Funding Focus

What Will the Future Bring For Oxygen Providers?

• By Claudia Amortegui
• Sep 01, 2006

Where will oxygen providers be in 2007? 2008? Unfortunately, the answers are unclear. We have some guidelines from the Centers for Medicare and Medicaid Services (CMS); however, much of it is vague and some of it is simply inconceivable. Our fight has already started.

Other questions for you to ask yourself as an individual provider are what are you doing? What do you know? This is typically when people try to find the words, scratch their heads and shrug their shoulders. By all means there are some extremely involved companies and individuals, but they are the minority. It is time to learn and speak up. If you don’t, you may just be digging your own hole.

So what issues are we facing? Obviously, allowable reductions have been no secret to anyone.  Then we have the Deficit Reduction Act (DRA), which has taken away the lifetime rental and placed a cap of 36 months, and the government is even trying to reduce that to 13. Finally, there is competitive bidding. Each one of these is its own war, not just a battle. Let’s review the big pieces of each; just keep in mind that you cannot ignore the smaller ones. We have to start somewhere.

It is my opinion that CMS and other officials are not looking at the whole picture. They are truly comparing apples to oranges. Yes, there is a set allowable, but in no way can we compare this to the price providers pay manufacturers for the product. People are thinking this is “just a piece of equipment.” They forget that this equipment provides people the ability to live by giving them a “drug” that cannot just be handed out without any thought.

An independent research firm, Morrison Informatics, recently conducted a study that proved what most of us in this industry already knew. The cost of the product is minimal compared to the service expense incurred during delivery, maintenance and regulatory compliance of oxygen. With this said, in the area of competitive bidding, it will not only be small providers that lose, but also patients. You need to know your business; you need to understand where your numbers are coming from. If you are in a city that is selected, your bid needs to be realistic. If it is not, you may win the bid, but you may also run yourself out of business or your clients will suffer.

When we look at the DRA and cap for oxygen equipment, we do not know the answers. Currently, CMS has said that once the cap has been reached, the patient would own the equipment. This creates some big concerns. End-users may be left out on their own. Currently, providers have the responsibility to maintain everything, but with the cap the requirements will change. This is one area where the information is still very vague. Because of this, it is the time to fight.

Luckily, the industry is receiving support from some key people within the government. Representative Tom Price (R-Ga.) introduced a bill eliminating the oxygen provision from the DRA. As a physician, he understands the issues and the problems that will arise if the cap takes place. This bill is receiving a large amount of support, but without the push of providers or end-users, it could fall through. This is why it is up to each of you, and all of those you know, to join in the fight. We need to educate all of those within the government in order for them to understand that they are not just talking about a basic piece of equipment.

Lastly, we cannot forget the importance of technology. In the midst of the reimbursement issues, manufacturers are developing new products. As their customers, providers will want to learn about the features and benefits of those products. These may allow your business to run more efficiently. There is plenty of clinical, product and funding information to keep up to date on. Respiratory Management will be key in this process.

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