Invacare: Good News for New O2 Technology

ELYRIA, Ohio–On Friday, HME manufacturing giant Invacare Corp.
issued a statement objecting to cuts in President Bush’s budget
proposal for 2008 that would impact both home oxygen and power
wheelchairs.

But company officials pointed to a good news-bad news scenario
regarding the oxygen proposal. While the budget would reduce the
rental cap on home oxygen therapy from 36 to 13 months, it would
also exempt “new oxygen technologies,” such as home transfilling
equipment, from the 13-month cap, said Cara Bachenheimer,
Invacare’s vice president of government relations.

Invacare and other HME stakeholders have spent months trying to
educate the administration about the effects of capping oxygen
equipment, Bachenheimer said, one of them being that if new
technology were capped, “no one would buy it” and no one would
develop it.

“We still oppose the cap on the traditional technology,” she
said, though she added that the exemption puts the oxygen market in
a “much better position.”

Bachenheimer also noted that Bush’s new oxygen proposal does not
specify what happens with the equipment once the 13-month limit is
reached.

In his 2007 budget, Bush had proposed that after 13 months of
rental, oxygen patients would own their equipment. The industry
managed to gain support in Congress to beat back that idea,
however, leaving in place the Deficit Reduction Act’s provision of
a 36-month capped rental for home oxygen. The DRA provision also
requires that ownership of oxygen equipment must be transferred to
beneficiaries after the rental period ends.

Bush’s new proposal, however, says nothing about the beneficiary
taking ownership of the equipment, Bachenheimer said. “That’s
intentional,” she said. “You have to understand the nuances of the
administration’s proposal. The devil is in the details.”

In this case, Invacare said in its statement, “The budget
proposal’s silence on this issue sends a clear signal to Congress
that the administration does not oppose reversal of the mandatory
beneficiary ownership.”

That is heartening news to the industry, which is already
marshalling support for the Home Oxygen Patient Protection Act
(H.R. 621), a bill introduced by Rep. Tom Price, MD, R-Ga., that
would repeal the DRA oxygen provision.

Bachenheimer also noted that oxygen savings in the Bush budget
are pegged at $2.4 billion over five years. That is a significant
drop from previous estimates, when a 13-month cap had been
estimated to save more than $6 billion over five years.

“We don’t fully understand why,” Bachenheimer said about newest
estimates. She speculated that, among other reasons, the savings
drop could be explained by the fact that the current proposal says
payments would be capped for “most” oxygen equipment rather than
“all.”

Regarding elimination of the first-month purchase option for
power wheelchairs, Bachenheimer called the proposal
“ridiculous.”

While the administration says the proposal would save about $500
million over five years, Invacare officials estimate that, in
reality, the provision would end up costing Medicare and
beneficiaries 5 percent more over five years than they are
currently expending under the first-month purchase option.

“We recommend that Congress again reject this proposal,” the
Invacare statement said.