Stakeholders 'flip' for oxygen cap alternative

Thursday, October 6, 2011

PERRYVILLE, Mo. – Provider Patrick Naeger said he has proof that there's a better way to save money than a 36-month cap for home oxygen therapy.

When Missouri needed to cut its Medicaid budget last year, the state proposed paying for oxygen the same way Medicare does. Instead, Naeger and the other members of the Missouri Medicaid DME Advisory Committee convinced the state to adopt what they call the “Missouri Oxygen Flip”—paying less for stationary concentrators but more for portable concentrators. The move saved the state $2.1 million in its first year.

"I think this is the home run we can use to get rid of the 36-month oxygen cap," said Naeger, executive vice president for Healthcare Equipment & Supply in Perryville. "It's ridiculous that we're providing this service for an additional two years and we're not getting paid."

Under the flip model, reimbursement for portable oxygen concentrators was raised from $28.77 per month to $150 per month, and stationary concentrators was reduced from $175.70 per month to $90 a month.

Rose Schafhauser, executive director of the Midwest Association of Medical Equipment Services (MAMES), said she's given details on the model to other states faced with budget crises this year.

"Everyone's goals were met," said Shafhauser. "We have solid financial information from Missouri Medicaid that it is indeed saving them the money they estimated, and any potential migration by the stationary customers did not happen."

Provider Dave Hossman said he felt the flip model was more reasonable than Medicare's cap.

"We were going to be hit with cuts," said Hossman, director of home medical equipment at St. Louis-based BJC Healthcare. "This is less onerous, and at least you're getting reimbursed fairly on the portable side."

Missouri will continue with the flip model because lawmakers are pleased with the savings, Naeger said.

"We created a new precedent that served the provider best,” he said. “Why can't we do this on a national level and get rid of the 36-month cap? The proof is in the pudding—the numbers are there."