency room. Or the hospitalizations that would result if the nation’s network of oxygen providers were squeezed to death by rock-bottom reimbursements based on a policy that recognizes only the equipment and not the related services.

So the oxygen community has a two-fold task. We must educate lawmakers about the true nature of oxygen therapy. At the same time, we must elevate the importance of the issue and convince Congress to change Medicare policy for oxygen.

Given the federal budget pressures, a reform plan stands a better chance of meeting the acceptance of Congress if it is budget-neutral, meaning that net total payments by Medicare for oxygen will neither increase nor decrease. Under the reform plan being developed, that means payments may go up or down for each provider depending on the mix of patients, but the overall financial impact in terms of government spending on oxygen would be flat.

This result may stave off more oxygen cuts and is vastly preferable to continued reimbursement hits year after year, which will decimate the nation’s infrastructure of home oxygen providers.

Only Congress has the authority to make fundamental changes to oxygen, unlike the post-36-month-cap payment rules that can be addressed through CMS. While involved in a longer-term oxygen reform plan, AAHomecare continues to work with CMS to improve the recently released rules.

The reform plan outlined by the oxygen community would include a variety of changes to shift the benefit away from its current focus solely on equipment. Oxygen providers will be required to evaluate patients and participate in their care planning, provide beneficiary and caregiver education, supply 24-hour on-call service coverage and provide patient education and assistance.

Providers would be paid according to case-mix adjusted reimbursement rates. Rates would include annual updates, adjustments for outlier payments and geographic wage indexes, rates periodic rebasing and adjustments based on factors such as the patient’s ambulation level, liter flow, modality and mental acuity.

Home oxygen providers would facilitate retesting for certain Medicare beneficiaries who are prescribed oxygen after hospital discharge, and the data would go directly to a physician or independent diagnostic testing facility. Retesting would not apply to patients with certain chronic conditions such as COPD, emphysema, obstructive chronic bronchitis, brochiectasis, pulmonary fibrosis and Alpha-1 antitrypsin deficiency.

These sweeping changes seek to improve the deeply flawed existing benefit.

Tyler J. Wilson is president and CEO of the American Association for Homecare, headquartered in Arlington, Va. You can reach him at [email protected]. For more information on critical home care issues, visit the association’s Web site at www.aahomecare.org.