O2 Sector Works to Find Common Ground

ATLANTA — Members of a newly formed oxygen coalition sifted through provisions of several plans earlier this month looking for common ground on reform of Medicare’s oxygen benefit and repeal of the 36-month rental cap.

“The big push now is to get a unified voice,” said Mike Calcaterra, Montana state chairman and legislative/DAC chair for the Big Sky Association for Medical Equipment Services, which covers Idaho, Montana and Wyoming.

Industry advocates were headed to Washington Feb. 11 for the American Association for Homecare‘s lobby day, so, Calcaterra said, “we need to make sure we are on message there with something that is giving us immediate relief. We are already seeing providers closing their doors.”

AAHomecare convened the New Oxygen Coalition, or NOC, after a number of state HME associations said they could not support the long-term plan unveiled in January by AAHomecare and the Council for Quality Respiratory Care. Some state leaders said the plan lacks specifics and does not immediately address the 36-month cap and the post-cap payment rules, which took effect Jan. 1.

AAHomecare leaders fear, however, that Congress won’t budge on the cap before a reform plan is in place.

“While everyone would like to eliminate the 36-month cap or get a better set of payment rules, both are difficult targets to achieve in the current political environment,” said Tyler Wilson, president of AAHomecare. “Many within the oxygen community view the likelihood of more cuts to oxygen as an imminent threat. The big challenge right now is to develop a consensus plan that will address both the immediate issues and the longer-term goal of reform.

“All of us face real peril at the hands of Congress and CMS if the oxygen provider community does not present at least a core of common principles to address the issues.”

Members of the new coalition — which includes several state associations, VGM, The MED Group, CQRC, the National Association of Independent Medical Equipment Suppliers and AAHomecare — all agree long-term reform is needed and the cap must be repealed, but they are at odds over how those things can be accomplished.

“There are different versions of what reform might look like,” said Teresa Tatum, executive director of the Georgia Association of Medical Equipment Services. “There is some agreement, but the major disagreement is on the payment methodology.”

Plans Galore

In addition to the AAHomecare/CQRC plan, two other reform plans have been proposed by Jason Rogers, president of GAMES, and by Big Sky AMES. “We think we have a vehicle that can give us an immediate fix [to the rental cap],” said Calcaterra about the Big Sky plan. “AAHomecare brought their proposal they worked on with CQRC — and a lot of work, a lot of time went into that — but we didn’t see any immediate fixes in it.

“It’s big-scale reform, and that’s going to take a while. We are worried about providers being there when the reform takes place. We feel we have the plan for realignment on how they pay for the service that would eliminate both the cap and competitive bidding.”

The AAHomecare/CQRC plan, developed with the help of former CMS Acting Administrator Leslie Norwalk, repeals the cap, changes the status of oxygen entities from “suppliers” to “providers,” exempts oxygen from competitive bidding and would reimburse providers for patient services, as well as equipment and supplies, in a bundled payment. In addition, the plan is budget-neutral, a plus AAHomecare points out considering the nation’s current economic pressures (see AAHomecare Unveils Oxygen Overhaul Plan, HomeCare Monday, Jan. 12).

But the overhaul plan includes a case-mix adjusted payment system that bases reimbursement on patient ambulation, liter flow and modality, a methodology some providers have said they are wary of.

According to Calcaterra, the Big Sky plan rearranges monies in the benefit to reimburse more appropriately for service and realigns payments so they aren’t “front-loaded.” Dubbed the “oxygen flip plan” by some stakeholders, the plan “flips” priority of payment dollars from stationary to portable.

Rogers said his “blended” plan “is an attempt to unite the several plans put forward.” It also provides for a possible prospective payment system.

Sign-On Letter

Even as they grappled with how to move forward, stakeholders were preparing to visit federal legislators to urge repeal of the oxygen cap. They were armed with a sign-on letter generated by Rep. Tom Price, R-Ga., a physician who last year introduced legislation to repeal the cap. According to the letter, the Deficit Reduction Act, which mandated the rental cap, also instructed CMS to establish adequate payments for oxygen.

“That’s where we have the problem,” said Tatum. “After 36 months, there aren’t adequate payments.”

Price asked his colleagues to appeal to CMS to address the issue immediately — and to take further congressional action if necessary. “Without immediate changes to the Medicare oxygen policies, patient care will be compromised and Medicare costs will increase,” the letter read.

Said Tatum, “I feel like we are all going to come together behind this letter.”

Calcaterra is hopeful that the industry can reach agreement as well on a long-term benefit plan. “We truly want to reform it, but we are also trying to make Congress and CMS understand that there is so much more to what we do than just [deliver] a piece of equipment,” Calcaterra said. “There is absolute disconnect between the requirements to be a provider and the payment modality …

“It is critical to get the industry behind whatever [the reform plan] ends up looking like,” he added. “We’re already seeing problems for beneficiaries being able to travel, relocate … the bottom line is that the beneficiary is caught in the middle of that.”

So are providers. “The cap is still the cap,” lamented Bill Baker, RRT, president of RxO2 in Tucson, Ariz., “and every month [means] thousands of dollars lost. We still have to provide the services at no fee … so the bleeding is still perfuse. The members of this industry are hemorrhaging to death in red ink.”

Long List of Issues

In addition to cap-related issues and benefit reform, HME advocates were headed to Washington with a long list of issues to put before members of Congress, among them: the revived competitive bidding program; restoration of the 9.5 percent reimbursement cut for complex rehab; the first-month purchase option; and fraud-and-abuse initiatives.

Set to dovetail with AAHomecare’s “Home Care on Capitol Hill” lobby day, Rep. Heath Shuler, D-N.C., called a congressional hearing to discuss the effects of DMEPOS competitive bidding on small business. At a similar hearing last May, Shuler said it was unclear how under the bidding program CMS would be able to deliver on its promise of reducing costs, improving effectiveness and ensuring access to care for seniors “without driving small health care providers out of business and limiting access to care.”

The National Coalition for Assistive and Rehab Technology had also scheduled a call-in to support AAHomecare’s lobby effort. NCART asked its members to “help increase the decibel level of our industry’s message” by urging Congress to rescind the 9.5 percent reimbursement reduction for Group 3 complex power wheelchairs.