New Provision Would Cap O2 Rentals at 36 Months

Washington

In a surprise move, a provision that would cap Medicare oxygen equipment rentals at 36 months was added to the nation’s budget bill late in its consideration.

Under the new provision, which was tacked on to the bill shortly before press time, monthly payments for home oxygen rentals would stop after 36 months, and the equipment title would then be transferred to the beneficiary. For portable oxygen, the supplier would continue to receive the monthly portable add-on fee after 36 months.

Before the holiday recess, both the House and Senate had passed budget versions that included the provision, but a final reconciliation vote in the House was still pending after the Senate made minor changes.

Prior to the news, providers had already been concerned with a general capped rental provision in the bill, which would limit rental payments for most DME — including manual wheelchairs, hospital beds, nebulizers and CPAPs — to 13 months. Power wheelchairs are excluded from the provision, however, and current law gives beneficiaries the option to purchase them at the time of issue.

The oxygen provision, which originally called for capping rental payments at the 18th month, was inserted into the budget bill by Rep. Bill Thomas, R-Calif., on Dec. 18 — only a day before it was approved by the House.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said that Medicare currently pays about $200 a month for each oxygen rental, and called the provision “a good first step” toward a better payment system.

But many stakeholders argue the provision does not take into account the service and maintenance suppliers provide as part of the rental fee.

“This is a drastic, unprecedented and inappropriate shift of oxygen from the frequent and substantial service category to a rent-to-own payment model,” responded the American Association for Homecare, which added that the move was “promoted based on misleading and incorrect information.”

Opponents also argue that many beneficiaries do not want the responsibility of owning equipment, and believe it could put patients in danger.

“Beneficiaries do not know ‘when servicing is necessary.’ Many cannot follow a manufacturer’s warranty or recommended maintenance schedule,” Waterloo, Iowa-based VGM Group said on its Web site. “They have no exposure to product recalls mandated by the FDA and would not know how to comply with a recall if needed.”

Under the provision, parts and labor for maintenance and service for oxygen and other capped rental equipment would be paid, as determined by the HHS secretary, when not under a manufacturer’s warranty.

At press time, the most recent version of the bill was awaiting reapproval by the House. According to Washington insiders, the vote was not expected until late January when that body reconvenes.

To view the text of the budget bill, also known as S. 1932, visit http://thomas.loc.gov.

For more information, see “Washington Wit & Wisdom” on page 46.