Oxygen conserving devices free patients from being tethered to heavy oxygen tanks, encouraging physical activities such as light exercise and walking. But while patients and physicians may prefer the devices for that reason, they are often prohibitively expensive, especially since Medicare and Medicaid do not cover them and private insurers will cover them only under very specific circumstances.

This has left some HME providers walking a narrow line between patient desires and the need to maintain a healthy bottom line. “We are in business to make money, but we also want to make patients happy,” says Doug Payne, a respiratory therapist and owner of Home Life Medical in Blairsville, Ga. “To stay in business, there has to be a happy medium.”

Payne and Tom Stamates, the respiratory director for Preferred Home Care in Lockport, NY, both deal with the reimbursement problem by providing oxygen conserving devices as part of a larger service package.

One of the main problems with oxygen conserving devices is that they have the same reimbursement as a regular continuous oxygen system, but they cost four or five times as much, Payne says. In Georgia, rental reimbursement is 80% of $37 from Medicare, and $26 “straight” from the state’s Medicaid on a monthly basis, he says. After Medicare pays its 80%, the company must get the rest of the money from the patient or the patient’s supplemental insurance. Private insurance does pay better than Medicare, but Payne has found that insurance company case managers usually call up and reduce his price.

Home Life Medical pays $500 to $600 each for oxygen conserving devices. “That’s a lot of money,” Payne says. “Especially when 40% of our patients are on them.”

In comparison, only 10% of Preferred Home Care’s patients use oxygen conserving devices, Stamates says.

Another problem is getting paid for the amount of oxygen used with oxygen concentrators. Most patients are on two liters per minute (2 LPM). However, reimbursement is the same for patients that need more oxygen as it is for the 2 LPM patient.

To avoid problems, Payne and Stamates are careful about who they qualify for an oxygen conserving device. “I look for individuals who have an oxygen saturation of 92% or better while using a conserving device,” Stamates says. “People with congestive heart failure or other heart problems qualify more easily than people with emphysema.”

Before an oxygen patient gets a conserving device from Home Life Medical, the patient’s oxygen level is first checked while he or she is sitting down. Then the patient must walk around and is rechecked after sitting back down. Next, the individual is put on an oxygen conserving device, and must do the same exercise. “It’s important to make sure the conserver is able to support their oxygen level,” Payne says. “We try to maintain about 90% of the oxygen level.”

Payne finds that the patients who qualify the best are those who want to get out of their home to go to the mall or to work. Others who favor the oxygen conserving devices include those who want to carry less weight.

To satisfy patients’ needs, Payne uses small tanks that weigh about 4 pounds with the oxygen conservers. He also deals with three different manufacturers, and his company uses both oxygen conserving devices that work off air pressure and devices that depend on batteries.

Once in a while, Payne has patients who have prescriptions for oxygen conserving devices for use during light exercise, most often walking. “Many physicians want their patients on oxygen conserving devices because they do not want them stuck in the house or lying in bed and not moving around,” Payne says. “The doctors believe this device encourages their patients to get mobile.”

Oxygen conserving devices may also be used in combination with standard cylinder systems to reduce the amount of oxygen that escapes as well as to extend the usable hours of a standard cylinder setup.

To Market or Not to Market
Being a provider of oxygen conserving devices offers Home Life Medical opportunities to develop other business as well. When Payne’s patients on oxygen conserving devices visit their physicians’ offices with the portable units, doctors learn his company provides the devices. That can result in referrals. When these patients are eating out, shopping, or going to physical rehabilitation, patients and caregivers who use continuous oxygen systems see the portable units and come to Home Life Medical to ask about them.

“It is almost like working backwards,” Payne says. “Oxygen patients may contact me and say they want an oxygen conserving device. But I will not accept them for a portable unit without getting the concentrator home business.”

Stamates is more cautious and stays clear of using oxygen conservers as a marketing tool, even indirectly. He avoids marketing oxygen conserving devices to case managers or physicians, while Payne does do one-on-ones with doctors.

“It is on a case by case basis,” Payne says. “That’s how we educate internal medicine physicians, family physicians, and pulmonary specialists on these devices. We also see case managers and social workers in the hospitals on a regular basis. We show them what we have in conserving units, and how these devices can provide a better quality of life.”

Taking care of your patients and your company’s bottom line given the current reimbursement structure can prove challenging. Still, even if the payment situation would change, Preferred Home Care plans to remain careful about who it accepts as a patient, Stamates says. “We are not going to give patients something that will not be beneficial to them.”

Vicki Gerson is a contributing writer for Dealer/Provider.