Providers, patients high on POCs

Saturday, September 30, 2006

For providers like Bill Bayer, the Federal Aviation Administration's decision last year to allow approved portable oxygen concentrators on airplanes has breathed new life into their businesses.
Bayer, president of Medical Express in Bristol, Pa., has a handful of AirSep and Inogen POCs that he rents out on a cash basis to area patients who need oxygen and plan to travel by plane.
"(The units) are always out--and that's without promoting them," he said. "We keep adding one or two units a month."
That means a lot, considering the tough year Medicare oxygen reimbursement has had. In February, Congress approved a 36-month cap on reimbursement, and in July, CMS proposed revamping the benefit even further. Reimbursement for a stationary concentrator, for example, could fall from $200 to $177.
To help providers cope, The VGM Group recently began renting POCs to members for $500 per month; members then rent the units to patients for $300 per week. Providers have been "very receptive" to the program, said Tom Pontzius, president of VGM's Nationwide Respiratory.
"We have 50 units for rent, and we've had 40 out at one time," he said. "It gives providers another program to market and diversifies their payer mix. It helps them retain patients."
Indeed, more and more patients are requesting the units, industry sources said. AirSep has even seen a surge in the number of patients who have contacted the company directly about purchasing POCs, according to Joe Priest, president and COO.
"We're getting calls daily," he said. "The added freedom and independence that POCs provide--people are talking about it. Without a POC, any time a patient wants to travel, the coordination for everyone involved is Herculean."
Although she sees merit in renting POCs as a cash niche, Sandra Hoskin, president of Houston-based American Medical Equipment, said it "isn't a big business at this point" for her. "We've been selling them outright as much as anything," she said.
Despite a price tag of up to $6,000, 80% to 90% of patients purchase POCs outright, Priest estimates. Bayer said he's sold a few this year, and Allan Jackson, owner of Dallas-based Trinity Home Medical, said he sells about four POCs a year.
But there's something that keeps Jackson from more aggressively pursuing POC rentals as a cash niche: safety. "What happens if you're up 30,000 feet with one of those things, and something happens?" he asked. "What are you going to do?"
Last year, airlines made about 2,800 calls for emergency assistance due to in-flight respiratory problems, according to a recent article in USA Today. The newspaper's source: MedAir, which assists most airlines with emergencies.
Bayer feels confident, however, that manufacturers have "worked out any bugs." "(The units) are reliable," he said.
Renting POCs is a no-brainer, Bayer said. Patients are happy, and he's happy. Bayer no longer has to ship tanks and concentrators or make arrangements to have them available wherever a patient lands.
"It was getting tougher to provide those services with reimbursement getting slashed so much," he said. "Now they pick it up at our showroom, and they drop it off when they're done."