The Rainy Days of Oxygen Industry Legislation

• By Deborah Cooper
• Sep 01, 2006

1989 Six Point Plan
Inexpensive items such as nebulizers became “capped rental” items. Oxygen now considered a “frequently serviced item” and was rented for as long as medically necessary; “modality-neutral” payment system established.

1997 Balanced Budget Act
Reduced oxygen reimbursement by 30 percent and imposed consumer price index freezes that are still in effect today.

2005 Medicare Modernization Act, including the Medicare Prescription Drug Plan
Aimed to control the growth of reimbursement levels of oxygen therapy; proposed the 36-month rental cap and transfer of equipment ownership to the beneficiary. Also proposed changes to other capped rental items.

2005, July (A Sunny day!)
The Federal Aviation Administration (FAA) issued a rule allowing the use of a Portable Oxygen Concentrator (POC) onboard commercial aircraft.

2006 Deficit Reduction Act
Introduces competitive acquisition, or “competitive bidding;” formation of Program and Advisory Oversight Committee (PAOC) for implementation.

2006, July
CMS announces changes in the way oxygen is reimbursed, depending on the technology used. Sharp departure from “modality-neutral” payment system.

2006, August
CMS publishes quality standards for competitive bidding.
Note: Dates reflect effective dates, not initial approval dates

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