A new proposal for reforming Medicare’s oxygen benefit aims to change O2 providers’ status from suppliers to providers. Developed by AAHomecare, the Council for Quality Respiratory Care and other stakeholders, the reform would have Medicare recognize that oxygen is a service that requires ongoing funding, and thusly eliminate the 36-month rental cap.

AAHomecare has shaped the plan to be “budget neutral” so that the net total of Medicare funding for oxygen neither increases nor decreases. For providers, this means their payments could go up or down, depending on their mix of patients, while the overall cost to the fed would remain the same. The association says the resulting program is “vastly preferable” to continued reimbursement cuts year after year, which it says will “decimate the nation’s infrastructure of home oxygen providers.”

 “Only fundamental reform of the oxygen benefit in Medicare will give homecare providers real relief from the seemingly endless cycle of payment cuts and preserve the level of services that oxygen patients deserve and require,” added AAHomecare president Tyler Wilson.

The program would:

•    Change status of oxygen entities from “suppliers” to “providers” in recognition of the services provided.
•    Exempt oxygen from Medicare competitive bidding program.
•    Repeal the 36-month oxygen cap.
•    Reimburse providers for required patient services, as well as for equipment and for necessary supplies in a bundled payment.
•    Measure and reward quality of care per guidance of a Home Oxygen Therapy Advisory Committee.

In terms of patient services required under reformed oxygen benefit, Medicare would identify and recognize services that home oxygen providers currently furnish, but which are not currently recognized under the oxygen benefit:  

•    Patient evaluation and care planning.
•    Beneficiary/caregiver education.
•    24-hour on-call service coverage.
•    Patient education and assistance when necessary for infection control.
•    Appropriate home oxygen equipment and regular delivery of oxygen content.
•    Concentration level and flow rate checks, filter changing and cleaning, assurance of the integrity of alarms and back-up oxygen systems.
•    Visits by trained personnel to evaluate all aspects of the service.
•    Document exception reporting when changes occur in patient compliance.
•    Equipment serving.
•    Reinforcement of appropriate equipment maintenance practices and performance.

In turn providers would have to employ appropriately trained clinical personnel according to state requirements; provide covered services under direction of licensed clinical professionals pursuant to physicians’ orders; and obtain accreditation from an accrediting body that has been in business at least three years. The would also have to comply with Medicare supplier enrollment regulations.

The reformed benefit would also feature case-mix adjusted reimbursement rates. Rates would be annually updated and adjusted for outlier payments and geographic wage indexes. The would be subject to periodic rebasing and a transition period, and adjusted based on factors such as ambulation level, liter flow, modality (liquid or OGPE), and mental acuity.

Also, home oxygen providers would facilitate retesting for certain Medicare beneficiaries who are prescribed oxygen after hospital discharge. Retesting would not apply to patients with certain chronic conditions such as COPD, emphysema, obstructive chronic bronchitis, brochiectasis, pulmonary fibrosis, and Alpha-1 antitrypsin deficiency. The data collected from the tests would go directly to a physician or independent diagnostic testing facility.

To make the reform package reality, AAHomecare and other stakeholders will seek to enact legislation that incorporates these reforms. The American Association for Homecare fly-in on Feb. 11, which it is calling Homecare on Capitol Hill Day. The fly-in will deliver to members of Congress the specifics of the oxygen reform plan.

Also, with a healthcare-reform minded Obama administration now in place, the reform package and the concerns of the homecare sector will be heard by a “fresh set of ears,” but because the Obama administration will have so many other high-priority issues, it is difficult to gauge how it will respond, says said Michael Reinemer, Vice President, Communications and Policy for AAHomecare. That said, the committee leadership and staff in Congress remains largely the same, as does much of the career CMS staff.

“But we will have an entirely new White House that will take a fresh look at the whole issue of how we need to create a cost-effective healthcare system, and homecare and HME ought to be a part of that,” he added.