Want to Get Out of Oxygen Biz? Not So Fast, CMS Says

BALTIMORE — If you've decided CMS' new post-cap oxygen payment rules are unworkable and you'll simply get out of the Medicare oxygen business, think again, an agency official said last week.

"The federal law requires that suppliers of oxygen in the first month must continue to furnish until the end of the reasonable useful lifetime [of the equipment]. Regulation requires this through month 36, and the statute requires it beyond 36 to the end of lifetime. If you are in business and just want to get out of the oxygen or DME business, you don't have that option if you're currently furnishing oxygen to Medicare beneficiaries," said the agency's Joel Kaiser, deputy director of DMEPOS policy.

"You don't have to take on new patients," he continued, "but you are bound by regulations and law to continue furnishing oxygen for that patient until the end of lifetime. If you're going out of business for reasons beyond your control, such as for financial reasons that are not a business choice, that is a different matter," Kaiser noted, although he added those suppliers "would have to make arrangements as they have in past for dealing with that situation."

Kaiser made the comments during a question-and-answer session at a CMS Open Door Forum held Tuesday. With more than 450 listeners jamming the teleconference phone lines, callers asked a myriad of questions about the new post-cap rules and begged for guidance on how and for what they would be paid.

With the Jan. 1 implementation date nearing, one caller implored, "Please keep in mind we are very close to implementation and we need some direction."

Kaiser said he could not answer questions related to the "reasonable useful lifetime" of oxygen equipment or new CMN and proof of delivery requirements, noting that further guidance would be out "soon." Billing instructions for replacement of oxygen equipment would also be furnished "in the near future," he said.

Kaiser did, however, provide answers on several specific issues that callers raised:

• On damaged equipment: "For loss of equipment, such as if it's damaged in a fire, Medicare would pay for replacement and a new 36-month rental period would begin. If equipment is stolen, Medicare will pay for replacement and a new 36-month rental period would begin. If equipment is irreparably damaged — meaning from a specific incident of damage, not just being worn out — Medicare would replace it and a new 36-month rental period would begin."
• On the five-year equipment lifetime: "The current regulation and our program instructions state that the reasonable useful lifetime starts at the date the equipment is delivered, not based on the age of the equipment. We understand with the new rules for oxygen equipment that ‘reasonable and useful lifetime' takes on a very new meaning because not only is there a period of time after which equipment can be replaced if a beneficiary elects to replace equipment, but now there is a period of time in which the supplier is obligated to furnish the equipment that they were paid to furnish during the 36-month period. We are aware of issues related to reasonable and useful lifetime and the new issues that the new rules present; we will address those and we are aware of them. I can't address those today before official program instructions are ready to go out."
• On patients who are prescribed a higher oxygen volume after 36 months and need a change to different, more costly equipment: "There is no provision that allows us to make any special [payment] adjustment after the 36-month cap; that was not provided in the legislative change ... Volume adjustment was not discussed, so I encourage you to bring out this issue and submit comments." In other words, a change in medical need is not a reason for paying for replacement equipment.
• On patients who move out of a provider's service area after they've capped: "For that percentage of Medicare patients who do use the equipment for 36 months or more, there are new payment rules. These payment rules are on the new law, and these payment rules do not provide exceptions for when a beneficiary relocates out of their area. It's very simple — those are the new rules. So the supplier is responsible for essentially a five-year period. That is the new law. That is was what enacted. The change in the law did two things: It allowed the buyer to keep the equipment, but in exchange for that, the buyer must continue to provide equipment for beneficiary. If the beneficiary does not own it during those two years, and takes it with them to Florida, then the supplier has to provide equipment for the beneficiary."

On this point, one caller commented, "I can't stress enough the problems we foresee for patients who move out of their original supplier's service location."

Another asked if there was anything in the rules to prevent suppliers in a patient's new location from contracting above the Medicare allowable, to which Kaiser responded in so many words, no.

Take It Up with Congress

A similar barrage of questions and comments was directed at Kaiser during a Jurisdiction C DME MAC Ask the Contractor teleconference held last Monday. During that call, one provider wondered what happens if a patient relocates to a state that requires licensure to provide oxygen. His question prompted the following exchange:

Kaiser: "What the law mandates is that the supplier who received the three-year upfront payments, the 36-month payments, must continue to furnish the equipment for the remainder of the reasonable useful lifetime.

Caller: "But I can't go against statutes in other states. You're forcing me to provide something in those states that I will be held accountable for. State law tells me that I've got to have that license in that state, and if I'm not licensed in that state to practice, then how am I supposed to do that?"