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?”

Kaiser: “One thing is for sure: Again, there
are no exceptions to this requirement that suppliers are
responsible for continuing to furnish this equipment … That
doesn’t mean they have to physically provide the concentrator or
the liquid or gaseous equipment.”

Caller: “But if I’ve got a company that …
says, OK, we’re going to charge you $400 to take care of that
patient, then I’ve got to pull $400 out of my pocket to pay another
provider in another state, and that’s well above and beyond what I
got reimbursed by Medicare.”

Kaiser: “Take it up with your local
congressperon because you can’t in any way be released from this
statutory requirement … Write your local congressperson to
express your concerns, because that is the current law.”

At a third teleconference last week on the post-cap rules
sponsored by the American Association for Homecare on Thursday,
President and CEO Tyler Wilson summed up the situation this
way:

“Looking at it, the cap alone is enough to alarm even the most
financially sound provider but, unfortunately, everyone’s concern
has been exacerbated by a series of failures by CMS on a number of
critical fronts. There’s been a failure by CMS to think though the
economics of providing home oxygen. There’s also been a failure by
CMS to understand the very nature of the home oxygen benefit and
how the service we provide is a significant part of the
benefit.

“And as a result of those shortcomings and only compounding the
problem, there’s also been a failure by CMS to provide clear
guidance and other information that … providers are going to need
after Jan. 1 and clearly even now to operate efficiently,
profitably and within the law.”

Added AAHomecare’s Walt Gorski, vice president of government
relations, after the teleconference, “Here it is Dec. 12, and there
are 23 days left before implementation. People have to have time to
be able to react.”

Continued Gorski, “Many of these policies are onerous … I
still don’t know how patients who move remain the responsibility of
the original supplier. CMS really needs to change its policy. The
system, quite frankly, is simply not workable.”

Cigna, the Jurisdiction C DME MAC, posted an MP3 recording of the teleconference on its Web
site.

View a PDF summary of the oxygen rules on AAHomecare’s
Web site.

Read an MLN Matters article on the post-cap rules.

View a Q&A summary from the Jurisdiction C teleconference
on VGM’s Web site.