The Government Accountability Office (GAO) has issued its report on home oxygen payments, “Medicare Home Oxygen: Refining Payment Methodology Has Potential to Lower Program and Beneficiary Spending,” which calls for stiff cuts to oxygen payment rates.
“Congress should consider reducing home oxygen payment rates,” the report states. “GAO recommends that CMS remove payment for portable oxygen refills from the payment for stationary equipment. The Department of Health and Human Services (HHS) commented that payments for home oxygen are ‘excessive’ but disagreed with the recommendation because HHS believed it would not yield immediate savings. GAO’s recommendation was not intended to generate savings but to help ensure beneficiary access to oxygen.”
The full report can be downloaded as a PDF at http://www.gao.gov/new.items/d1156.pdf.
Other findings from the report:
- An earlier draft of the GAO’s report included a recommendation to eliminate the oxygen rental cap, but this recommendation was excluded from the final report after CMS weighed in and said that the cap was not creating access to care issues.
- Fewer than 2 percent of beneficiaries relocate to a different service area in the months prior to the 36-month rental cap. However, the report notes that the analysis does not factor in the beneficiaries who temporarily relocate such as “snowbirds” who spend winters in Southern states.
- In 2009, the 1-800-MEDICARE telephone line received only 20 inquiries from beneficiaries who had trouble finding an HME provider, and CMS said that caseworkers were able to find new providers for the patients in a matter of days.
- The GAO disagreed with HHS’s recommendation to remove portable refills from the stationary payment rate, arguing that oxygen expenditures would not change as a result and bidding savings would likely be delayed.
- Medicare would have saved over $600 million annually if they had used the lowest private insurer payments rates.
- Medicare would have saved over $700 million annually if Medicare had used the VA program’s payment methodology.
The American Association called the report’s findings and methodology into question and said that it was formulating a rebuttal to be made to Congress.
“AAHomecare strongly disputes a number of flawed comparisons made in the report as well as the conclusion reached by GAO, and the Association will issue a rebuttal to the agency which we will share with Congress,” a statement from the association read. “The GAO based its recommendation on comparing Medicare payment rates for oxygen therapy to eight private insurers along with reimbursement rates gleaned from the Veterans Affairs Department (VA) and the flawed Medicare bidding program. Interestingly, of those eight private payors, only one insurer caps monthly oxygen payments.
“The study is disappointing and the Association will make sure that policymakers get the whole story with respect to oxygen therapy,” the association added.
