Oxygen Service Study Proposed in House Bill

WASHINGTON–While the Children’s Health and Medicare Protection
Act (H.R. 3162) passed by the House of Representatives last week
contains home oxygen and power wheelchair cuts, it also includes
one provision that would be favorable for HME, according to Cara
Bachenheimer, vice president, government relations, for Elyria,
Ohio-based Invacare.

Bachenheimer pointed out that the CHAMP Act contains a provision
for a study to understand the service component that oxygen
suppliers provide. The study would be carried out by the Department
of Health and Human Services and would be due to Congress 18 months
after the law is passed. The study would consider:

–Types of services provided;
–Which services are medically necessary or can contribute to
better outcomes; and
–How much Medicare should be paying for services and medical
equipment.

The HHS secretary would also be directed to compare payment
rates to competitive bidding rates to show how much Medicare should
pay, Bachenheimer said, and also to recommend whether Medicare
should pay separately for service.

Results of a study commissioned by the American Association for
Homecare in 2006, which was conducted by research firm Morrison
Informatics, showed that 72 percent of providers’ costs in
supplying home oxygen go to services and related expenses while
equipment represents only 28 percent. (See HomeCare Monday, July 10, 2006.)

The service issue in providing home oxygen therapy has long been
“nebulous,” Bachenheimer said. It is unclear what services are
important and what CMS expects. The proposed study would provide
critical information for CMS as well as guidance for providers.

“We need to have that study,” Bachenheimer said. “We have
industry studies and that is great, but the government will never
look at those studies and say, ‘You are absolutely right.’”

To download a PDF of the Morrison Informatics study, click here.