How many liquid O2 patients are there?

Thursday, September 30, 2004

YARMOUTH, Maine - In 2003, CMS allowed $29.1 million in charges for portable liquid oxygen (E0434), according to data supplied by CMS. CMS then reimbursed suppliers $22.8 million.

Suppliers filed 847,440 claims for reimbursement. The division of $29.1 million by those 847,440 claims is roughly $35, which is the average monthly allowable for portable liquid oxygen.

The division of 847,440 claims by 12 months would provide a rough estimate of the number of Medicare beneficiaries who are using portable liquid oxygen. That number is 70,620.

If that number were accurate, the 2,500 liquid oxygen patients serviced by Airgas would represent 3.5% of the nation’s total portable liquid oxygen base for Medicare.

But that number is low, according to Puritan Bennett. Raj Roychoudhury, group marketing manager for respiratory products, believes there are approximately 240,000 patients currently using portable liquid oxygen.

To bridge the difference between 70,620 and 240,000, Roychoudhury first allows for the Mediciare/Medicaid differential. “From the people who call in on our ad campaign, about 70% are on Medicare, so you could ratchet that number up by about 30%.”

That differential would add another 30,200 toward the PB estimate. An even greater differential might be attributed to general flux within the oxygen patient population.

“Your calculations are assuming that these are patients who are on liquid oxygen monthly for 12 straight months when in fact they may be admitted to a hospital or they could go into a skilled nursing facility,” said Mary Erslon, a reimbursement consultant at PB. “The DMERC numbers may not be reflective of site-of-service usage differentials.”

PB did a study with a specialist in claims analysis and found that the numbers of patients on extended oxygen were very small. The study found that oxygen users frequently left the DMEPOS site of service, or discontinued the oxygen service because of death or hospitalization.

Since PB launched Helios in 2000, the company has sold more than 125,000 units, said Roychoudhury.