CMS Puts the Brakes on 2005 Oxygen Fee Announcement

Baltimore

Oxygen claims will be put on hold for the first few weeks of the new year as home medical equipment providers wait for Medicare to issue the 2005 home oxygen fees.

The reduced reimbursement rates were scheduled for release in mid-December, but CMS put on the brakes so that additional data could be reviewed before the fee schedule was computed. At press time, the HHS Office of Inspector General (OIG) was expected to submit its additional analysis on reimbursement for oxygen to the agency by Jan. 15.

Although further analysis should result in more accurate oxygen payments than OIG had originally recommended — something the industry has called for loudly — the delay will force Medicare to hold stationary and portable oxygen claims submitted starting Jan. 1, 2005, CMS explained.

The agency said that if information from the OIG is received by Jan. 15 as expected, the claims should be processed by the end of the month. The notice affects HCPCS codes for oxygen and oxygen equipment (E0424, E0439, E1390, E1391) and portable oxygen equipment (E0431, E0434).

The move to examine more data has brought praise from industry stakeholders, who had questioned the OIG’s methods in data collection. “We are very gratified that CMS and the Office of Inspector General are willing to refine their analysis of oxygen pricing,” said Kay Cox, president and CEO of the American Association for Homecare.

A 2004 study commissioned by AAHomecare found only small differences in oxygen reimbursements between fee-for-service Medicare and Federal Employees Health Benefits Plan pricing, on which 2005 rates are mandated to be based. In a September report, however, OIG recommended that CMS cut oxygen payments by 10 to 20 percent. But the report did not distinguish between managed care and fee-for-service pricing, creating an “apples-to-oranges” comparison, industry-watchers said. It also did not account for, among other things, certain codes required by some federal plans to bill for oxygen contents. To ensure 2005 rates reflect FEHBP median pricing, OIG said it is seeking clarification.

“For the independent provider, [the announcement to delay] is a big thing,” said John Fell, director of Aspirus Home Medical Equipment, Wausau, Wis. “We can’t compete on volume. If those prices that [the OIG originally] proposed came to reality, then a lot of independents would be looking to sell. I’m optimistic about what this could mean.”