Oxygen reform fight continues

Sunday, September 20, 2009

ARLINGTON, Va. - AAHomecare submitted a revised oxygen reform plan to Rep. Mike Ross, D-Ark., this month that calls for reducing Medicare's current combined reimbursement rate for stationary and portable oxygen to 90% of the 2009 allowable.

The back-and-forth, often acrimonious, debate over what shape oxygen reform should take has divided the industry for months. In August, stakeholders reached a tentative compromise, but the revised plan AAHomecare submitted to Ross has left many seeing red.

Some providers and industry groups are unhappy with the proposed 10% reduction, which they say had never been discussed in previous meetings (AAHomecare says it was). They say the 10% reduction, on top of this year's 9.5% cut, is too much for smaller independent HMEs to absorb and favors larger national providers. By reducing the combined reimbursement to 90% of the 2009 fee schedule, the monthly rate would drop from $204 to $184, according to AAHomecare.

"We have been clear and willing, and we've done just about everything we can to find consensus, and AAHomecare just isn't listening," said David Petsch, managing director of CSIHME.

Many providers prefer that the combined rate remain at 100% or drop only to 95% of the 2009 fee schedule. Deeper cuts, they say, should instead be made to stationary oxygen, which is used, for the most part, by nocturnal oxygen patients. Since nocturnal patients require little service, a lower reimbursement rate for stationary concentrators alone could be more easily absorbed, say those who dislike the AAHomecare proposal. To offset the 90% plan, providers would have to reduce services to patients, something they want to avoid.

Many providers are "absolutely furious" with AAHomecare, said one industry watcher. That's because the association's revised plan seems to benefit Apria and other larger providers, who typically have more nocturnal patients than do most small independents.

Walt Gorski, AAHomecare's vice president of government affairs, acknowledged that the new plan does not satisfy everyone, but that is the essence of a compromise.

"We've reached a point where nobody is entirely happy," he said. "We agree on the vast majority of the package, and this is the only sticking point. AAHomecare had to make a decision because time is short. It is hard sometimes to take a leadership role, knowing that you are not going to make everybody happy."

With healthcare reform on the fast track, the industry had to get an oxygen reform plan to Ross if he's to have any chance of including it in a House reform bill, Gorsk said.

The new plan attempts to:

-- Eliminate the 36-month cap;

-- Gain recognition for services provided to oxygen patients;

-- Prevent further cuts to Medicare oxygen reimbursement;

-- Demonstrate the costs involved in providing home oxygen;

-- Ensure certain basic patient protections;

In an e-mail sent out Wednesday to industry stakeholders titled "Oxygen Reform Details," AAHomecare stated the following:

Note that if the combined portable is decreased from $204 to $184 (90 percent as recommended by AAHomecare), this will increase outlays for portable from $7,344 ($204 x 36) over 36 months to $11,040 ($184 x 60) over 60 months--a 50 percent increase in payments for beneficiaries who use oxygen that long.

 For the concentrator-only category, Medicare currently pays ($175 x 36) $6,300. Estimates by Avalere (the authoritative firm hired by AAHomecare to mirror the scoring methods of the Congressional Budget Office) put the resulting concentrator rate at $87--not $105 as some have continued to maintain. $87 x 60 months = $5,220. The percentage difference is a 17 percent reduction in payments.