Oxygen to Go

How to Develop a Travel Program

Before starting its travel oxygen program, Meriter Home Health was investing a lot of time and money arranging travel for its oxygen patients. The Madison, Wis.-based provider used Freedom Link (the VGM Group travel assistance program) to locate providers offering portable oxygen in the destination city. Then the staff spent countless hours on the phone calling these providers and airlines to make arrangements. After all of the legwork, Meriter got stuck with the bill.

Jessica McMillan, respiratory care manager at Meriter, says, "Not only was it costly for our staff, but costly on the other end because if it was Medicare, we were only receiving limited reimbursement. We would have a higher out-of-pocket cost reimbursing the other company just to accommodate this patient."

If this situation sounds all too familiar, it may be time to start your own travel program. Respiratory Management asked the experts to identify the important steps to success.

Weighing the Pros
McMillan says Meriter has had great success with its travel program, which has brought in some additional revenue and helped build the company’s POC business. "We’ve actually even had some patients who are regular users purchase (the equipment) outright," she says.

Scott Wilkinson, vice president of product development, Inogen, Goleta, Calif., says that’s not an unusual phenomenon. "When (patients) get exposed to a POC for a one-week trip, it really opens their eyes to how this product can change their lives for much more than just that one week," he says.

Memorial Home Services, based in Springfield, Ill., started a travel oxygen program as a way to retain existing patients who needed to travel. The company does not charge existing patients for oxygen rental, but they do charge patients who either own their equipment or are from another provider. The program has actually brought in new customers.

"I would say we have probably gained a few customers due to the portable concentrators from other providers because they didn’t offer them at the time," says Lori Hutchinson, RN, RRT, clinical operations manager, Memorial Home Services.

Building a larger customer base and keeping a leg up on the competition have certainly been driving forces behind this segment of oxygen. Also, the niche has a tremendous cash flow potential.

Wilkinson says that as a cash business, travel oxygen is fairly profitable. "When you have people that are going on a cruise or they’re going to Europe, they’re going to spend a lot of money, and for them to make sure their oxygen needs are met, they’re willing to spend that money, too," he says. "The nice thing about the assets is that they can be redeployed over and over."

Much like a car rental proram, market demand allows providers to charge a premium for renting a POC for a week, Wilkinson says. He estimates that units are typically rented from $200 to $400 per week. "Compare that with the reimbursement for a POC, (which) is around $220-$225 per month. Just from those economics, you see that this could be pretty profitable. You could rent a unit two weeks out of the month pretty easy by turning it around. … It’s fairly easy to drive $400-$700 of revenue off the unit per month if you keep it rented and you’re efficient vs. Medicare reimbursement."

CMS’ Take on Travel Oxygen
While travel oxygen could certainly generate business with outside sources, the new rules for capped rental oxygen that went into effect in January 2009 have some providers worried about their own sustainability.

In the past, to charge or not to charge existing patients for portable oxygen has been a gray area. Now, the Centers for Medicare & Medicaid Services (CMS) seems to have cleared up the issue by requiring that providers offer travel oxygen to their patients, according to many industry experts’ interpretations.

"The way the law reads, with CMS, it is a medical provider’s responsibility to take care of that patient no matter what for the next two years if they’re capped out — for free," says Brad Werkmeister, of VGM’s Freedom Link. "You get a Medicare patient that’s capped out, legally, you can’t charge them anything. And so, it has changed."

Wilkinson explains that from CMS’ standpoint, travel oxygen should be covered with the current reimbursement. "You’re already being reimbursed to take care of (the patient’s) oxygen needs. Travel is not covered separately," he says. "It’s kind of like cannulas. You need to supply the appropriate cannulas for a patient while they’re on oxygen, but you don’t get reimbursed separately for a cannula."

