OIG: Reduce Oxygen Cap to 13 Months, Adjust PWC Payments

WASHINGTON — CMS should work with Congress to further
reduce the rental period for home oxygen, the Office of Inspector
General repeated in a report issued last week.

On Thursday, the OIG posted its “2010 Compendium of
Unimplemented OIG Recommendations,” which includes unimplemented
recommendations for legislative, regulatory and administrative
actions that the OIG believes could save money or otherwise improve
HHS programs.

In a 20-page section devoted to DME, the OIG said that if
Medicare payments for oxygen concentrators were limited to 13
months, the program would save $3.2 billion over five years.

According to the report:

CMS should (1) work with Congress to further reduce the
rental period for oxygen equipment, (2) determine the necessity and
frequency of nonroutine maintenance and servicing for
concentrators, and (3) determine whether a new payment methodology
is appropriate for portable oxygen.

The OIG said CMS concurred with its recommendations, but pointed
out that reducing the rental period to 13 months “requires a
statutory change. Although bills have been introduced in the past,
none has passed.”

The report also noted that in November of 2006, CMS issued a
final rule that changed how Medicare pays for oxygen. “This policy
change implemented our recommendations on nonroutine maintenance
and servicing and established a new payment methodology for
portable oxygen.

“We continue to encourage CMS to work with Congress to reduce
the rental period,” the OIG said.

The recommendation even made the report’s seven-item “priority
list” for Medicare Parts A and B, which the OIG believes represent
the most significant opportunities to impact HHS programs. Two
others on that list also involve DME:

• Ensuring medical equipment providers’ compliance with Medicare
  enrollment standards; and

• Eliminating Medicare’s vulnerability to fraudulent or excessive
  inhalation drug claims in South Florida. Here, the report
  recommended that:

CMS should determine whether Medicare’s fee schedule amounts
for standard and complex rehabilitation power wheelchairs should be
adjusted by (1) using information from the Competitive Bidding
Acquisition Program, (2) seeking legislation to ensure that fee
schedule amounts are reasonable and responsive to market changes,
or (3) using its inherent reasonableness authority.

The OIG report includes a number of additional recommendations
for the DME sector, such as cutting payments for negative pressure
wound therapy.

Responding to the report, the American Association for Homecare
said the OIG “focuses a disproportionate amount of attention on
reimbursement for durable or home medical equipment and relies on
out-of-date information and unsupported assumptions. ?

“The most striking observations about the list of reports are
their lack of recognition of payment reductions the home medical
equipment sector has received and the lack of recognition of
services that home care providers furnish when providing durable
medical equipment.”

In addition, AAHomecare said, OIG studies “often gloss over the
true costs of providing home medical equipment to Medicare patients
at home and instead focus solely on acquisition costs, leading to
extraordinarily misleading reports using apples-to-oranges
comparisons and recommendations.”

The association said it will be meeting with the OIG to discuss
the report.

To read the
199-page compendium, which also includes unimplemented
recommendations for hospitals, nursing homes, hospices and home
health agencies, click here. The section on DME begins on page
57.