Provider Perspective
Pacific Pulmonary Services' COO Chris Kane Discusses Oxygen Cap
Editor's Note: In January, more than 30 percent of Pacific Pulmonary's oxygen patients reached the cap.
How has the cap impacted your business?
Very negatively. More than 70 percent of our costs to simply be in this business come in the form of people. The majority of those people are delivering patient care. The payments that we receive in the first 36 months, when those stop, we don't change the quality or the level of our patient care, and the patients' needs haven't changed either. The service that you require from us in the 35th month is likely to be the same as you require in the 36th, 37th and the 38th. In fact, the cap has a paradoxical effect because as patients are on therapy for longer periods of time, they tend to become increasingly more sick and require more time and attention from providers than they do early on. We are faced with a terrible dilemma, which is when payments for 30 percent of our patient population more or less stop, how do we continue to deliver the same quality of care and the same services that they needed before in the absence of payments?
CMS refers to our industry as "equipment only," but are they expecting you to provide the services even though they're not technically paying for it?
What they have required in the regulation is that providers maintain the same or similar levels of services as they did prior to the cap. I may not treat you differently as a patient in the 37th month than I did in the 35th month — which from where we sit as a provider, from a patient care perspective, that's absolutely right. I don't know of a provider who is seeking to change the way they care for their patients or diminish it or to treat post-cap patients as second-class citizens. At the same time that they've asked us to maintain a level of service, they've eliminated most or all of the payments. In their minds, to be fair to them, they believe that in the first 36 months we're overpaid. So, we should essentially be storing up these theoretical overpayments and then using them to sustain ourselves when we're not paid. Theoretically, that's plausible if we were getting 36 months of overpayments, but we're not.
How are you coping with the impact of the cap?
We have made as many changes as we know how to make in anticipation of the cap to make our business more efficient. But we believe we are reaching a point where it's no longer about efficiency. CMS is pushing providers to a theoretical breaking point, where it's no longer about efficiencies; it's just about reducing patient care. At the same time, they've said we can't do that and no one wants to do that.
We get routine calls every day from patients who have unplugged their concentrator; who have tangled their medical tubing so the oxygen is not flowing, even though the device is working; whose fuses have gone out in their house and they're too old and frail to understand what's happened or fix it if they know what's happened; or they perceive a problem with the device, even if it's working fine. In all of those instances, we travel to the patient's home to remedy the problem. There is no compensation for those actions. We do this hundreds of times a week because we have many thousands of patients.
CMS has refused to pay for replacement medical tubing. So, providers are obligated to give all of our patients the replacements they need routinely for disposable medical supplies and any non-warranty parts that they need to use the device — for free. So imagine when you're talking about a patient population of 1.2 million people, providers are required to give all of these supplies away for free.
There's a new requirement that caught everybody by surprise… CMS has required that providers are obligated to care for patients through the entire cap period. Let's say you live in California and we care for you here, and you decide to move to New York. We don't currently do business in New York. We are required to find a provider for you in New York, and we have to pay them to take care of you for the entire cap period (past 36 months). The obligation is on the original provider if a beneficiary moves out of state to another location to either sustain care for that beneficiary through their own organization or to find another provider to take you. This just flat out doesn't work at all. It violates, on a technical level, many state regulations, licensure regulations, accreditation regulations and otherwise. On a more practical basis, there's no way we can do this. We can't pay other providers to care for our patients that are leaving us after the cap. We've had a handful of patients already who have moved to other areas where we don't service them, and we haven't been able to find a single provider to even do it.
It's issues like this with the cap that are going to create very significant potential problems for patient care and patient access. As a larger provider, when I understand the extent to which we are struggling with these issues, my sense is that they will only accelerate in the smaller provider community.
What is going to be your biggest challenge based on the new ruling?
The biggest challenge is going to be maintaining service levels to patients month in and month out in the absence of payments. It's already proving to be extremely difficult to do this, and we're only in the very beginning of the second month of the policy (at press time).
Are you hopeful that we can have some kind of legislative action to fix it?
MIPPA actually gave HHS/CMS the authority to create payments post-cap for things like maintenance and service, both equipment and patient services. In their initial final rule, the agency chose not to do that. They said we're going to pay for contents and we're going to pay every six months $15-30 and that's it. The rest of it is on you guys because you've all been overpaid. I'm hopeful that now that the rule has been implemented and people are able to see the difficulties that it is creating for patients, that the credibility of providers that have been saying all along that this is really going to create terrible problems will increase and that we will be able to enter a meaningful dialogue with the agency to remedy this soon. They don't need Congress to act to put reasonable payments in place to address some of these problems.
This article originally appeared in the Respiratory Management April 2009 issue of HME Business.