ATLANTA — Following CMS' Oct. 30 release of regulations involving changes to Medicare home oxygen policy and payment, some stakeholders involved in the sector said they believe the new rules are punitive.
While in July the Medicare Improvements for Patients and Providers Act reversed the oxygen equipment transfer to beneficiaries called for under 2005's Deficit Reduction Act, it left the DRA's 36-month oxygen rental cap in place.
According to the new regs, which implement changes in both laws, post-36 months providers must continue to provide oxygen contents to the patient for the remainder of the five-year useful life of the equipment, for which they can charge. But they must also service and maintain the equipment over its useful life (based on when the equipment is first delivered, not the age of the equipment) for which they can't charge. There will be a minimal service reimbursement in 2009 only.
Should a beneficiary move out of the provider's service area, that provider is also required to make arrangements with another for the patient's oxygen service.
"Many see this as a last swing from [CMS Acting Administrator] Kerry Weems and [HHS] Secretary Leavitt, more so at Congress than our industry" because lawmakers decided to delay competitive bidding, VGM Group's John Gallagher, vice president of government relations, said during a legislative update Friday.
Added Mark Higley, VGM's vice president of development, "To me as a regulatory analyst, it is perhaps the worst piece of rulemaking that I have ever read, and let me tell you why: You in the provider community have effectively no choice but to continue serving your patients that you are currently serving. You will continue to maintain and repair—at virtually no reimbursement whatsoever—this equipment through five years."
Gallagher said by the end of this week, VGM will prepare letters for its members to explain the situation to their Medicare patients, in addition to letters those beneficiaries can send to their congressmen.
The American Association for Homecare also said it will be talking about oxygen problems with members of Congress "to illustrate the flaws" in the policy, and is encouraging providers, their referral sources and patients to call federal legislators with their concerns about the changes.
On a conference call last week, AAHomecare's Regulatory Committee began sorting through the regulations and "will be responding to CMS, asking them for specific guidance as well as trying to make our case on several of the issues," said the association's Walt Gorski, vice president of government relations. "There are many twists and turns to this policy. We are working to develop a list of questions for CMS and show the real-life implications that these rules create."
Real-Life Bind
In the meantime, providers said their real-life situation leaves them in a bind. Some said they won't be able to comply if the oxygen rules stand as currently written; others said they simply won't be able to stand at all.
"If the rules remain as they are, we nor any company can afford to provide the service," said David Petsch, president of Petsch Respiratory Services in Martinez, Ga. "We would simply not be able to survive.
"The area that I most hate to see is that providers will have no options and be forced to violate regulations," Petsch continued. "That, again, can and will be used against the industry for CMS. I know the patient is the victim, but so, too, are small businesses like my own. [This] will make Medicare unprofitable, and the quality of care will so severely drop that it will cost shift the financial burden to Part A … I truly believe we are at the end of the profitable road and have nothing but horrible options."
"This is a recipe for bankruptcy," commented a provider on VGM's conference call, referencing "the notion that you can make Americans work for free … We're prisoners."
"I think this is making providers consider whether or not they will even provide oxygen," said Joan Cross, co-owner of C&C Homecare in Bradenton, Fla. "I can't even put gas in my car for what they are going to pay for maintenance. It's ridiculous. I can't afford it."
Cross is even more concerned about her patients, she said. "They are going to be very confused as to why I can't come out there and make sure their machines are OK for the 15th time. I have patients who are so nervous they want you out there, or their family does, and sometimes we're the only people they see," she explained. "But no more of that. We can't afford to send someone out and not receive anything back in with which to pay that person.
"As far as snowbirds," Cross continued, "we've already turned three or four away. We have a rash of people who come down right before Thanksgiving and we have our second run right before Christmas. If they come down now, chances are their [oxygen] company has already been paid for November, so I'll get the payment for December and if that's the 36th month, guess what happens then? I'll have to give them their supplies for the next two years. And if I do take them, then nobody's going to take them when they go back up north …
"I honestly don't know what the patients are going to do."
Cross said she is "very, very angry" at the scenario. "This [rule] that CMS put out is nothing but punitive," she said. "They are punishing us. And it makes me mad because the people that are out there committing fraud and abuse aren't going to be affected—they are not putting out the equipment! Don't tell me you are doing all this oxygen [stuff] to get rid of fraudulent people. All that's going to do is get rid of me."
No Easy Answers
Industry consultants agree both providers and Medicare oxygen patients are in a tough spot.
"To anybody that's trying to go to Florida now, good luck trying to find a provider," said Miriam Lieber of Lieber Consulting, Sherman Oaks, Calif. "Small providers just can't service the patients that are coming and going with two months left in a cap … No one's going to be able to service the patient anymore, so the patients are basically going to be accessing their ER even more than before.
"Nobody's going to take an existing patient, period," she continued. "The can of worms opens now. It doesn't open in two months, it opens now. There are too many questions and no definitive answers."
Lieber said she thinks the industry could see a 5 to 10 percent attrition among very small providers due to the oxygen cap and related issues on top of the across-the-board 9.5 reimbursement cut that takes effect Jan. 1.
"They will look for other things to do because I don't think they can make it anymore. This is really it. Their time is up," she said. "There's so much confusion and there's so much that's up in the air, even more so with the way the economy is, it's too scary to continue in this kind of a venture when you're not sure what's going to happen."
According to Wallace Weeks of Weeks Group, Melbourne, Fla., "It looks like the provider gets into the warranty business no matter where that concentrator came from … It's a pretty crummy situation and there is a great deal of uncertainty in it with respect to the service requirements that providers have.
"Nobody has really compiled and analyzed what those service requirements might be," Weeks pointed out. "How much is it really going to take to service that equipment for those last two years after the cap? There's a giant unknown there, and there's no data that I know of to give us a clue as to how much we're really going to have to spend."
Don Clayback, vice president, government relations, for The MED Group, Lubbock, Texas, summed up providers' plight:
"The released regulations are extremely disappointing," he said. "How does CMS expect a provider to continue to provide 24/7 support for oxygen dependent beneficiaries with no payment? How does a provider perform two in-home maintenance calls on an annual basis for a total payment of $60? How is a provider in Pittsburgh responsible to provide equipment to a beneficiary who moves to San Diego and not receive any reimbursement? How can a provider supply a product that is used 24 hours a day and get no payment for required repairs over a five-year period?"
What's more, he said of the 60-day comment period on the new regs—which ends Dec. 29—"how does CMS publish rules with a comment period that ends two days before the regulations go into effect? What kind of input is that?
"Unfortunately, the provisions show a real lack of understanding as to the services a provider gives to a Medicare beneficiary. They also show a lack of an even basic regard that businesses cannot provide services with no reimbursement," Clayback concluded.
"The industry will have to work through both CMS and Congress to get these ridiculous issues fixed so that there are not major problems for oxygen patients in January. This has been an ongoing battle with CMS, and we are now entering into another round."