Letter from the Editor

Are Oxygen Providers an Endangered Species?

• By Elisha Bury
• Jan 01, 2009

Feeling a bit like an endangered species these days? With all of the cuts impacting oxygen providers this month, it's easy to see why. From my talks with industry thought leaders, one thing that continues to ring true is that many providers are seriously looking at exiting the oxygen market. Are oxygen providers on the verge of extinction?

Last month, Respiratory Management reported that both the 9.5-percent cut to pay for competitive bidding and the first patients reaching the 36-month cap on oxygen rental equipment will hit this month. Estimates were that the cuts could be as high as 30 percent for many providers.

In late October, the Centers for Medicare & Medicaid Services (CMS) unrolled a final rule on the oxygen cap. The new policy did little to ease providers' fears. Among the changes were provisions that mandate that providers continue to provide replacement supplies, such as tubing and masks, and non-routine service and maintenance after the 36-month cap, until the equipment reaches its five-year useful lifetime, without further payment from CMS. Although CMS did allot a routine maintenance fee (which could be as low as $20 and as high as $44, depending on the state) in 2009 only, providers are still scratching their heads to figure out how CMS expects such a minimal fee to justify the personnel, truck wear-and-tear and gas to get to the patient. Oh, and CMS won't pay providers for parts to fix oxygen equipment in need of repair either.

CMS justifies these views by once again remarking that what the agency pays for oxygen equipment vs. the actual cost of a concentrator is far higher. CMS is continuing to ignore the cost of services that comes along with providing oxygen. Yet, they have no problem piling the responsibility of services, like maintenance, repair, replacement supplies and even coordinating with a provider in another state to continue oxygen services if an oxygen patient relocates after the 36-month cap. If these fall under the auspices of "equipment," then our dictionary is in serious need of an overhaul.

All in all, the policy was worse than expected, and many providers must take a hard look at the numbers to see if they can afford to participate in the oxygen program at all.

Unfortunately, if providers exit the business, the impact on oxygen beneficiaries, who make up a large percentage of oxygen users, will be devastating. It's an impact CMS has once again failed to consider.

As we head into the new year, the only reprieve providers are likely to get is a legislative one. At this point, only Congress can bend the will of CMS. For this reason, providers must once again activate grass-roots activities. Start visiting your new senators and representatives — and get your patients involved.

At press time, the American Association for Homecare (AAHomecare) was beginning work on an oxygen reform policy that would take the place of competitive bidding. This new program would recognize the services that go into providing oxygen to a patient. The organization needs your voice to help shape the right policy. But don't wait. Once again, protecting home care is in your hands. Make Congress aware that when providers are endangered, beneficiaries ultimately suffer.

This article originally appeared in the Respiratory Management Jan/Feb 2009 issue of HME Business.