Outcry Grows Over New O2 Regs

ATLANTA — Following CMS’ Oct. 30 release of regulations
involving changes to Medicare home oxygen policy and payment, some
stakeholders involved in the sector said they believe the new rules
are punitive.

While in July the Medicare Improvements for Patients and
Providers Act reversed the oxygen equipment transfer to
beneficiaries called for under 2005’s Deficit Reduction Act, it
left the DRA’s 36-month oxygen rental cap in place.

According to the new regs, which implement changes in both laws,
post-36 months providers must continue to provide oxygen contents
to the patient for the remainder of the five-year useful life of
the equipment, for which they can charge. But they must also
service and maintain the equipment over its useful life (based on
when the equipment is first delivered, not the age of the
equipment) for which they can’t charge. There will be a minimal
service reimbursement in 2009 only.

Should a beneficiary move out of the provider’s service area,
that provider is also required to make arrangements with another
for the patient’s oxygen service.

“Many see this as a last swing from [CMS Acting Administrator]
Kerry Weems and [HHS] Secretary Leavitt, more so at Congress than
our industry” because lawmakers decided to delay competitive
bidding, VGM Group’s John Gallagher, vice president of government
relations, said during a legislative update Friday.

Added Mark Higley, VGM’s vice president of development, “To me
as a regulatory analyst, it is perhaps the worst piece of
rulemaking that I have ever read, and let me tell you why: You in
the provider community have effectively no choice but to continue
serving your patients that you are currently serving. You will
continue to maintain and repair—at virtually no reimbursement
whatsoever—this equipment through five years.”

Gallagher said by the end of this week, VGM will prepare letters
for its members to explain the situation to their Medicare
patients, in addition to letters those beneficiaries can send to
their congressmen.

The American Association for Homecare also said it will be
talking about oxygen problems with members of Congress “to
illustrate the flaws” in the policy, and is encouraging providers,
their referral sources and patients to call federal legislators
with their concerns about the changes.

On a conference call last week, AAHomecare’s Regulatory
Committee began sorting through the regulations and “will be
responding to CMS, asking them for specific guidance as well as
trying to make our case on several of the issues,” said the
association’s Walt Gorski, vice president of government relations.
“There are many twists and turns to this policy. We are working to
develop a list of questions for CMS and show the real-life
implications that these rules create.”

Real-Life Bind

In the meantime, providers said their real-life situation leaves
them in a bind. Some said they won’t be able to comply if the
oxygen rules stand as currently written; others said they simply
won’t be able to stand at all.

“If the rules remain as they are, we nor any company can afford
to provide the service,” said David Petsch, president of Petsch
Respiratory Services in Martinez, Ga. “We would simply not be able
to survive.

“The area that I most hate to see is that providers will have no
options and be forced to violate regulations,” Petsch continued.
“That, again, can and will be used against the industry for CMS. I
know the patient is the victim, but so, too, are small businesses
like my own. [This] will make Medicare unprofitable, and the
quality of care will so severely drop that it will cost shift the
financial burden to Part A … I truly believe we are at the
end of the profitable road and have nothing but horrible
options.”

“This is a recipe for bankruptcy,” commented a provider on VGM’s
conference call, referencing “the notion that you can make
Americans work for free … We’re prisoners.”

“I think this is making providers consider whether or not they
will even provide oxygen,” said Joan Cross, co-owner of C&C
Homecare in Bradenton, Fla. “I can’t even put gas in my car for
what they are going to pay for maintenance. It’s ridiculous. I
can’t afford it.”

Cross is even more concerned about her patients, she said. “They
are going to be very confused as to why I can’t come out there and
make sure their machines are OK for the 15th time. I have patients
who are so nervous they want you out there, or their family does,
and sometimes we’re the only people they see,” she explained. “But
no more of that. We can’t afford to send someone out and not
receive anything back in with which to pay that person.

“As far as snowbirds,” Cross continued, “we’ve already turned
three or four away. We have a rash of people who come down right
before Thanksgiving and we have our second run right before
Christmas. If they come down now, chances are their [oxygen]
company has already been paid for November, so I’ll get the payment
for December and if that’s the 36th month, guess what happens then?
I’ll have to give them their supplies for the next two years. And
if I do take them, then nobody’s going to take them when they go
back up north …

“I honestly don’t know what the patients are going to do.”

Cross said she is “very, very angry” at the scenario. “This
[rule] that CMS put out is nothing but punitive,” she said. “They
are punishing us. And it makes me mad because the people that are
out there committing fraud and abuse aren’t going to be
affected—they are not putting out the equipment! Don’t tell
me you are doing all this oxygen [stuff] to get rid of fraudulent
people. All that’s going to do is get rid of me.”

No Easy Answers

Industry consultants agree both providers and Medicare oxygen
patients are in a tough spot.

“To anybody that’s trying to go to Florida now, good luck trying
to find a provider,” said Miriam Lieber of Lieber Consulting,
Sherman Oaks, Calif. “Small providers just can’t service the
patients that are coming and going with two months left in a cap
… No one’s going to be able to service the patient anymore,
so the patients are basically going to be accessing their ER even
more than before.

“Nobody’s going to take an existing patient, period,” she
continued. “The can of worms opens now. It doesn’t open in two
months, it opens now. There are too many questions and no
definitive answers.”

Lieber said she thinks the industry could see a 5 to 10 percent
attrition among very small providers due to the oxygen cap and
related issues on top of the across-the-board 9.5 reimbursement cut
that takes effect Jan. 1.

“They will look for other things to do because I don’t think
they can make it anymore. This is really it. Their time is up,” she
said. “There’s so much confusion and there’s so much that’s up in
the air, even more so with the way the economy is, it’s too scary
to continue in this kind of a venture when you’re not sure what’s
going to happen.”

According to Wallace Weeks of Weeks Group, Melbourne, Fla., “It
looks like the provider gets into the warranty business no matter
where that concentrator came from … It’s a pretty crummy
situation and there is a great deal of uncertainty in it with
respect to the service requirements that providers have.

“Nobody has really compiled and analyzed what those service
requirements might be,” Weeks pointed out. “How much is it really
going to take to service that equipment for those last two years
after the cap? There’s a giant unknown there, and there’s no data
that I know of to give us a clue as to how much we’re really going
to have to spend.”

Don Clayback, vice president, government relations, for The MED
Group, Lubbock, Texas, summed up providers’ plight:

“The released regulations are extremely disappointing,” he said.
“How does CMS expect a provider to continue to provide 24/7 support
for oxygen dependent beneficiaries with no payment? How does a
provider perform two in-home maintenance calls on an annual basis
for a total payment of $60? How is a provider in Pittsburgh
responsible to provide equipment to a beneficiary who moves to San
Diego and not receive any reimbursement? How can a provider supply
a product that is used 24 hours a day and get no payment for
required repairs over a five-year period?”

What’s more, he said of the 60-day comment period on the new
regs—which ends Dec. 29—”how does CMS publish rules
with a comment period that ends two days before the regulations go
into effect? What kind of input is that?

“Unfortunately, the provisions show a real lack of understanding
as to the services a provider gives to a Medicare beneficiary. They
also show a lack of an even basic regard that businesses cannot
provide services with no reimbursement,” Clayback concluded.

“The industry will have to work through both CMS and Congress to
get these ridiculous issues fixed so that there are not major
problems for oxygen patients in January. This has been an ongoing
battle with CMS, and we are now entering into another round.”