HME suppliers that provide portable oxygen to Medicare beneficiaries must comply with the oxygen medical policy published in the Durable Medical Equipment Regional Carrier (DMERC) Supplier Manual. Medical equipment suppliers that engage in the transfilling of portable oxygen tanks must also comply with good manufacturing practice requirements established by the US Food and Drug Administration (FDA).

Medicare will pay for a portable oxygen system only if the patient is mobile within the home and the qualifying blood-gas study was performed while the patient was at rest or during exercise. Any oxygen patient whose only qualifying test was performed during sleep, such as an overnight oximetry or sleep study, will not be eligible for coverage of portable oxygen. Additionally, some suppliers may not realize that for a test conducted during exercise to be valid, the patient must be tested: (1) at rest breathing room air; (2) during exercise breathing room air to demonstrate desaturation; and (3) during exercise while on oxygen to demonstrate that oxygen improves the hypoxemia that the patient experienced when exercising breathing room air.

Although only the test result taken during exercise on room air is recorded on the Certificate of Medical Necessity (CMN), all three test results must be available to the DMERC upon request. In the fall of 2003, CIGNA Medicare, the Region D DMERC, reported that the number one error in a postpayment probe review of oxygen claims (for patients whose qualifying test result was during exercise) was failure to perform or record test results while the patient was exercising on oxygen.

If coverage criteria are met, Medicare will usually pay for a portable oxygen system in addition to a stationary oxygen system. However, if the patient qualifies for an oxygen flow rate of greater than 4 L/min, Medicare will not pay for the portable oxygen system in addition to the higher allowance for the stationary system. Additionally, Medicare only pays for equipment that is medically necessary. If the supplier has evidence that a Medicare beneficiary is never using the portable oxygen system, it should not continue to provide and bill for the portable oxygen system.

If a portable oxygen system is covered by Medicare, the supplier must provide whatever quantity of oxygen the patient uses. Reimbursement is the same, regardless of the amount of oxygen dispensed. The supplier is prohibited from charging the Medicare beneficiary for what it considers excessive use of portable oxygen.

If the portable oxygen system is ordered some time after a stationary system has been provided to a Medicare beneficiary, the supplier should have the physician complete a revised CMN. In this situation, there is no requirement for a new blood-gas study unless the initial qualifying test was performed during sleep. In such case, a test qualifying the patient for portable oxygen (taken either at rest or during exercise) must be performed within 30 days prior to the date of the Revised CMN. The schedule for obtaining a Recertification CMN will be based solely on the Initial CMN date—the supplier will not have to obtain a separate recertification for the portable system.

FDA Regulations for Transfilling Operations
Medical gases (such as oxygen) are considered prescription drugs and are therefore regulated by the FDA. The FDA has current good manufacturing practice regulations (CGMPs) that govern the manufacturing, filling, and transfilling of medical gases. A medical equipment supplier that engages in filling cylinders or containers with oxygen (liquid or gas) is required to register annually with the FDA and comply with the CGMPs.

The general CGMP regulations are contained in Title 21, Code of Federal Regulations, Parts 210 and 211. However, because these CGMPs are general in nature and are not specific to medical gases, the FDA first issued a guideline on compressed medical gases in June 1981, which was revised in 1983. In February 1989, the FDA issued another revision of the guideline to address the evolving home care arena, including the delivery of oxygen to patients at home. The FDA is currently reviewing the guideline, but in May 2003, it published “Draft Guidance for Industry on the Current Good Manufacturing Practice for Medical Gases.” This Draft Guidance reflects the FDA’s current thinking, but is currently not binding and has been published for the purpose of obtaining comments. Both of these documents can be found on the FDA’s Web site at www.fda.gov/ cder/dmpq/gases.htm. Because the Draft Guidance is not currently enforceable, the requirements in the 1989 Guideline are valid.

Quality Control Units
The company is required to establish a Quality Control Unit (QCU) with the responsibility and authority to approve or reject all containers, closures, in-process materials, labeling, and written procedures, and to review production records to assure completeness and accuracy—and ultimately approve or reject all containers of medical gas. The responsibilities and procedures applicable to the QCU must be in writing and complied with. A small company may designate a single person as the QCU.

The company must establish written procedures that detail the training of personnel involved in filling, transfilling, processing, handling, holding, or delivering of medical gases. Any employees engaged in these activities must be properly trained (using CGMP requirements). All training must be conducted by qualified individuals, with enough frequency to ensure compliance.

According to the FDA, the lack of CGMP training is one of the most overlooked areas observed at most companies dealing with medical gases. Be sure to document any and all training.

Equipment Calibration
Establish written procedures addressing the calibration for all equipment used in filling or transfilling operations. The procedures may reference the manufacturer’s instruction manual for the recommended calibration schedule, so long as the manual is available and is followed. Vacuum gauges are required to undergo two calibrations. The first calibration is performed on a daily basis with no vacuum present to assure that the needle on the gauge returns to zero. This daily check should be recorded on the batch production record or in a separate log. The second calibration requires that the vacuum gauge be calibrated to standards established by the National Institute of Standards and Technology, and should be performed in accordance with the manufacturer’s recommendation. Thermometers are also required to be calibrated, with the thermometer calibration documented in a separate log.

Prefill Inspection of High-Pressure Cylinders
The company is required to perform (and document on the batch production record) the following procedures on each and every cylinder, except as specified:

1) The hydrostatic testing date should be checked to ensure that the cylinder is not due for additional testing.

2) Look for dents, arc burns, dings, oil, grease, and other signs of external damage or contamination that might cause a cylinder to be unacceptable or unsafe.

3) Vent or blow down the cylinder to atmospheric pressure if any gas is present, or invert and drain if it contains a liquid product.

4) Perform a sniff test to detect a foreign gas or other odor.

5) Perform a hammer or dead-ring test on steel cylinders with a 10-year hydrostatic retest date. The test is performed by tapping the cylinder sidewall with a ball-peen hammer. A good cylinder will make a clear bell-like ring. A dull ring indicates possible internal corrosion. Cylinders with a dull ring should be quarantined and marked as unacceptable.

6) Examine the valve assembly for signs of damage; the presence of debris, oil, or grease; and for the correct CGA valve unique for oxygen.

7) Make sure the color code is correct (green for oxygen).

8) Remove obsolete labels or labels containing old lot numbers. You cannot apply a new label on top of an old one.

9) Vacuum evacuation of any residual gas in the cylinder by pulling a vacuum of at least 25 inches of mercury at sea level.

Any cylinder that fails any prefill procedure must be quarantined to prevent filling of such cylinders.

Batch Production Records
Batch production records must document all significant steps during the filling operation, such as prefill inspections, the number and size of cylinders filled, the filling inspections, postfill checks, lot number assigned, final temperature and pressure results, and the signature of the person who checked the entries for accuracy and completeness. Each step should be documented as it is completed. It is not acceptable to use a single mark to indicate that all significant steps have been performed. It is also improper to use a check mark where an actual value is required—such as temperature/pressure readings.

Before a batch of filled cylinders is released for distribution, the QCU must review and approve the batch production and control records (including those for packaging and labeling) to determine that the batch was prepared in compliance with written procedures.

Lisa K. Smith, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, Amarillo, Tex. She is Board Certified in Health Law by the Texas Board of Legal Specialization. Smith represents DME companies, pharmacies, and other health care providers throughout the United States and Puerto Rico. She can be reached via email: lsmith@bf-law.com.