Oxygen Answers Not What Industry Wanted to Hear

BALTIMORE–For months, providers and other industry advocates
have been asking CMS for guidance on numerous issues surrounding
the 36-month oxygen rental cap, which becomes effective Jan. 1. On
Thursday, they got some answers, but far from those they had been
hoping for.

Based on a summary from Waterloo, Iowa-based VGM, the new rules
stipulate that HME providers with patients on service in the 36th
month are required to:

–Continue to provide the equipment to the patient at no
additional charge during any period of medical need for the
remainder of the useful life of the equipment, including periods
that may occur after a 60-day break in service;

–Continue to provide oxygen contents to the patient for the
remainder of useful life of the equipment. (The five-year useful
life is determined based on when the equipment is first delivered,
not the age of the equipment.) Providers can charge for the
contents; and

–Arrange for oxygen equipment and oxygen contents with another
supplier if the patient relocates outside the provider’s
service area. The new supplier cannot charge for the equipment, but
can charge for the contents.

According to the new rules, the provider is responsible for–but
will not be paid for–maintenance, servicing and repair of oxygen
equipment. For 2009 only, however, Medicare will pay for 30 minutes
of labor once every six months (beginning six months after the
36-month cap) for routine maintenance and service actually
performed on oxygen concentrators or transfilling equipment in the
patient’s home. No payment is available for repair or
servicing of gaseous or liquid oxygen equipment.

Regs Are ‘Alarming’
In a statement issued Friday, the American Association for Homecare
labeled Medicare’s new regulations “alarming” and
“wholly inadequate.”

“Once again, CMS has discounted the important role that
home care providers play in provision of care to Medicare patients
on home oxygen therapy,” said Tyler J. Wilson, the
association’s president and CEO. “The rules released by
CMS [Thursday] underscore the fact that the current Medicare oxygen
policy is seriously flawed and changes are needed in order to make
the oxygen benefit more focused on patients and the services they
require.”

AAHomecare said it expects a third of all Medicare home oxygen
patients will be affected.

“In many cases the rules will be unworkable,” added
AAHomecare’s Walt Gorski, vice president, government
relations. “Maintenance and service payments are a key issue,
and a second issue is how episodes of unscheduled emergency service
will be handled. Another is payment for supplies–i.e., there is
not any past 36 months.”

And, Gorski continued, “we’re concerned about
patients who move or whose supplier [discontinues service after the
cap]. They are going to have a terrible time finding an oxygen
provider.

“The provisions included in this rule do not reflect the
real-life circumstances that beneficiaries will find themselves
in.”

Lots of Questions Remain
Mandated by the Medicare Improvements for Patients and Providers
Act–the same law that delayed competitive bidding–the oxygen regs
were included as part of a 1,459-page final rule for
Medicare’s 2009 physician fee schedule, which is set to be
published in the Federal Register Nov. 19. The oxygen rules
are explained on pages 837-859 of the massive document, and the
regulatory language begins on page 1119.

There is a 60-day comment period for the rule, but even that is
unrealistic where both patients and providers are concerned,
according to Rob Brant, president of the Accredited Medical
Equipment Providers of America in Miami.

“How can they have a comment period that ends [at the end
of December]? When are those comments going to be addressed and
digested, and when are any changes based on those comments going to
be implemented when the new rules are going to be effective Jan
1?” Brant wanted to know.

He asked that question and others about the regulations of
CMS’ Christopher Molling, who is listed as an agency contact
in the rule document.

“He couldn’t answer that question,” Brant
said, although he noted Molling did confirm “that service and
maintenance could be billed for the first time on July 1, 2009, if
the equipment caps in December of 2008. That payment for 30 minutes
of service is approximately $30. It is only paid if the service is
done and cannot be billed every six months whether service is
provided or not. Travel time and delivery costs cannot be billed to
Medicare.

“Mr. Molling could not answer how disposables such as
cannulas, filters and humidifier bottles would be reimbursed and at
what frequency,” Brant added. “He also could not answer
if we could charge the patient out-of-pocket if they request
maintenance and service more than once every six months.”

Said Brant, “We always knew [CMS] would try to put us on
the hook for doing the fills and also to do the maintenance, but we
didn’t think they would make it so unrealistic. I just think
it’s ridiculous for them to set up payments like this …
They also use the word ‘must’ when they say a provider
‘must’ make arrangements with another supplier if a
patient relocates. What if you can’t find a provider out of
state that’s going to do the refills? Why would
they?”

