Industry: Wrong Answers on Oxygen

BALTIMORE — For months, providers and other industry advocates had been asking CMS for guidance on numerous issues surrounding the 36-month oxygen rental cap, which becomes effective Jan. 1. Late last month they got some answers, but far from those they were hoping for.

The new rules stipulate that HME providers with oxygen patients on service in the 36th month are required to:

• Continue to provide the equipment to the patient at no additional charge during any period of medical need for the remainder of the useful life of the equipment, including periods that may occur after a 60-day break in service;
• Continue to provide oxygen contents to the patient for the remainder of useful life of the equipment. Providers can charge for the contents; and
• Arrange for oxygen equipment and oxygen contents with another supplier if the patient relocates outside the provider’s service area. The new supplier cannot charge for the equipment, but can charge for the contents.

(The five-year useful life is determined based on when the equipment is first delivered, not the age of the equipment.)

According to the rules, the provider is responsible for — but will not be paid for — maintenance, servicing and repair of oxygen equipment. For 2009 only, Medicare will pay for 30 minutes of labor once every six months (beginning six months after the 36-month cap) for routine maintenance and service actually performed on oxygen concentrators or transfilling equipment in the patient’s home.

No payment is available for repair or servicing of gaseous or liquid oxygen equipment.

Regs Are ‘Alarming’

In a statement issued shortly after the regulations were released, the American Association for Homecare labeled Medicare’s new regulations “alarming” and “wholly inadequate.”

“Once again, CMS has discounted the important role that home care providers play in provision of care to Medicare patients on home oxygen therapy,” said Tyler J. Wilson, the association’s president and CEO.

“The rules released by CMS … underscore the fact that the current Medicare oxygen policy is seriously flawed and changes are needed in order to make the oxygen benefit more focused on patients and the services they require.”

AAHomecare said it expects a third of all Medicare home oxygen patients will be affected.

“In many cases the rules will be unworkable,” added AAHomecare’s Walt Gorski, vice president, government relations. “Maintenance and service payments are a key issue, and a second issue is how episodes of unscheduled emergency service will be handled. Another is payment for supplies — i.e., there is not any past 36 months.”

And, Gorski continued, “we’re concerned about patients who move or whose supplier [discontinues service after the cap]. They are going to have a terrible time finding an oxygen provider.

“The provisions included in this rule do not reflect the real-life circumstances that beneficiaries will find themselves in.”

Lots of Questions Remain

Mandated by the Medicare Improvements for Patients and Providers Act, the oxygen regs were included as part of a 1,459-page final rule for Medicare’s 2009 Physician Fee Schedule, which was to be published in the Federal Register Nov. 19.

There is a 60-day comment period, but even that is unrealistic where both patients and providers are concerned, according to Rob Brant, president of the Accredited Medical Equipment Providers of America.

“How can they have a comment period that ends [Dec. 29]? When are those comments going to be addressed and digested, and when are any changes based on those comments going to be implemented when the new rules are going to be effective Jan. 1?” Brant wanted to know.

He asked that question and others about the regulations of CMS’ Christopher Molling, who is listed as an agency contact in the rule document. “He couldn’t answer that question,” Brant said.

“We always knew [CMS] would try to put us on the hook for doing the fills and also to do the maintenance, but we didn’t think they would make it so unrealistic.

“I just think it’s ridiculous for them to set up payments like this … They also use the word ‘must’ when they say a provider ‘must’ make arrangements with another supplier if a patient relocates. What if you can’t find a provider out of state that’s going to do the refills? Why would they?”

CMS Undervalues Providers

A statement from the Council for Quality Respiratory Care, a coalition of many of the nation’s largest home oxygen providers and manufacturers, also expressed “extreme concern and disappointment” with the new regulations.

“Of acute concern is CMS’ decision to provide no reimbursement to providers who respond to patient-generated requests for non-routine services. Non-routine home visits often are triggered by beneficiaries experiencing clinical and equipment-related problems. CMS is undervaluing the important role that home oxygen providers can and do play in preventing costly beneficiary emergency room visits, acute care admissions and avoidable physician intervention,” the CQRC said.

CQRC members include AirSep, American HomePatient, Apria Healthcare, DeVilbiss Healthcare, Invacare, Lincare, Pacific Pulmonary Services, Praxair, ResMed, Respironics, Rotech Healthcare and Sunrise Medical.