Still, many in the industry are lobbying CMS to change the rule. (At press time, more details about the oxygen rental policy were expected.) As the rule stands now, providers who do not currently do a travel program would have to pay other providers to care for their patients when traveling — including snowbirds who winter in other locations — and that puts an enormous financial strain on providers.

"For example, (in) Hawaii, there’s a couple of the islands that you can’t get an oxygen concentrator for a week under $150. Well, with the 10-percent cut that Medicare just put onto all of these dealers … it’s to the point that if all they get is $150 a month and then they have a patient go to Hawaii for two weeks and it’s $150 a week, you just lost two months’ revenue," explains Werkmeister.

For patients who have capped out and are past the five-year useful lifetime of the equipment, however, Werkmeister says it’s back to business as usual.

Challenges Ahead
Whether you start a travel oxygen program to draw in new patients or to serve your own, all is not smooth sailing. "Make sure you get into (travel oxygen) with your eyes wide open and understand all of the different aspects of it," warns SeQual Technologies’ CEO Ron Richard, San Diego, Calif. "Providing oxygen in a patient’s home is completely different than doing a travel program. There are just a lot more variables; it’s a lot more dynamic. It’s more demanding."

In a dynamic environment, things can easily go wrong. Meriter, for example, faced opposition when it first started charging oxygen patients for portable systems.

"The first 90 days we had a lot of complaints," admits McMillan. "But now patients (are) very willing. We actually have recurring patients, (or) regulars."

One of the things that helped Meriter make the transition was a cost analysis. McMillan says the company researched how much patients would have to pay the airlines for oxygen onboard. She says that $110 seemed to be the average for each leg of a flight. "If they have to transfer, that’s already $220 and that’s just one way," she says. "With us providing the equipment for a nominal fee for the week, they’re actually saving money. That’s the angle that we took."

Hutchinson says it’s imperative that providers entering this market today have a good working relationship with POC manufacturer representatives to help them through the process. Many manufacturers provide assistance with program setup and customer support and have materials to help smooth out the process.

In addition, Hutchinson recommends that providers put new customers on portables from the very beginning. "A lot of times customers get used to one type of oxygen, and they don’t want to give that up," she says. "If (providers) actually put this (equipment) on (patients) from the very start of their oxygen therapy, they probably will have better luck being able to bill for a portable oxygen concentrator as their main unit."

Travel Oxygen Program Checklist
Before you jump into travel oxygen, read these tips from RM’s experts:

