Under Siege

The Oxygen Industry Speaks...

• By Deborah Cooper
• Sep 01, 2006

Perhaps the most important thing to come out of these particularly challenging times is that people are sitting up and taking notice. Whichever part of the industry you serve, the bottom line message is one of concern, thoughtfulness and calls to action, motivated by a deep desire to provide the best services, equipment and treatment options for the client. When all of these factors come together in one strong voice, change can—and will—happen, for the greater good of the entire industry.

Another interesting result of current discussions is that there are a lot of positive views out there; manufacturers are looking for the silver lining in terms of raising overall quality standards, and providers have expressed a willingness to step outside of their comfort zone to grow their businesses beyond the limits determined by Medicare.

While everybody in the industry has a strong opinion on reimbursement, the other legislative changes affecting oxygen and competitive bidding, each person has a slightly different take on the matter. We decided to let the industry speak for itself.

Competitive Bidding
Joseph Priest, AirSep
I think the big question about competitive bidding is how it will flesh out. Will it mean any willing provider can bid, or will there be consolidation? Who can win and who can provide? Will you end up with big regionals or maintain the dominant form of the HME provider—the independent, community-based business owner?

Joe Lewarski, Inogen
Everytime there’s a change, it creates a new opportunity. But right now there are so many changes in a short period of time with so many unanswered questions.

Tom Pontzius, VGM
We don’t believe competitive bidding is good for the industry just because it’s designed to eliminate the very backbone of America—small businesses. [Dealers] will not get awarded business they can rely on. They can’t keep the doors open, and it will limit access to quality and new technology. And from the beneficiaries’ standpoint, it’s just not a good thing.

Dennis Cook, Medline
Competitive bidding will change the entire landscape of the HME business. You’ll see a lot more of a factory-type HME, where they are just pumping out products and getting products out as quickly as they can at a lower cost.

36-Month Cap and Transfer of Ownership
Joseph Priest, AirSep
They have thrown [together] this very poorly thought-out regulation for capping oxygen. From the clinical standpoint, from the provider standpoint and the reimbursement standpoint it creates such a problem with new technology and with patient freedom, especially if the patient is into their provider for a certain number of months and no one else is going to want to pick them up. Until we get it rectified, it’s a looming cloud over home oxygen reimbursement.

Joe Lewarski, Inogen
If we go with the 36-month oxygen rental cap, the question is how will it affect care, what will the ripple effect on technology be? If there’s nothing feeding the pipeline, will it stymie technology as resources are shifted elsewhere?

Tom Pontzius, VGM
The amount of reimbursement they are proposing does not sufficiently cover the cost of the acquisition of the equipment, or the service component provided to the patient. Regardless of that reimbursement, because of the amount, it will limit access to newer technologies for the beneficiary. It will force providers to cut services they currently provide.

Dennis Cook, Medline
On the positive side, there are a lot of passionate small-business people out there who are in it more than just to make money. People provide a service and they get great joy in providing that business in the home. I hope we don’t lose that because that relationship definitely impacts a patient’s life.

Lloyd Barnes, HealthCare Dynamics
What I’m afraid of—especially as an RT myself—is that if equipment is transferred over to the patient, a lot of routine service maintenance will fall on the shoulders of the patient that owns the equipment after 36 months. I’m afraid that safety and the therapeutic application of oxygen equipment and oxygen services won’t really happen in the right way.

Cara Bachenheimer, Invacare
CMS looks at an area and they assume an increased expenditure is bad. People are getting discharged from the hospital sooner and sicker. Very sophisticated technology allows people to recuperate or live with their chronic condition with all the apparatus they need in the home. Policy-makers are not tuned into these details. They jump to the wrong conclusion.

Irina Fursman, Sunrise Medical
The DRA has quite a few of our providers scrambling to understand the impact on their business. As a manufacturer, we are focused on doing what we can to soften that impact.

Jacki McClure, The MED Group
The ownership part [of the DRA] concerns me the most, and work in that area is vitally important. Cutting costs is one thing, but putting the burden on the patient is quite another story. We need to continue to educate physicians and congressmen on what the HME business is all about.

Joseph Priest, Airsep
The thing we have to surpass right now is the mindset that the ownership is a good thing.

The New CMS Proposal, July 26
Cara Bachenheimer, Invacare
We were just expecting to simply implement the DRA provisions and instead they caught us completely unawares. This is a proposal for a different and new reimbursement system. The most distressing thing is this is an equipment-only benefit. There is no recognition of the benefit of the provider relationship. It is all equipment focused, shown in how Medicare will pay for maintenance and service. There is no recognition of ongoing support.

Chris Kane, Pacific Pulmonary Services
What this appears to be to the provider is another 10-percent cut in the first 36 months.

Joseph Priest, Inogen
They are taking the stationary reimbursement and ensuring there is a sufficient amount there to cover the ambulatory. It’s kind of a cross subsidy. Currently they reimburse stationary oxygen and hope there is enough left over for ambulatory. There needs to be a recognition that if they keep cutting reimbursement, they are going to get to the point where the ambulatory side won’t be able to provide it. If you want an ambulatory benefit, you have to pay for it in an appropriate manner to the cost.

Lloyd Barnes, HealthCare Dynamics
I would hope that our congressmen and senators in our respective areas will take a good look at the service provided by the HME respiratory community providers and realize what the benefits are, and what is accomplished in the home care market.

This article originally appeared in the Respiratory Management Sept/Oct 2006 issue of HME Business.