Lawmakers threaten major cuts to oxygen reimbursement

Sunday, July 29, 2007

WASHINGTON - Lawmakers continued to work Friday on legislation that would make deep cuts to Medicare oxygen reimbursement as part of a plan to fund other healthcare spending.

Early Friday morning, members of the House of Representatives Ways and Means Committee finalized language in a bill that proposed cutting oxygen reimbursement to 18 months from the current 36 months. Earlier in the week, the committee had proposed cutting oxygen to 13 months.

Friday afternoon, the House Energy and Commerce Committee continued to toil over its version of the Children's Health and Medicare Protection (CHAMP) Act of 2007. Industry officials did not know if that version of CHAMP included a proposal to cut oxygen reimbursement.

Once complete, the House Rules Committee must review and resolve differences in the two bills. The full House then votes on the final bill.

The Ways and Means bill would exempt "oxygen generating portable equipment," which includes portable oxygen concentrators and transfilling devices like Invacare's HomeFill. Additionally, the proposed reimbursement cut would not extend to the first round of national competitive bidding.

Money raised by CHAMP would be used to provide health insurance for more low-income children and repeal Medicare cuts of up to 10% to physicians. The bill would also increase subsidies for low-income Medicare beneficiaries.

Besides cutting oxygen reimbursement, House members have proposed to pay for the new spending by raising the federal tax on cigarettes by 45 cents a pack and decreasing payments to Medicare Advantage plans.

The Senate version of the bill proposes to pay for the spending by raising the cigarette tax by 61 cents. Under heavy pressure from tobacco lobbyists and representatives from tobacco-growing states, House members opted for the smaller 45-cent tax.

"It's a great irony," said Cara Bachenheimer, Invacare's vice president of government relations. "They couldn't get support on the tobacco tax, so they lessened it, making it easier for people to get cigarettes. At the same time, they are going to make it more difficult for people who need oxygen services to get them."

Over the past 10 years, Congress has reduced Medicare reimbursement for oxygen therapy by nearly 50%, according to AAHomecare.

Industry leaders acknowledge that the odds are slim that the House bill will not include an oxygen cut. However, thanks to strong Senate support, those odds improve significantly when the Senate and House compromise on a final bill to send to the president.