Fighting Back: The Industry Responds to Media Coverage of a Medicare Oxygen “Boon”

The HME industry, and the oxygen niche in particular, suffered a tough couple of weeks in the mainstream media, as The New York Times printed what was widely regarded by the industry as a derogatory, politically motivated article on Nov. 30. Then “NBC Nightly News” aired a two-part special report on Medicare fraud on Dec. 10 and 11.

The NBC report by correspondent Mark Potter mentioned various types of Medicare fraud, and focused on prescription drug and physician-instigated fraud the second evening. The bigger problem, from an HME industry point of view, was the Times article by Charles Duhigg. The article, titled “Oxygen Suppliers Fight to Keep a Medicare Boon,” seemed determined to discredit the necessity of services provided by suppliers to Medicare beneficiaries.

Times: An Industry Behaving Badly

The Times story, which was also picked up by hundreds of newspapers and wire services across the country, called attention to the price of oxygen equipment, rather than complete therapy and services provided by suppliers. The story quoted Rep. Pete Stark (D-Calif.) saying, “All you have to do is pick up an equipment catalog or search for ‘oxygen device’ on eBay to figure out better prices than what we’re currently paying.”

The article also accuses oxygen suppliers, manufacturers and member service organizations of high-dollar lobbying and of intentionally scaring patients so they will speak out against funding cuts. The story says providers “are offering extra services to justify high fees… A study released last year by the office of the United States Inspector General found that oxygen companies checked equipment for malfunctions much more frequently than manufacturers recommend and performed routine maintenance that patients could do on their own.”

The timing of the article also upset those in the industry.

“There’s an underlying question that I have concerning the motivation of this reporter to do a story at this time that was picked up by so many newspapers,” said Wayne E. Stanfield, president/CEO of NAIMES, an association of independent HME suppliers. Interviewed after the Nov. 30 story broke, Stanfield said, “Legislation is going to be introduced within the next couple of weeks, at the most, that will be voted on before the Christmas recess that will be affecting oxygen payments.” (At press time, Congress was still in session.)

As the Times story broke, Congress was looking at additional cuts for oxygen therapy reimbursement, said Michael Reinemer, VP of communications and policy at the American Association for Homecare (AAHomecare).

“It paints a very misleading picture about oxygen reimbursement, in particular, which has been reduced so sharply in recent years,” Reinemer said. “There are more cuts to come, and the idea that Medicare grossly overpays for oxygen is completely false.”

There is no doubt in John Gallagher’s mind that the article was hack journalism. Gallagher, who is the VP of government relations of The VGM Group, said the article didn’t come out when it did by chance.

“Anytime something is up on the Hill ready for vote, there is an OIG (Office of the Inspector General) report on fraud or there’s an article such as this put out. The fact that NBC (did) a two-piece series, once again, that (wasn’t) just happenstance. That was planted with the intent of putting out adverse information on our industry so our members can say, ‘Hey, we’ve got to tackle that.’ If we spin our wheels trying to beat back the press, then we lose.”

HME Industry: Claims Are Unjust

A major concern that those in the industry have with the Times article is that the reporter didn’t thoroughly understand the topic.

“There are glaring inaccuracies in the article,” Stanfield said. “The article is completely misrepresenting the facts surrounding providing home oxygen.”
Industry proponents were angered by the story’s implications that consumers can buy oxygen equipment from any place (doing so is actually illegal) and that providers overcompensate in services to cover up for unjust pricing.

“Supposedly, the (reporter) spent four months researching the story, but he really doesn’t even begin to understand what providing home oxygen therapy is all about,” said Cara Bachenheimer, senior VP for government relations at Invacare Corp. “It’s a prescription drug via prescription device.”

Though some legislators assume that providers do nothing but supply the equipment, the oxygen industry argues there are a lot of services that have to be provided, including delivery, patient compliance and regulatory maintenance and billing expenses, Reinemer said.