CMS Undervalues Providers
A Friday statement from the Council for Quality Respiratory Care, a
coalition of many of the nation’s largest home oxygen
providers and manufacturers, also expressed “extreme concern
and disappointment” with the new regulation.

“Of acute concern is CMS’ decision to provide no
reimbursement to providers who respond to patient-generated
requests for non-routine services. Non-routine home visits often
are triggered by beneficiaries experiencing clinical and
equipment-related problems. CMS is undervaluing the important role
that home oxygen providers can and do play in preventing costly
beneficiary emergency room visits, acute care admissions and
avoidable physician intervention,” the CQRC said.

CQRC members include AirSep, American HomePatient, Apria
Healthcare, DeVilbiss Healthcare, Invacare, Lincare, Pacific
Pulmonary Services, Praxair, ResMed, Respironics, Rotech Healthcare
and Sunrise Medical.

“CMS has taken an alarmingly restrictive position regarding the
services that beneficiaries on home oxygen require–the random
after-hour service calls, the need to troubleshoot when a frail
senior needs help and many other instances which require the
provider to incur real costs,” said Cara Bachenheimer, senior
vice president of government relations for Invacare, Elyria, Ohio.
“Further, the requirement to continue servicing the
beneficiary when he/she moves outside your service area is wholly
unrealistic.”

Regarding non-routine maintenance, Bachenheimer noted, CMS
states in a preamble to the rule that “it is not reasonable
and necessary to pay for non-routine maintenance and servicing
(including repair) of supplier-owned oxygen equipment. Given that
the supplier owns the equipment, we believe that the supplier
should be responsible for maintaining their equipment in working
order as they did during the 36-month rental period.”

Citing a September 2006 OIG report that found 78 percent of
beneficiaries do not reach the 36-month cap and the $7,174 that
suppliers receive for 36 months, CMS said the supplier should be
responsible for absorbing the cost of non-routine maintenance and
service after the cap period.

“We will be working aggressively with CMS and Congress to
improve these new rules,” Bachenheimer said.

What to Do?
In its analysis, VGM noted “the provisions regarding 60-day
notice to the patient concerning whether the supplier can continue
to service the patient and/or provide oxygen contents after
transfer of title have been deleted. A participating supplier
should consider becoming non-participating in order to charge the
patient for oxygen contents at its ‘usual and customary
charge’ rather than having to take the Medicare
allowable.”

As for other action providers can take, the member services
group wrote on its Web site:

“It is absolutely imperative that providers and their
patients contact their legislators between the Nov. 4 elections and
Jan. 1 to let them know that this policy is unworkable and
unsustainable. Congress must know that CMS has no concept of
oxygen. Payments are not just for the equipment; it is also for
servicing the oxygen patient. Beneficiaries are going to end up in
the emergency rooms, and that will represent a tremendous cost
shift.”

Late Friday, provider Todd Tyson, president of Hi-Tech
Healthcare in Norcross, Ga., said he was still reviewing the rules
after spending the week at Medtrade.

“My general impression right now is that [CMS has] had a
lot of time to think about this–since January of 2006–but they
waited till 60 days prior to the cap and I don’t think they
put very much thought into it. [The rules] seem very short-sighted.
I can’t imagine they could expect any business for profit to
continue service this way … you don’t need to get rich
but you do need to make a living,” Tyson said. “There
is no way that I could provide service for a patient for an
additional two years [past the cap period] if they left my service
area. I don’t know who could. If these rules go through as
they are, I think people will not be prepared for it.”

Concluded Tyson, “If I’m serving a patient Jan. 1
and they tell me on Jan. 2 that they are moving to Alaska … then
I might just have to call Ms. Palin and ask her what I’m
supposed to do. We might have to build a bridge to
Alaska.”

To view the entire rule, click
here.

For an excerpt of the rule provided by AAHomecare,
click here.

For a summary of the rule’s provisions from AAHomecare,

click here.

CMS said comments will be accepted until 5 p.m. EST on Dec. 29.
Refer to file code CMS-1403-FC. Electronic comments can be
submitted to www.regulations.gov. Enter the
file code in the search bar, then click “Send a comment or
submission,” fill in the information required and include the file
code in your comments.

And stay tuned. On an Open Door forum call Wednesday, CMS
official Laurence Wilson said additional instructions will be
released in the next two weeks.

Also on the call, CMS staff said the agency had learned of
violations of the oxygen policy enacted in the Deficit Reduction
Act, which prohibits providers from switching oxygen modalities
within the 36-month rental period. Exceptions include a physician
order for new equipment or a beneficiary request for new equipment.
CMS said it will monitor violations and take punitive action when
necessary.