Comments on Oxygen Rule Blast CMS

ATLANTA — CMS got an earful from home medical equipment
providers, respiratory therapists, physicians, beneficiaries and a
host of other entities that weighed in with comments about the
agency’s 2009 physician fee schedule final rule, which includes
payment policies that apply to reimbursement after the 36-month
oxygen cap.

Implemented Jan. 1, provisions in the final rule mandate that
providers continue service to Medicare oxygen patients for up to 24
months past the rental cap with no payment. They also require
providers to continue service to patients who move out of their
service area or who travel.

In public comments ranging from lengthy and detailed to brief,
the writers — including the American Association
for Homecare and the Council for Quality Respiratory Care — were
almost universally unsupportive of the rules surrounding the cap,
calling both for their repeal and for reform of the oxygen system.
The vast majority of comments, which were due Dec. 29, centered on
the costs of service that will not be covered post-cap, access
issues for beneficiaries, increased emergency room visits and
hospitalizations — and CMS’ apparent inability to understand
that oxygen is not on par with a walker.

“In order for Medicare to appropriately provide a home oxygen
therapy benefit, the program should be completely reformed in a
manner that increases provider accountability, recognizes the
service component and links reimbursement to patient need,” wrote
the CQRC, a coalition of oxygen manufacturers and providers.
Current policy does not differentiate among beneficiaries based on
their needs and activity levels, the CQRC said, and it overlooks
the service component entirely.

The group said the new rule “takes an unprecedented step in the
history of the Medicare program and indicates that suppliers do not
need to be compensated for the services and supplies they provide
to beneficiaries.”

In its comments, the CQRC asked for a per-month rate to support
emergency maintenance and services, and for disposable supplies and
nonwarranty parts of not less than $25 a month. “CMS has clear
authority to pay for them,” the CQRC said.

The American Association of Homecare drove home the point and
said there is a “mistaken assumption that Medicare pays too much
for equipment without accounting for the support services that are
bundled into the monthly fee schedule amount.”

AAHomecare also asked for revisions in the final rule, including
reimbursing providers for nonroutine services and resetting the
payment cap for beneficiaries who relocate outside their provider’s
area. “The policy is completely unworkable because suppliers may be
unable to operate in the beneficiary’s new location as a result of
licensing or regulatory requirements,” AAHomecare said.

On Friday, the association released a detailed proposal for
reform of Medicare’s oxygen benefit.

Tom Coogan, director of industry affairs for Care Medical and
Rehabilitation Equipment in Portland, Ore., reminded regulators
the cost of providing oxygen largely lies in the service.

“Only 28 percent of the true costs associated with providing
these services are in the acquisition costs of the equipment. The
remaining 72 percent of actual costs is associated with delivery,
pick up, operations, maintenance, repairs, and customer service,”
he noted. (For more on a study from Morrison Informatics on which
these figures are based, see New Study Documents
Cost of Home Oxygen Services, HomeCare Monday, July
10, 2006.)

Coogan added that CMS “constantly” compares industry pricing to
online wholesalers “who do not provide comparable services or
products. Internet dealers who ‘drop ship’ product do not include
delivery or pick-up, do not meet the mandated 25 quality DME
Supplier Standards, do not maintain adequate inventory, generally
must sacrifice both quality and safety to reduce pricing, often
utilize Internet sales to circumvent state taxation schedules,
provide no maintenance or service to the patient and do not bill
insurance that can often take 60-120 days for payment.

“This dramatically reduces overhead to lower pricing while
ignoring CMS’ mandated requirements, and yet CMS continues to apply
fallacious reasoning that compares ‘apples and horses’ rather than
‘apples and apples.’”

In addition, Coogan said, “Oxygen equipment is mechanical in
nature, and thusly demands occasional repairs and routine services.
Much like an automobile, if regular maintenance and service is
neglected, oxygen systems will not operate efficiently or
correctly. Utilizing this analogy, CMS is forcing home care
providers to yield free extended warranties, free replacement parts
beyond the initial manufacturer’s warranty, free roadside
assistance, free in-home maintenance and service with free rentals
if necessary, free travel rentals and free payments past 36 months
for 24 additional months at deeply discounted prices that are below
our actual costs. Needless to say, this policy is shortsighted and
punitive to beneficiaries and providers alike …

“Unfortunately, legitimate providers like Care Medical are now
being forced to decide whether patients will get life-sustaining
services or not dependent on costs.”