Providing additional services to justify higher fees is another moot claim because providers aren’t paid any more for visiting a patient every day, industry insiders added.
“Why would I do more than would be required as a provider, when the cost is borne by me and not someone else?” Stanfield asked. “Providers are going to service and maintain the equipment in accordance with policy and accreditation guidelines. It’s one thing if we could manipulate the reimbursement by doing this, but the truth is it’s a flat, fixed reimbursement.”

The way the story was written made some suppliers wonder if the Times reporter had his own agenda from the conception of the story. Members of the oxygen industry worked with the reporter, Reinemer said, but unfortunately he seemed to ignore the vast majority of the information the industry supplied.

 “The facts were cherry-picked, and the conclusion of the entire piece was very misleading and wrongly portrayed the oxygen providers in a very shallow and negative light,” Reinemer said. “For instance, (the reporter wrote) that we use patients and scare patients. What we’re actually doing is trying to keep the patients informed, because they weren’t hearing about radical changes in the oxygen policy. Medicare wasn’t explaining what was going on, and neither was Congress.”

Bachenheimer agreed that the reporter reached a conclusion before the start of the article. She said the reporter spoke to at least 100 people in the industry, but didn’t seem to absorb any of the information.

 “He had an objective and mission before he even talked to anybody,” Bachenheimer said. “We talked to him, and lots of other people talked to him. He ignored 99.9 percent of the truth.”

Reinemer would have liked the story to mention that studies have shown that long-time oxygen therapy helps to keep oxygen patients out of the hospital and prevents emergency room visits, which saves money for Medicare. Home oxygen treatment costs Medicare an average of about $7.60 a day per patient.

“That’s a lot cheaper than spending the same day in (the) ER or the hospital — that was a huge omission, and also the omission of facts on how the costs were distributed in the terms of services and equipment,” he said.

One of the few positive comments made in the article was that home care saves Medicare billions of dollars — a thought that’s not only shared by the industry, but by some of Congress.

Getting the Truth Out

Industry executives are encouraging providers to fight back.

“We’ve got to do a better job of getting out the positive message of all the good things we do for patients, and that story is not out there and it needs to be,” Bachenheimer said.

NAIMES has suggested that suppliers e-mail, call or write the reporter who wrote the story. If their local newspapers have picked up the story, NAIMES encourages suppliers to respond to it. Reinemer is encouraging providers to log on to AAHomecare’s Web site (, go to the newsroom portion and read his response to the article. He’d also like providers to establish relationships with the local media and become a source of accurate information for future stories.

“The interesting stories are with the families and the people that these home-care providers serve,” he said.

Bachenheimer agreed: “People need to be more active generally in sending out press releases when they do things in the community. And there’s a huge positive side to what we do in this industry.”

The Importance of Education

Instead of writing letters, Gallagher said he’d rather those in the industry pick up the phone and talk to their members of Congress, who he says can make the most impact.

 “The article, from what we’re hearing from several members of Congress, was obviously a hack job toward the industry to get us to take our eye off the ball,” he said. “Our focus is the doc fix (i.e, the Medicare Sustainable Growth Rate, which involves amending physicians’ reimbursement rates, possibly at the expense of HME reimbursement rates) and Medicare reform fix. What we need to do is make sure beneficiaries are being educated on what is the potential, under a doc fix, to harm them to pay for the docs. We’re not advocating don’t find savings for the docs, but what we are saying is don’t continually come back to DME for your fix.”

Gallagher doesn’t want the industry to get caught up in trying to fight the press. “You can’t beat the press,” he said. “What we’ve got to do is educate members of Congress that the information is wrong. It’s more important — and the impact is going to be greater — to make sure people are taking the time to contact their Congressmen, contact their senators and really get their beneficiaries involved to say ‘Hey, no additional cuts on oxygen and no additional cuts on power mobility.’”

“There are a lot of open-minded and very professional people at CMS and at Congress,” Reinemer said. “We just need to continue to work with them.”

This article originally appeared in the January 2008 issue of HME Business.

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