  1. Familiarize yourself with travel requirements. McMillan says every traveling patient needs a physician’s prescription stating liter flow and medical need. You also may want to develop a checklist to assist patients when making airline reservations. Some online resources include: Inogen’s site — www.inogenone.com/Travel/ — which offers information on several travel modes and approved airlines; AirSep’s site — www.airsep.com/medical/AirLinePOCs.html — which provides a list of airlines that currently accept the company’s POCs; and the FAA’s site — www.tsa.gov/travelers/airtravel/specialneeds/editorial_1374.shtm#2 — which offers guidelines for flying with oxygen.
  2. Consider staff requirements. With all of the minutia that goes into organizing rental POCs, it might be more than your staff can handle. Meriter, which employs eight respiratory therapists, uses the entire staff to manage the travel program.
  3. Develop a toll-free support line and a plan in case of emergency. Many industry experts agree that a 24-hour/7-day-a-week toll-free number is essential to running a successful travel business. Richard says the on-call staff also must be well-trained. "All oxygen devices that run on batteries and on electricity tend to have some sort of alarm system in them that either monitor temperature, oxygen purity or a number of things, and they put out error codes," Richard says. "When something starts beeping, the patient gets nervous, and people around them get nervous." So, on-call staff must know how to troubleshoot. Though Meriter has a 24-hour, toll-free support line, McMillan says if a patient has a prescription, they can always go to another provider in the area — especially for an after-hours emergency. Also, check with manufacturers regarding the customer support they provide. For example, AirSep runs a free travel program called TravelAssist that links providers and patients to its network of providers worldwide. The company also operates a toll-free line for patients in case they need service or a replacement unit in various countries. Inogen can drop ship a unit directly to a patient if needed. SeQual has an after-hours line for technical support that’s staffed by nurses and respiratory therapists.
  4. Match the equipment to the patient. Wilkinson says it’s vital that providers learn how to align the patient’s needs to the product. "That’s one of the keys is making sure if somebody is going on a trip that (providers are) putting the appropriate product out on the appropriate patient," he says.
  5. Comfort the patient. “The key component is customer service,” says Bob Jacobson, vice president and general manager of AirSep, Buffalo, N.Y. Be prepared to hold the patient’s hand through the process, including helping to complete paperwork. “Our experiences are that most providers go beyond the call of duty in trying to assist oxygen patients with all (of) the logistics associated with travel,” Jacobson says. In addition, providers also may have to ease patient’s fears regarding POC use, especially if this is the first time the patient has used this type of device. "Oxygen travelers have been traumatized by tank oxygen for so long that it sometimes requires a little more explanation to make them believe that this (a POC) really is a solution to many of their problems," says Tedd Ladd, director of marketing, OxygenToGo, Jackson Hole, Wy.
  6. Provide instructions. "(Patients) are on oxygen at home, but typically most people at home are on oxygen concentrators, which you just flip a switch and it’s on or off," Richard says. "They don’t change much. When you start traveling with oxygen, you’ve got batteries, you’ve got AC and DC adapters, you’ve got more cables and things. It can be confusing for a person if they’re already nervous about traveling with oxygen." For this reason, it’s important to provide clear instructions on the equipment. Richard recommends creating a laminated card with instructions on how to operate the POC, how to charge batteries and troubleshooting tips.
  7. Calculate battery needs. "The most common question that we get and the problem that most people are anticipating is running out of battery power," Ladd says. "Because (POCs) all run on electricity, running out of battery power can be devastating. This is no different than running out of air in a tank." To make sure patients have enough oxygen, the company supplies 150 percent of the travel time necessary in battery power. In addition, providers should supply AC and DC cords for travelers to plug in whenever they can. Ladd says never assume that patients will be able to plug in the concentrator at the airport or on flights, however. Ask manufacturers to provide battery usage times. SeQual, for example, supplies battery charts so that providers can calculate battery life in both pulse and continuous flow modes and determine the appropriate battery need for the patient.
  8. Scout out the destination city. Find out where the patient is going and look into the area to find providers that can support the equipment the patient is using, Richard says. Use the Internet to find providers and make calls or link up with a network. Werkmeister says a network or buying group can make locating providers in destination cities a lot easier.
  9. Get it in writing. Build a contract for working with providers in destination cities so both parties understand what the payment will be, Werkmeister advises. The contract should include patient and billing information as well as the equipment requested.
  10. Protect your assets. Get a credit card number to cover damages and also pack the equipment in such a way to minimize wear and tear. Richard says SeQual encourages providers to purchase the company’s hard-shell travel case for the Eclipse, especially if they are mailing POCs directly to patients. Also, it’s a smart idea to make sure you have the patient’s contact information on file so that you know how to get the equipment back.
  11. Understand typical problems with POCs. "There are two or three things that can go wrong with these types of devices," Richard says. "Either the AC adapter’s gotten dropped or broken, the battery’s not charged up completely (or) the cigarette lighter plug in the car wasn’t the right shape or size to plug the DC adapter into it." To help providers, SeQual has developed a Top 10 troubleshooting list. Talk to your manufacturer rep and other providers for similar advice.

"It is kind of tricky to start up a travel program. In the end, it’s just a lot of legwork and research, I would say, and decisions on how you’re going to help your patients," Werkmeister says. "To me it’s a niche. It’s cash. (Providers are) crazy if they don’t (take traveling patients)."

This article originally appeared in the Respiratory Management March 2009 issue of HME Business.

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