Associations work hard on many fronts

Sunday, November 30, 2008

It’s been one heck of a year. We’ve seen CMS implement national competitive bidding, and we’ve seen Congress bring it to a grinding halt. We’ve seen Philips Electronics buy Respironics and The Blackstone Group buy Apria Healthcare. We’ve also seen the industry get serious about fighting fraud.

I don’t expect 2009 to be any less interesting. Not with the 36-month oxygen cap going into effect Jan. 1.

It’s hard not to have a doomsday attitude about the cap. After all, it means providers can’t bill for oxygen equipment after three years, and they can’t bill for more than two in-home service and maintenance visits for capped patients. (To put that in perspective: About 87% of the 204 respondents to our December NewsPoll reported they conduct more than two visits per year.)

Nonetheless, if all else fails, I’m asking providers to view the cap as a blessing in disguise. Here’s why:

- First of all, the oxygen cap will force providers to do more than mumble about the services they provide. They’re beginning to realize that they have to shout it from the rooftops. After beneficiaries feel the impact of the cap, I bet they’ll join the chorus. Maybe this spurs CMS to create, with the industry’s input, a new payment methodology for oxygen-one that does a better job recognizing service.

- Secondly, the oxygen cap will force providers to innovate. Maybe this means providers embrace non-delivery oxygen technology-now rather than later. Maybe this means they develop niches providing service and maintenance to capped patients. If providers fail to re-examine their businesses, they may end up like U.S. auto makers. In a New York Times column last month, Thomas Friedman wrote about bailing out the automobile industry: “Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling SUVs and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, GM threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.”
Let’s face it: The oxygen benefit is under attack. Even with the cap going into effect next month, members of Congress like Sen. Max Baucus, D-Mont., are still complaining that Medicare pays too much for oxygen equipment.

So stop clinging to the past and prepare for the future.