Oxygen utilization drops

There was a huge drop-off in the number of allowed beneficiaries for oxygen concentrators (E1390) in January 2009 across all four jurisdictions, thanks to the 36-month cap on Medicare reimbursement that went into effect that month.

In Jurisdiction C, for example, the number of allowed beneficiaries dropped 32% from 407,719 in December 2008 to 277,292 in January 2009, according to data obtained by HME News through the Freedom of Information Act.

“Medicare predicted approximately 22% of patients would likely cap at 36 months (on Jan. 1),” said Joe Lewarski, vice president of the Respiratory Group, at Invacare. “But discussions with providers and the noticeable trend in the rise of stationary-only patients over the last five to 10 years suggested to me that the cap number was going to be higher than initially predicted. I think the cap impacted at least 28% to 30% (of patients), which is consistent with your data.”

The number of allowed beneficiaries dropped 31% from 213,972 to 148,114 in Jurisdiction D; 27% from 183,421 to 134,787 in Jurisdiction B; and 27% from 129,032 to 93,822 in Jurisdiction A. The total average drop: 29%.

Contributing to the drop off, industry stakeholders say, was the lack of guidance from CMS. As a result, providers held off submitting claims in the first few months after the cap went into effect. 

“What we saw in January was an industry in complete paralysis,” said Kelly Riley, director of The MED Group's National Respiratory Network. “No one filed anything.”

That was the case at Andover, Ohio-based Seeley Medical.

“We hesitated, because the rules weren't very clear,” said Joe Petrolla, president. “We talked to other providers, and they were doing the same thing. Everyone was in wait-and-see mode.”

Industry stakeholders expect the number of allowed beneficiaries for oxygen concentrators to creep back up in March and April, when CMS issued additional guidance on the cap.