Excerpts from a sample of additional comments follow:

— David Petsch, Georgia: “I am certain
that this bureaucratic department is in total breach of contract to
the government and taxpayers and should be held liable for the
damage and injury to occur to any of these Medicare recipients.
Under their own accountability, they themselves, years ago,
determined that oxygen was a drug that needed to be handled under
different life-threatening rules. Instead, now, they themselves are
suggesting it be bought and sold as any other commodity on the
Internet and the streets. For this they should be held
accountable.”

— Hal Freehling Jr., Ohio: “The rule
imposes new obligations on suppliers that, under any measure,
exceed what the Medicare program demands from any other provider.
Among the extraordinary new obligations facing suppliers are
requirements to provide emergency services and disposable supplies
without compensation for as long as 24 months after Medicare
payments cap and a requirement to continue serving beneficiaries
who move or travel outside the supplier’s service area … Under
the new rule it will also be next to impossible to continue to
support and service patients that travel outside a supplier’s
service area. Oxygen is not a long-distance service.”

— Sandra McCune, Michigan: “As a hospital
[registered nurse] care manager, I see many potential problems with
these new rules regarding discharge planning and access to oxygen
for patients. We will be caught in the middle of patients who have
the right to choose any DME provider, and DME providers who won’t
accept patients who are well into or past their 36 months. There
will be delays in discharge, confused and upset patients, and we
will have to waste time on this that could be much better spent. If
the discharge plan is for the patient to move to a different area,
it would be an even bigger nightmare.

“How is the DME provider supposed to find a new supplier for the
patient when that supplier will not be paid? For that matter, how
are DME providers expected to provide free services and supplies
for possibly decades for these patients? I urge you to rescind this
ill-conceived regulation.”

— Beth Blair, Kentucky: “Not only will
Medicare patients be the ones to suffer from less service due to
companies not being able to stay in business due to the cap, it is
unreasonable for CMS to think a company can continue to do business
for a patient for five years when you only get paid for three!”

— Daniel Shields, Pennsylvania: “I am
afraid that removing the ongoing rental revenue stream will place
many companies in the position of having to not accept Medicare
patients or decrease the services we currently provide to them.
This would effectively ‘chain’ a patient to their concentrator or
induce a patient to go without their portable oxygen. This would
result in increased emergency room visits and hospitalizations. One
day in the hospital is more expensive than one year of home
oxygen.”

— Kathy Brewer, Florida: “Oxygen is life
support, not a capital asset like a wheelchair. A cap on this
service is morally reprehensible.”

— Jeff Meischen, Texas: “CMS is requiring
all suppliers to be accredited in 2009. Accrediting bodies require
that suppliers define their service areas and not accept or
continue to service patients that do not live within those areas.
In some instances, this [rule] is requiring a DME supplier to break
the law. This in itself is a violation of supplier standard No. 1,
which requires that suppliers adhere to all local, state and
federal laws and accrediting body standards. If a patient resides
in one state and moves across the country to another state, that
supplier would have to be licensed in that state to provide the
patient with oxygen. Since the rule only allows that the provider
that was paid the 36th month can bill for portable contents, this
responsibility cannot be transferred to another provider. The
billing provider would have to be licensed in the state that the
client now lives. However, most states will not issue a license to
a company that does not have a physical site in that state.
Therefore, no license can be obtained. The supplier is clearly
between a rock and a hard place. Regardless of what the supplier
does, they would be violating a law.”

— Tammy Horsnby, Texas: “Although the DME
companies will abide by the policy and offer the patients what is
needed, the ‘extra’ services that enhance the care the patients
currently receive will dissolve … The changes will stop all of
the [extra] services, as well as put some DME companies in
jeopardy. In today’s economy, the last thing we need is more lost
jobs, but that is what will happen if this policy goes into effect.
We have already heard locally of many companies shutting their
doors because they can no longer afford to operate with the cap and
cut.

“Until CMS has a firm understanding of how DME companies work
and what our services involve, CMS will never understand how
important the repeal of this policy is. It is vital to providers,
as well as patients, that this cap is deleted. The repeal will not
only protect patient health, but also protect jobs and
families.”

As of Friday, a tally of the comments that had been received was
not available from CMS, and the agency was still adding comments to
its posting.

To view comments on the rule,
click here, then click docket CMS-2008-0073.