Industry Rallies against New Threat to Home Oxygen

WASHINGTON–Home oxygen providers braced for another body blow
last week when the House of Representatives passed the Children’s
Health and Medicare Protection Act (H.R. 3162), which includes an
18-month cap for oxygen rental as a means of paying for the $50
billion bill.

In a vote of 225-204, on Wednesday the House approved what is
known as the CHAMP Act, which provides medical coverage for
uninsured children under the State Children’s Health Insurance
Program and eliminates most of a 10 percent physicians’
reimbursement cut set to take effect in 2008. The bill, which also
eliminates the first-month purchase option for power wheelchairs,
would be funded through a tax increase for cigarettes and a series
of payment cuts to Medicare Advantage plans and health care
providers.

The House action preceded by a day the Senate’s passage of its
version of an SCHIP expansion. That $35 billion package
reauthorizes the program–which is set to expire Sept. 30–and
would be paid for largely by a cigarette tax increase. The Senate
bill does not include the DME cuts.

Representatives from the House and the Senate must hammer out a
compromise once Congress returns from its August recess. While
President Bush has said he will likely veto the legislation,
stakeholders are hopeful the HME industry can put forth enough
effort to keep the oxygen and PWC provisions from appearing in the
compromise bill before it is sent to his desk.

“We think we have a very good shot at getting oxygen and power
wheelchairs out of it,” said Cara Bachenheimer, vice president,
government relations, for Elyria, Ohio-based Invacare. “And there
is a huge question if they can come up with a compromise package
the president will sign.”

However, Bachenheimer continued, it is “critical” that providers
spend August communicating with their legislators about the
provisions. “We have a lot of support, but we need people to be
educated about these issues,” she said.

“I don’t think by any stretch of the imagination that the battle
is lost here,” said Joe Priest, president and COO for AirSep,
Buffalo, N.Y. Priest also appealed to providers to contact their
federal legislators about the issue. “There is time, but … you
need to voice your concerns through your [representatives] and your
senators, and that can make a huge impact.”

Although a 13-month oxygen cap surfaced earlier this year in
President Bush’s 2008 budget proposal, the industry had not
expected the oxygen and PWC cuts to be included in the SCHIP
legislation. According to Bachenheimer, the provisions weren’t in
the House bill “until the 11th hour … but then they said, ‘We
need some way to pay for this gigantic package, so everyone is
going to pay.’ Virtually every provider has some cuts in
there.”

Legislators, bound by law to provide a means to pay for the cost
of the expanded children’s coverage, focused at first on raising
tobacco taxes and initially proposed a 61-cent tax increase on
cigarette sales. The Senate version of the bill, in fact, would be
funded by that tax. But in the end, House lawmakers declined to
raise the tax more than 45 cents a pack–and homed in instead on
Medicare reimbursements.

The Congressional Budget Office has estimated that eliminating
the PWC first-month purchase option would save $600 million over
five years and $900 million over 10 years. Lowering the oxygen
rental cap from 36 to 18 months would save $1.8 billion over five
years and as much as $6 billion in 10 years.

“If [this oxygen cap] ends up going through,” Priest said, “I
think the real detriment will be to the patient. This is a huge
reduction in reimbursement. For [providers] to continue to provide
equipment, they are going to have to drive every nickel of service
out of this. You are virtually going to drop off the equipment and
go.”

That would, Priest predicted, prompt escalating hospital
readmissions and trips to the emergency room.

While Bachenheimer said nothing can be certain about the bill’s
outcome, she noted increasing support for the industry in the halls
of Congress and said HME has allies in the Senate who oppose the
home care cuts. She pointed to a July 27 letter from Sen. George
Voinovich, R-Ohio, to Senate Finance Committee Chairman Max Baucus,
D-Mont., in which he wrote of his opposition “to further cuts in
the Medicare DME and oxygen benefit.”

Bachenheimer also pointed out that new oxygen equipment
technology has consistently been exempted from competitive bidding
and the 36-month cap as well as the House version of the CHAMP Act.
But the industry–everyone in it–needs to step up efforts to
educate legislators and CMS about HME, she said.

“People have to take the future of this industry into their own
hands,” Bachenheimer stated.

“It’s practically a textbook example of irony that Congress
would cut a break for tobacco while cutting back on home oxygen
therapy for the older Americans who depend on it,” commented
Michael Reinemer, vice president, communications and policy, for
the American Association for Homecare.

“Everyone favors health insurance for children. But it’s a
needless and shameful trade-off to attack oxygen and power
wheelchair benefits again to expand health insurance for kids. In
the days and weeks ahead,” Reinemer continued, “we hope providers
will join a state-by-state, district-by-district effort to make
sure that these provisions do not make their way into a bill
presented to the president.”

To view the full text of the House of Representatives’ CHAMP
bill, click here.