'Herculean effort' tempers O2 cuts

Thursday, November 30, 2006

WASHINGTON - CMS issued a final rule Nov. 1 on how it will pay for oxygen equipment and services beginning Jan. 1, 2007, and by most accounts it could have been a lot worse.
"It's a little bit status quo," said one industry insider. "All of this work not to lose ground, just to stay virtually where we are. It requires a Herculean effort, but that is what you have to do."
Under the final rule, reimbursement will look like this:
During the 36-month rental period, Medicare will reimburse providers $198.40 a month for a stationary concentrator and $31.79 for portable add-ons. The draft rule proposed paying $177 a month for stationary and $32 for portable. Currently, CMS reimburses about $200 for stationary and $32 for portable. Following the cap when ownership of the equipment transfers to the beneficiary, CMS will cease payment for stationary oxygen but pay providers $77.45 a month to fill portable cylinders.
While the final rule changes reimbursement for traditional technology only slightly, portable concentrators and home transfilling units get, comparatively, a sizeable boost. For these units, the final rule increases reimbursement to $250.03 a month from about $230. CMS officials hope the additional reimbursement will provide incentive for providers to offer this advanced technology to patients. However, following the cap, providers will receive no additional payments.
"It's good from our perspective because the administration realizes the cost effectiveness of these new technologies," said Cara Bachenheimer, vice president of government relations for Invacare, whose HomeFill owns a big share of the transfilling market. "We're pleased."
Despite the relatively benign payment changes, the industry still has its work cut out for it. It must continue efforts to prevent additional cuts, and lobby to eliminate the oxygen cap and/or nix the transfer of equipment ownership to the patient following the cap.
"There's still a lot of work to be done," said AAHomecare Chairman Tom Ryan.
The final rule address issues related to the 13-month cap on DME and the 36-month cap on oxygen. Both were included in the Deficit Reduction Act and took effect Jan. 1, 2006. In crafting the final rule, CMS officials gave a nod (a small one) to industry comments that providers give significant service to beneficiaries--that they do much more than simply drop off equipment.
Among other things, the final rule states that: "CMS will make payments for general maintenance and servicing visits every six months, beginning six months after ownership, in addition to reasonable and necessary repairs, for beneficiary-owned oxygen concentrators and oxygen generating portable equipment. Payment is limited to 30 minutes of labor based on carriers' rates." (That averages out to about $22 every six months.)
To view the entire rule, go to www.cms.hhs.gov/apps/media/press/release.asp?Counter=2043 .