Competitive bidding rates fail to cover the cost of delivery.

WASHINGTON, D.C. (May 4, 2017)—The Council for Quality Respiratory Care (CQRC)—a coalition of the nation’s home oxygen therapy providers and manufacturing companies—expressed disappointment and frustration with the Centers for Medicare & Medicaid Services’ (CMS) decision to implement additional cuts as part of its interpretation of the Congressional requirement to extend the phase-in period of modifications to the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule, including home respiratory therapy equipment and services. 

The CQRC raises serious concerns about CMS’s decision to apply the competitive bid rates that took effect July 1, 2016, to the blended rate that the Congress required CMS to extend beyond the initial six-month phase-in period for 2016. The Congress provided this extension of the phase-in in the 21st Century Cures legislation to freeze the blended rate used to implement the modified fee schedule rates, which substantially cut rates for home respiratory therapy.

In the rates released by CMS on May 1, which are retroactive rates for the delivery of services July 1, 2016 through Dec. 31, 2016, Medicare uses competitively bid rates that took effect July 1, 2016, as part of the blended rate in non-competitively bid areas, which results in a deep payment cut applied retroactively for home oxygen care already delivered to patients. The methodology remains unclear, however, because the rate for oxygen concentrators is lower than it should be even with the application of the July 1 rates.

“We are incredibly frustrated that CMS has chosen to seemingly ignore the provision enacted in 21st Century Cures and deny home respiratory care providers the relief Congress sought to provide from Medicare cuts to therapy provided in non-competitive bid areas,” said Dan Starck, Chairman of CQRC. “By retroactively applying cuts of up to 50 percent for home oxygen, we remain highly concerned that Medicare does not understand the true value our services offer in improving patient outcomes, lowering hospital readmissions and reducing Medicare spending.”

Home respiratory therapy supplies and services are vital to managing Chronic Obstructive Pulmonary Disease (COPD) and other pulmonary conditions. Data shows home oxygen care reduces preventable hospitalizations and readmissions, signaling that reduced access to quality respiratory care in the home will result in increased emergency room (ER) visits and readmissions, therefore harming patient outcomes and increasing Medicare costs.

Added Starck, “While we are disappointed with CMS’s announcement, we remain committed to working with the CMS and Congress to ensure Medicare policies are developed to enable home oxygen providers to provide high quality respiratory care to the sick and vulnerable patients who rely on our services to age with dignity at home.”

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