Oxygen Stakeholders Work toward Common Ground

ATLANTA — Members of a newly formed oxygen coalition
sifted through provisions of several plans last week looking for
common ground on reform of Medicare’s oxygen benefit and repeal of
the 36-month rental cap.

“The big push now is to get a unified voice,” said Mike
Calcaterra, Montana state chairman and legislative/DAC chair for
the Big Sky
Association for Medical Equipment Services, which covers Idaho,
Montana and Wyoming. With industry advocates headed to Washington
this week for the American Association for Homecare’s lobby day,
“we need to make sure we are on message there with something that
is giving us immediate relief. We are already seeing providers
closing their doors,” Calcaterra said.

AAHomecare convened the New Oxygen Coalition, or NOC,
after a number of state HME associations said they could not
support the long-term plan
unveiled in January by AAHomecare and the Council for Quality
Respiratory Care. Some state leaders said the plan lacks
specifics and does not immediately address the 36-month cap and the
post-cap payment rules, which took effect Jan. 1.

AAHomecare leaders fear, however, that Congress won’t budge on
the cap before a reform plan is in place.

“While everyone would like to eliminate the 36-month cap or get
a better set of payment rules, both are difficult targets to
achieve in the current political environment,” said Tyler Wilson,
president of AAHomecare. “Many within the oxygen community view the
likelihood of more cuts to oxygen as an imminent threat. The big
challenge right now is to develop a consensus plan that will
address both the immediate issues and the longer-term goal of
reform.

“All of us face real peril at the hands of Congress and CMS if
the oxygen provider community does not present at least a core of
common principles to address the issues.”

Members of the new coalition — which includes some state
associations, VGM, The MED Group, the CQRC and AAHomecare — all
agree long-term reform is needed and the cap must be repealed, but
they are at odds over how those things can be accomplished. State
association representatives held a conference call last week to
make sure they were “all on the same page,” said one state exec,
and participated in calls with AAHomecare to try to hammer out
their differences before lobbying in Capitol Hill offices
Wednesday.

“There are different versions of what reform might look like,”
said Teresa Tatum, executive director of the Georgia Association of
Medical Equipment Services. “There is some agreement, but the
major disagreement is on the payment methodology.”

In addition to the AAHomecare/CQRC plan, two other reform plans
have been proposed by Big Sky AMES and Jason Rogers, president of
GAMES.

“We think we have a vehicle that can give us an immediate fix
[to the rental cap],” said Calcaterra about the Big Sky plan.
“AAHomecare brought their proposal they worked on with CQRC —
and a lot of work, a lot of time went into that — but we
didn’t see any immediate fixes in it,” Calcaterra said. “It’s
big-scale reform, and that’s going to take a while. We are worried
about providers being there when the reform takes place. We feel we
have the plan for realignment on how they pay for the service that
would eliminate both the cap and competitive bidding.”

The AAHomecare/CQRC plan, developed with the help of former CMS
acting administrator Leslie Norwalk, repeals the cap, changes the
status of oxygen entities from “suppliers” to “providers,” exempts
oxygen from competitive bidding and would reimburse providers for
patient services, as well as equipment and supplies, in a bundled
payment. In addition, the plan is budget-neutral, a plus AAHomecare
points out considering the nation’s current economic pressures (see

AAHomecare Unveils Oxygen Overhaul Plan, HomeCare
Monday, Jan. 12).

But the overhaul plan includes a case-mix adjusted payment
system that bases reimbursement on patient ambulation, liter flow
and modality — a methodology some providers have said they
are wary of.

According to Calcaterra, the Big Sky plan rearranges monies in
the benefit to reimburse more appropriately for service and
realigns payments so they aren’t “front-loaded.” Dubbed the “oxygen
flip plan” by some stakeholders, the plan “flips” priority of
payment dollars from stationary to portable.

Rogers said his “blended” plan “is an attempt to unite the
several plans put forward.” His plan includes elements from both
the AAHomecare and Big Sky plans and addresses other concerns he
has heard from providers and groups around the country. It also
provides for possible implementation of a prospective payment
system.

Even as they grappled with how to move forward, stakeholders
were preparing to visit lawmakers Wednesday to urge repeal of the
oxygen cap. They will be armed with a sign-on letter generated by
Rep. Tom Price, R-Ga., who last year introduced legislation to
repeal the cap. While the content of the letter had not been
finalized as of Friday, it was believed to assert that the Deficit
Reduction Act, which mandated the rental cap, also instructed CMS
to establish adequate payments for oxygen.

“That’s where we have the problem,” said Tatum. “After 36
months, there aren’t adequate payments.”

Price was expected to ask his colleagues to contact CMS and
appeal to the agency to address the issue administratively. “It
appears that everybody [in the oxygen coalition] agrees that those
post-cap payment policies should be addressed through the authority
that CMS already has,” said Tatum. “I feel like we are all going to
come together behind this letter.”

Calcaterra is hopeful that the industry can reach agreement as
well on a long-term plan. “We truly want to reform it, but we are
also trying to make Congress and CMS understand that there is so
much more to what we do than just [deliver] a piece of equipment,”
Calcaterra said. “There is absolute disconnect between the
requirements to be a provider and the payment modality …

“It is critical to get the industry behind whatever [the reform
plan] ends up looking like,” he added. “We’re already seeing
problems for beneficiaries being able to travel, relocate.”
Calcaterra said he’s heard of one provider wanting to charge as
much as $4,000 to take care of a “snowbird” seeking relief in
Florida from the cold in his home state. “I haven’t seen proof of
that yet,” he said. “But the bottom line is that the beneficiary is
caught in the middle of that.”

So are providers. “The cap is still the cap,” lamented Bill
Baker, RRT, president of RxO2 in Tucson, Ariz., “and every month
[means] thousands of dollars lost. We still have to provide the
services at no fee … so the bleeding is still perfuse. The
members of this industry are hemorrhaging to death in red ink.”