AAH oxygen study challenges assumptions

Sunday, July 2, 2006

WASHINGTON - Thanks to a groundbreaking new study, the HME industry can no longer be criticized for relying on "emotional arguments" to fight the 36-month cap on Medicare oxygen reimbursement, say industry leaders.

The industry now has data to back up its claims that oxygen shouldn't be treated like a commodity and providers like drop-shippers, according to AAHomecare, which commissioned the study.

A highlight of the study: Services make up 72% of the costs of providing oxygen. Equipment accounts for only 28%.

"We've often been criticized for using emotional arguments vs. science-based arguments to oppose change," said Joe Lewarski, vice chairman of AAHomecare's HME/RT Advisory Council. "Obviously, any time you talk about patient care and altering access and quality, it's an emotional issue. But now we have facts that we can use to influence members of Congress."

AAHomecare released the results of the study during briefing on Capitol Hill last week. According to Michael Reinemer, the association's vice president of communications and policy: About 40 congressional staffers squeezed into Room S-120, including staffers who represent legislators on key committees: Ways and Means, Energy and Commerce, and Finance.

The industry plans to leverage the study to garner support for a recently introduced bill that would repeal the oxygen cap. If the turnout at the briefing is any indication, that plan is already working, said Tom Ryan, AAHomecare chairman.

"It was standing-room only," he said. "People on the Hill are hearing us. They need to stop talking about the price of an oxygen concentrator and start talking about service."

The study goes head-to-head with information distributed by supporters of the cap, which was passed as part of the Deficit Reduction Act earlier this year. The industry also expects the study to go head-to-head with a highly anticipated oxygen study from the Office of Inspector General (OIG).

The industry likes the study's chances of holding its own. The research firm that conducted the study--the Mechanicsburg, Pa.-based Morrison Informatics--is independent and well respected, sources say. Additionally, the study's sample size--74 providers serving more than 600,000 beneficiaries, or more than half of the Medicare population receiving home oxygen--is unprecedented, they say.

In the event that the bill to repeal the cap fails to pass muster, the industry can use the study to negotiate appropriate reimbursement for services, Ryan said.

According to the study, providers supply the following services to patients: intake, preparation and delivery; scheduled and unscheduled maintenance; assessment, training and education; ongoing support, including refills; and compliance with regulations.

The overall per-patient per-month cost for home oxygen therapy (stationary, portable and back-up unit) is $55.81 for equipment and $145.39 for services, for a total of $201.20, according to the study.

"This is real data--my company was right on line with what came out in the study," said Ryan, CEO of Homecare Concepts in Farmingdale, N.Y. "In some areas like deliveries, my numbers were even higher. But, I think across the board, everything seemed to make sense."