Monday, January 31, 2005

VIENA, Va. - The National Association of Medical Directors of Respiratory Care (NAMDRC) is circulating a draft position paper that seeks an end to the “modality neutral” payment formula for home oxygen and the beginning of a “modality specific” formula that would increase payments for liquid oxygen and reduce payments for concentrators.
Tom Petty

The Long-Term Oxygen Therapy (LTOT) Joint Consensus Statement, now under review at the American Thoracic Society and the American College of Chest Physicians, makes five recommendations, including two that would cause far-reaching changes to HME supplier business.

The physican group’s first recommendation calls on Congress to revise the payment formulas for oxygen between stationary systems and ambulatory systems. Another recommendation would require DME providers to stick to the modality (i.e. liquid or concentrator) if a physician prescribes one system or another.

The initiative was prompted by NAMDRC’s belief that access to lightweight, portable oxygen delivery devices has been hampered by the modality neutral formula. In other words, since suppliers of home oxygen can supply a less costly system of oxygen therapy (i.e. a concentrator-based system), patients are generally not getting access to more expensive liquid therapies.

The push for a modality specific formula is supported by Dr. Tom Petty, who is widely hailed as the father of home oxygen and who is now using home oxygen himself.

“I think modality neutral reimbursement has been a disaster for everybody concerned,” said Petty. “It’s been great for the suppliers, but it’s been a disaster for patients and for progress.”

Critics of the initiative say splitting the code is unnecessary because supply-and-demand market forces are already prompting suppliers to provide premium oxygen systems. Invacare said it has sold “tens of thousands” of its premium oxygen system, the Venture HomeFill II (See HME News, Jan. 2005).

The real key to making premium oxygen systems available to patients is not an incentive or disincentive to suppliers but education, said Barbara Rogers, president of the National Emphysema COPD Association.

“We just completed the largest COPD needs assessment survey ever,” she said. “We showed that people who are connected to support groups got much higher levels of service and quality of life. They know what they have to ask for, or they know how to get reimbursement for it.”

Market dynamics aside, critics are also troubled by the challenges raised by the possibility of splitting the oxygen code, not the least of which might be a rush to liquid by suppliers and ballooning reimbursement for home oxygen.

NAMDRC recognizes this challenge. In a recent issue of NAMDRC News, the group’s president, Dr. Steve M. Zimmet, warned against the creation of incentives.

“If ambulatory systems received higher payment than stationary concentrators, what could be done to prevent everyone from receiving the more expensive devices, regardless of medical appropriateness,” wrote Zimmet.

Critics also point out that NAMDRC is way out in front of the Medicare statute.

“By the homebound definition, [home oxygen patients] are not supposed to be going out of the home for any extended period of time with these technologies,” said one critic. “When we talk about oxygen portability from a Medicare statute point, you are talking about ambulating within the home. That’s why the payment is designed the way it is. It is weighted toward the stationary, not the portable.”

The executive director of NAMDRC, Phil Porte, who is widely credited as the driving force behind this issue, did not return calls for this article.