Industry Scrambles to Unite on Oxygen Reform

LAS VEGAS — Some 450 attendees jammed a Medtrade Spring meeting room
Wednesday to hear details of a Medicare oxygen reform plan hammered
out by members of the New Oxygen Coalition. And according to Tyler
Wilson, president and CEO of the American Association for Homecare,
that plan has become “urgent” as the nation’s health care reform
effort picks up speed.

“We are getting clear signals that Congress is set to cut the
reimbursement rate once again,” Wilson said at the association’s
Washington Update, noting new cuts could come out of reducing the
oxygen cap from 36 to 18 months and/or simply lowering payments. “I
think it is fair to say the home oxygen benefit is under siege, and
now is the time for the industry to come forward with a unified
proposal that we can take to Capitol Hill.”

Congress plans to have a health reform bill packaged by June,
and legislation on the President’s desk by August. But with
lawmakers out soon for a two-week Easter recess and another recess
over July 4, that doesn’t leave much time to get any oxygen plan
into legislative language.

In fact, said AAHomecare’s Walt Gorski, vice president of
government affairs, as far as oxygen reform is concerned, “We look
at the next 30 days as very critical.”

Wilson said the NOC began working in February to “cobble
together” consensus on a plan that “the broadest part of the oxygen
community can embrace — and that we can sell on Capitol
Hill.

“It really is a two-part process,” he said. “It’s got to be
embraced, understood and supported by the industry, but it also has
to address the concerns that Congress has about the benefit [being
overpaid].”

As outlined by members of the NOC, the plan would eliminate the
oxygen cap and remove home oxygen from competitive bidding. It
would also overhaul the way payments are made under Medicare’s
oxygen benefit.

Patients would be classified in three categories based on
ambulation and portability needs: Category 1 would include patients
who are prescribed oxygen for nocturnal use only; Category 2,
patients with standard portability needs (use of portable oxygen is
less than or equal to 40 liter hours per week); and Category 3,
patients with high portability needs (use at more than 40 liter
hours per week). “Liter hours” is defined as the prescribed LPM
multiplied by the estimated number of hours of use per week.

Among other major components, the plan would:

• Recognize the service costs of providing home oxygen.
• Name the activities and services involved in home oxygen
  therapy and link them to specific patient needs.
• Bundle payments for services and supplies in a monthly
  allowable.
• Require retesting every 60 to 120 days with the exception of
  COPD patients or those with various other chronic conditions.
• Set up new coding for the patient categories.
• Establish allowable charges for the first two years. (The plan
  is budget-neutral, meaning it would not cost the government more
  than is currently paid.)
• Include annual updates based on the Consumer Price Update for
  Urban Consumers (CPI-U).
• Establish a Home Oxygen Therapy Advisory Committee to advise
  HHS on oxygen-related issues. The committee would include oxygen
  providers, patients, nurses, respiratory therapists, pulmonary and
  primary care physicians, public health organizations, patient
  advocates and manufacturers.
• Provide cost transparency through an industry cost study every
  three years.
• Incorporate AAHomecare’s recommendations for anti-fraud and
  abuse.
• Recommend beneficiary protections.

NOC members include the Accredited Medical Equipment Providers
of America (AMEPA); Apria Healthcare; the Big Sky Association of
Medical Equipment Suppliers; Covidien; CQRC; the Georgia
Association of Medical Equipment Services (GAMES); Invacare;
Medical Service Company; the Midwest Association of Medical
Equipment Services (MAMES); The MED Group; the National Association
of Independent Medical Equipment Suppliers (NAIMES); Pacific
Pulmonary; Philips Respironics; and VGM.

The group called for feedback from state associations on the
draft plan before the Las Vegas show, and Wilson asked the same of
the Medtrade Spring audience. A conference call with state
associations was set today to address the comments that had been
collected and work through any final sticking points.

There could be some involving payments, said Jason Rogers,
president of GAMES. “I agree competitive bidding
is a great evil that must be done away with. It will kill patients
as well as businesses and jobs. But before we decide the
elimination of competitive bidding is included in this [plan], we
have to know what effect this is going to have on the allowable.”
Rogers said he planned to bring up that issue and others on the
conference call and was hoping they could be resolved.

John Shirvinsky, executive director of the Pennsylvania Association of
Medical Suppliers, said he also had questions on payments.
“It’s unfortunate that we won’t know the cost until the end,” he
said. “As we define the services, are we on the front end of
proposing to provide the equivalent of a new Cadillac in service
and patient care only to turn around on the back end and be
compensated for a used Chevy?

“There’s no way of knowing,” Shirvinsky continued. “That’s the
problem. We have to be able to make the best case we can that
having this new three-pronged, service-based compensation structure
makes sense … you‘re not going to be able to structure
a compensation system in dollars and cents legislatively, so there
is a high level of trust that is involved with this.

“On the one hand, it is all very scary because this is a major
change to a major source of revenue to the industry,” Shirvinsky
said. On the other hand, he added, “I understand what the sense of
urgency is and I understand the risks that confront our industry if
we fail to act in an appropriate and responsible way.

“There is a very short timetable, and we are not in the driver’s
seat on that timetable. Right now the goal is for all the parties
to pull things together.”

“Ideally you would like to get 100 percent support,” said NOC
member Mike Calcaterra, Montana state chairman and legislative/DAC
chair for Big
Sky AMES. However, he said, “I don’t know that there’s any
industry that could say they’ve got 100 percent support, but an
overwhelming majority I think is a must. I think we’ve got that,
but I know we’ve got some questions to answer. We want to make sure
we’re getting those now so that it doesn’t set us back down the
road.”

Indeed, Wilson told Medtrade Spring attendees if the plan is
endorsed by a “broad base” of oxygen stakeholders, a formal
proposal will be put before Congress as quickly as possible so it
can be incorporated in health reform legislation. And, he said, it
won’t be a moment too soon as the Obama administration prepares to
reshape the country’s ailing health care system.

“The health care reform train is moving forward, and if we’re
not on it, we’ll miss our opportunity,” Wilson said.