“CMS has taken an alarmingly restrictive position regarding the services that beneficiaries on home oxygen require — the random after-hour service calls, the need to troubleshoot when a frail senior needs help and many other instances which require the provider to incur real costs,” said Cara Bachenheimer, senior vice president of government relations for Invacare, Elyria, Ohio.

“Further, the requirement to continue servicing the beneficiary when he/she moves outside your service area is wholly unrealistic.”

Regarding non-routine maintenance, Bachenheimer noted, CMS states in a preamble to the rule that “it is not reasonable and necessary to pay for non-routine maintenance and servicing (including repair) of supplier-owned oxygen equipment. Given that the supplier owns the equipment, we believe that the supplier should be responsible for maintaining their equipment in working order as they did during the 36-month rental period.”

Citing a September 2006 OIG report that found 78 percent of beneficiaries do not reach the 36-month cap and the $7,174 that suppliers receive for 36 months, CMS said the supplier should be responsible for absorbing the cost of non-routine maintenance and service after the cap period.

“We will be working aggressively with CMS and Congress to improve these new rules,” Bachenheimer said.

What to Do?

An analysis from VGM Group noted “the provisions regarding 60-day notice to the patient concerning whether the supplier can continue to service the patient and/or provide oxygen contents after transfer of title have been deleted. A participating supplier should consider becoming non-participating in order to charge the patient for oxygen contents at its ‘usual and customary charge’ rather than having to take the Medicare allowable.”

As for other action providers can take, the Waterloo, Iowa-based member services group wrote on its Web site:

“It is absolutely imperative that providers and their patients contact their legislators between the Nov. 4 elections and Jan. 1 to let them know that this policy is unworkable and unsustainable. Congress must know that CMS has no concept of oxygen.

“Payments are not just for the equipment; it is also for servicing the oxygen patient. Beneficiaries are going to end up in the emergency rooms, and that will represent a tremendous cost shift.”

According to provider Todd Tyson, president of Hi-Tech Healthcare in Norcross, Ga., “My general impression right now is that [CMS has] had a lot of time to think about this — since January of 2006 — but they waited till 60 days prior to the cap and I don’t think they put very much thought into it.

“[The rules] seem very short-sighted. I can’t imagine they could expect any business for profit to continue service this way … you don’t need to get rich but you do need to make a living,” Tyson said.

“There is no way that I could provide service for a patient for an additional two years [past the cap period] if they left my service area. I don’t know who could. If these rules go through as they are, I think people will not be prepared for it.”

Tyson said the situation is certainly no joke, but he used one to illustrate his point: “If I’m serving a patient Jan. 1 and they tell me on Jan. 2 that they are moving to Alaska … then I might just have to call Ms. Palin and ask her what I’m supposed to do. We might have to build a bridge to Alaska.”

Don Clayback, vice president, government relations, for The MED Group, Lubbock, Texas, summed up providers’ plight:

“The released regulations are extremely disappointing,” he said. “How does CMS expect a provider to continue to provide 24/7 support for oxygen dependent beneficiaries with no payment? How does a provider perform two in-home maintenance calls on an annual basis for a total payment of $60?

“How is a provider in Pittsburgh responsible to provide equipment to a beneficiary who moves to San Diego and not receive any reimbursement? How can a provider supply a product that is used 24 hours a day and get no payment for required repairs over a five-year period?”

What’s more, he said of the 60-day comment period on the new regs, “How does CMS publish rules with a comment period that ends two days before the regulations go into effect? What kind of input is that?

“Unfortunately, the provisions show a real lack of understanding as to the services a provider gives to a Medicare beneficiary. They also show a lack of an even basic regard that businesses cannot provide services with no reimbursement,” Clayback concluded.

“The industry will have to work through both CMS and Congress to get these ridiculous issues fixed so that there are not major problems for oxygen patients in January.

“This has been an ongoing battle with CMS, and we are now entering into another round.”

Get the Details

CMS included the new oxygen regulations as part of its 1,459-page final rule for Medicare’s 2009 Physician Fee Schedule. The rule was to be published Nov. 19 in the Federal Register.

For an excerpt, visit AAHomecare’s Web site at www.aahomecare.org.

For highlights and commentary on the new rules, visit VGM’s Web site at www.vgm.com.