Massive Cuts to Medicare Home Oxygen Therapy Benefit Taking Effect January 1 Creating Acute Anxiety Among Beneficiary and Provider Communities

/PRNewswire-USNewswire/ -- As Americans nationwide prepare to celebrate the New Year, the home oxygen community is looking to 2009 with great unease due to significant Medicare policy changes that will present many challenges to beneficiaries and providers alike. On January 1, two new policies in the form of a 36-month cap on payments for home oxygen therapy and a 9.5 percent across-the-board payment cut will take effect, deeply impacting a community that cares for more than 1.5 million elderly and chronically ill patients.

Under the new 36-month cap, Medicare will stop payment for stationary home oxygen therapy equipment and related services after the beneficiary reaches the three year mark. Despite the discontinuation of payments after 36 months, providers will still be required to continue all servicing of patient needs and equipment including patient-generated, non-routine emergency home visits and routine replacement of disposable oxygen supplies, such as tubing and masks. Providers will also be responsible for ensuring that patients are appropriately serviced even if the patient moves out of the provider's service area within or following the first 36 months of service.

"The provider community is extremely committed to making every effort to meet patient needs and provide uninterrupted services," said Peter Kelly, Chairman of the Council for Quality Respiratory Care (CQRC). "However, it is difficult to comprehend how providers can maintain patient service levels on an uncompensated basis. Based on the magnitude of these cuts, the provider community cautions that service reductions may be unavoidable as a result of business failures or financial hardship and cause potential access problems for the vulnerable patient population we care for."

Historically, the home oxygen benefit has been subject to repeated cuts. The implementation of the 36-month cap, enacted by Congress in the Deficit Reduction Act of 2005 (DRA), and the 9.5 percent cut, part of the Medicare Improvements for Patients and Provider Act of 2008 (MIPPA), translate to a 27 percent, or $845 million, cut in 2009 alone. A recent analysis from Avalere Health "indicates that the average Medicare home oxygen payment by 2009 will be less than half of what it was in 1997."

The CQRC urges Centers for Medicare and Medicaid Services (CMS) officials to exercise the Secretary's authority to create reasonable post-cap policies, including payments for emergency and non-routine services and reimbursement for disposable supplies after 36 months. CMS should also reset the cap when a beneficiary moves out of his or her service area and requires a new provider. The CQRC asks policymakers to closely monitor the effects of these deep cuts on both beneficiaries and providers to ensure that patient access to essential home oxygen care is not compromised. Ultimately, the home oxygen community hopes to work with policymakers to develop thoughtful, comprehensive reforms of Medicare policies that protect patient access to quality oxygen care.

"We want all patients to have complete access to all services related to their home oxygen care, throughout their entire period of medical need," added Kelly. "With more than one quarter of home oxygen beneficiaries requiring oxygen for more than 36-months, the impact of the cap, coupled with the dramatic 9.5 percent cut, is going to resonate throughout the oxygen community. Although providers are working hard to prepare for the approaching payment changes, these cuts are simply unsustainable and may negatively impact beneficiary care."

The Council for Quality Respiratory Care is an alliance of the nation's leading home oxygen therapy providers and manufacturers, representing nearly one half of the 1.5 million Medicare beneficiaries who depend on the home oxygen benefit for independence and quality of life.

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Flawed Medicare Policy to Have Dire Consequences for Beneficiaries and Suppliers, According to AmMed Direct

BUSINESS WIRE --Medicare’s proposed changes to its supplier policy, scheduled to take effect July 1, will have dire consequences for almost four million Medicare beneficiaries and for the companies that serve them, according to medical equipment supplier AmMed Direct.

AmMed Direct Chief Operating Officer Tom Milam recently met with senators and representatives in Washington, D.C., to ask them to address concerns about the impact of Medicare’s new competitive bidding program for Durable Medical Equipment. The competitive bidding program, set to launch in 10 pilot markets nationwide next month, will drastically reduce the number of Medicare suppliers and the fee schedule reimbursement amounts in an effort to cut program costs. The program will regulate reimbursements for many categories of medical equipment, including diabetic testing supplies, oxygen, wheelchairs and walkers. Medicare has plans to expand the program to another 70 markets in 33 states nationwide in 2009.

“The competitive bidding program will mean less choice and lower quality products and services for Medicare beneficiaries,” said Milam. “We believe, in the long run, it will cost our Medicare program more. And we also believe it could threaten the health and well-being of many elderly people who depend on quality equipment and service to manage their illnesses. We urge Congress to stop or significantly delay this competitive bidding program immediately and reassess its goals and the policies needed to reach those goals.”

Representatives John Tanner, D-Tenn., David Hobson, R-Ohio, and Jason Altmire, D-Pa., have released a letter signed by 132 House members asking for a one-year delay of the bidding program. Senators Sherrod Brown, D-Ohio, and George Voinovich, R-Ohio, are asking their colleagues to sign a similar letter. The American Association for Homecare announced yesterday that it has filed a lawsuit against the Bush Administration seeking a permanent injunction to prevent the program launch as well.

It is the opinion of AmMed Direct – and many other suppliers, third-party observers and elected officials – that the program is misguided and flawed. AmMed Direct is convinced that the program, as it is currently designed, will not save money and will likely cost the Medicare program exponentially more in related consequences for its beneficiaries.

Milam traveled to Washington along with Lorraine Farrar, director of AmMed’s Better Care Program^®, to voice their concerns and discuss potential solutions, including postponement of the program to resolve its potential problems or discontinuation of the program. AmMed Direct also communicated its concerns about the competitive bidding program to the House Ways and Means Health Subcommittee, which held a hearing on the program in May, and its chairman, Rep. Pete Stark, D-Calif.

Following is a summary of AmMed Direct’s concerns about the program. Further background information regarding the program and AmMed Direct’s position is also available. The following two paragraphs are attributable to AmMed Direct COO Tom Milam:

“The competitive bidding process has been fraught with delays, confusion and errors. Now, with implementation just days away, Medicare beneficiaries themselves will soon be at risk. In addition, numerous medical equipment companies in the affected communities will likely go out of business, and this will happen in many more markets next year. The program will also limit the overall quality of products available to beneficiaries. For beneficiaries with diabetes, it will likely increase costs for Medicare in the form of higher-cost complications, such as hospitalization, as a result of the program’s complicated and restrictive changes.

“The process has also been fraught with procedural and operational problems. Almost 70 percent of the 1,000-plus companies that submitted bids were inappropriately disqualified or denied participation by the contractor hired by CMS, including AmMed Direct. Just imagine communities losing 70 percent of our medical equipment providers. The announced ‘winning’ bids are also substantially below the bids prepared by most suppliers and even below cost for some items. There is a high likelihood that many of the ‘winning’ bidders are unsophisticated operations that have no ability to deliver the volume or quality required or a few unscrupulous bidders with ulterior motives. In either case, bidders simply did what they had to do in order to ‘win the bid’ without consideration of their ability to provide products and services successfully over the long term.”