The Oxygen Cap: One Year Later

ATLANTA — A year after the 36-month cap for oxygen rental
began on Jan. 1, 2009, providers are licking their wounds but most
are still standing. Thanks to close attention to costs and billing
processes, HME stakeholders estimate the majority of providers have
come through the drastic change for the first year, but patient
care has been affected.

“Many of the providers had reductions in revenues and reduced
employee levels, which compromised service and accessibility to the
patients we service,” said John Rhodes, RRT, president of Mountain
Home Care Equipment, Ellijay, Ga. “This also has made a big impact
on transitioning patients to different regions of the country. We
must be vigilant about what happens legislatively in the near
future, and take an interest in the process if we are to continue
to make home care the most affordable medical care possible.”

While providers have had to make major adjustments, so have
benefciaries. According to Lisa Getson, most patients still think
they can move anywhere, choose any provider and switch oxygen
modalities any time they want.

“The 36th month’s statement from Medicare provides no
information at all to the patient other than a superscripted note,”
pointed out Getson, executive vice president, government relations
and corporate compliance, for Lake Forest, Calif.-based Apria
Healthcare. “We have taken extra steps to educate our patients and
referral sources about the restrictions on patients’ right to
choose a provider and/or move — restrictions that are caused
by the arbitrary and medically inappropriate 36-month cap.”

Kelly Riley, CRT, RCP, director of the National Respiratory
Network for The MED Group, Lubbock, Texas, laments that a year
later the industry is still struggling to get consistent and/or
correct communication from CMS. Instead, phone calls made by both
providers and patients alike continually result in misinformation,
she said.

“Confusion still reigns for managing traveling, temporary and
permanent relocated patients,” said Riley. “This is an area [the
American Association for Homecare’s] regulatory council is working
with CMS to resolve.”

However, Riley continued, “That is little solace for the
provider who has a patient at the 34-month mark who has to move
outside of their market. Providers continue to get ‘false’ CO176
denials because there is not an adequate system in place to count
months actually paid versus time from initial [date of service].
Twelve months of history now has proven that capping the oxygen
benefit is not good for HME providers, physicians managing patient
care and, least of all, patient and families.”

Despite the hardships, many providers have shown a remarkable
resiliency. Tim Good, CRT, RPFT, characterizes his oxygen business
as “OK” for the past 12 months, but that does not mean it was easy
by any stretch.

“The oxygen cap hit us hard,” said Good, president of GoodCare
by CPCI, Logan, Ohio. “Approximately 30 percent of our oxygen
patients capped out, but about 30 percent of the capped patients
had been on service for more than five years, and we were able to
update their equipment and resume billing.

“We have been doing more Medicaid and managed care Medicaid,
which has driven down our average reimbursement for oxygen. We have
also needed to decrease institutional oxygen pricing (hospice) to
stay competitive. Finally, we are also being required to provide
significantly more high-tech oxygen equipment, such as portable
concentrators, [Invacare] HomeFill units, etc., to compete, which
impacts reimbursement.”

To stay in business in 2009, Good was forced to lay off two
employees, take on more debt and operate with declining revenues
for each oxygen patient. Still, he survived, and his business is
growing.

“On the horizon, I am much more concerned about competitive
bidding and totally uncontrolled RAC and CERT audits,” added Good.
“We need to be working very hard to reign in these developments,
since they are obviously designed by CMS to decrease the number of
providers in the HME industry. ‘After-the-fact’ audits, where the
rules can be changed at the whim of the auditors, are obviously
unfair, and indicative of the agenda of CMS. Unfortunately, the
national providers are sitting on the sidelines waiting for the
independent providers to be forced out of business, with the
assumption that they will then be able to swoop in and obtain the
business left by the exiting/bankrupt independents.”