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August 7, 2006

2006

August 7, 2006

Headline

CMS Proposes Revisions to Oxygen Reimbursement

 

Last week, the Centers for Medicare and Medicaid Services (CMS – which administers the Medicare program) issued a proposed rule that will make significant changes to how Medicare reimburses for oxygen provided in the home.  The proposed rule provides regulatory guidance on the implementation of the recently passed Deficit Reduction Act (DRA).

 

Under current policy, CMS pays for oxygen on a rental basis, paying about $200/month for oxygen plus an additional $32/month for patients using portable systems.  These payments are made as long as the Medicare beneficiary needs oxygen.

 

The Deficit Reduction Act changed Medicare reimbursements for oxygen from an open-ended rental item to a capped rental item.  After 36 months, rental payment for the oxygen equipment stops.  The DRA further mandated that after 36 months, the ownership of the oxygen equipment would transfer to the Medicare beneficiary.  The DRA did allow for payments beyond the 36 month to refill oxygen and for maintenance and repair.

 

CMS’s proposed rule implements the provisions of the DRA.  As required by the law, the proposed rule implements the 36 month capped rental and title transfer provision as defined in the DRA.  The rule further clarifies that all equipment transfers to the beneficiary, including tubing, masks, cylinders and replacement cylinders.  This provisions impact on oxygen cylinders may problematic for oxygen providers.

Equipment Category

Equipment Rental/Refills

Months 1-36

Refills Only

Months 37-60

Total 36 month payments

Total 60 month payments

A - Concentrator

& gas/liquid portable

$209

($177 + $32)

$55

$7524

$8844

($7524 + $1320)

B - Concentrator and/or

oxygen generating portable

$241

($177 + $64)

$0

$8676

$8676

C - Gas or liquid stationary

& gas or liquid portable

$209

($177 + $32)

$156

($101 + $55)

$7524

$11,268

($7524 + $3744)

D –Gas or liquid stationary

& oxygen generating portable

$241

($177 + $64)

$101

$8676

$11,100

($8676 + $2424)

E - Concentrator only

$177

$0

$4248

$4248

F - Gas or Liquid

stationary only

$177

$101

$4248

$6672

($4248 + $2424)

Current payment system 

(Stationary & Portable)

$232

$232

$8352

$13,920

Current payment system

(Stationary only)

$200

$200

$7200

$12000

 

The big surprise in the proposed rule is that CMS proposed to change from a modality neutral to a modality specific oxygen payment system.  These changes were not part of the DRA.  CMS has proposed to change its reimbursement policy from a $200/month payment (+$32/ month for portable systems) to a 6-tier system.  Below is a chart that lists the 6 new categories of equipment and the monthly rental reimbursement – for the first 36 months and any continuing reimbursement for refills beyond the 36th month.

 

The equipment categories and payment rates would be effective January 1, 2007.

 

The proposed rule also covers key issues including the useful life of oxygen equipment, provider assignment, requirements for providers to continue service to beneficiaries, warranty requires, reimbursement for service and repair, and equipment replacement provisions.

 

The ATS Washington Office and the ATS Clinical Practice Committee are in the process of analyzing the proposed regulation and its impact on home oxygen patients.  The ATS will submit comments on the proposed rule.

Tuberculosis

ATS President John Heffner, M.D. sent a letter to the House of Representatives urging members to cosponsor the Comprehensive Tuberculosis Elimination Act (H.R. 5836) introduced by Rep. Sherrod Brown (D-OH) and Heather Wilson (R-NM). 

 

The Comprehensive TB Elimination Act will:

 

·        Authorize increased funds for TB training, treatment and education programs at CDC

·        Authorize and expand CDC sponsored demonstration activities on TB elimination

·        Expand research and research training programs at the National Institutes of Health

·        Authorize funding for the “Blueprint Plan for TB Vaccine Development“

·        Expand existing TB training programs at the NIHFogartyInternationalCenter

·        Create loan repayment opportunities for physicians/researchers enrolled in NIH TB training programs

 

In his letter to Congress, Dr. Heffner notes the ATS’s historical commitment to TB control and elimination and strongly urges members of Congress to cosponsor this important public health legislation.

Physician Practice

Last week, the House passed the Health Information Technology Promotion Act (HIT).  This legislation seeks to accelerate the adoption of health information technology in the market place by addressing financial regulatory barriers to implementation.  Specifically the legislation:

 


  • Creates a Stark self referral “exceptions/safe harbors” for the provision of HIT and training services. The exceptions/safe harbors applies to hospitals, group practices, prescription drug plan sponsors, Medicare advantage organizations, or any other such entity specified by the Secretary.

  • Calls for a study in health information technology adoption and its impact on health quality

  • Provides a parallel exception for health providers working in consortia to adopt health information technology.

  • Requires the adoption of ICD-10-CM coding system by 2010.  The coding system would replace the current International Classification of Disease 9th Revision (ICD-9) currently being used. 
  • Provides funds for health information technology adoption.

 

The legislation is similar to legislation passed by the Senate earlier this Congress.  The Senate legislation provides considerably more funds for health information technology adoption, but was silent on the Stark exemption.  A conference committee will now be convened with members of each chamber to resolve the differences in the two legislative proposals.

 

Points of Contact

Gary Ewart Senior Director, Government Relations
Nuala Moore Senior Legislative Representative
Joe Kirby DC Office Administrator