Report: Oxygen cap will hurt

Friday, August 31, 2007

WASHINGTON - The 36-month cap on Medicare oxygen reimbursement could mean $710 million in cuts in 2009 and $855 million in cuts in 2010--a nearly 19% reduction in the reimbursement rate, according to a July report from Avalere Health, an advisory company focused on healthcare business strategy and public policy.
The Council for Quality Respiratory Care (CQRC), a Washington, D.C.-based group of home oxygen therapy providers and manufacturers, commissioned the report.
The cuts will hit beneficiaries in Florida (19,700), Texas (17,400) and California (13,900) the hardest. Overall, almost one in five of the 1.4 million beneficiaries who use home oxygen use it for more than 36 months, the report states.
After CMS fully implements the cap and national competitive bidding, daily reimbursement for home oxygen could fall to between $4.50 and $5.50 from $7.50, according to the CQRC.
"While we knew these funding cuts were on the horizon, until now we had no idea of their true severity since the Congressional Budget Office, who determine costs of legislation, has never had the correct data to determine their impact on the home oxygen benefit," said Peter Kelly, who chairs CQRC, in a statement.
To read the full report, go to