The proper qualification of oxygen patients should be the most important concern for any DME oxygen supplier. Get it right and all appropriate charges for the supply of oxygen and related services are paid in accordance with the Medicare fee schedule. Get it wrong and all charges for oxygen and related services that are provided pursuant to an improper test are disqualified. A flawed procedure that is responsible for improper qualification testing can result in the repayment of several thousand dollars for each oxygen patient.

Medicare considers qualifying oxygen patients to be the responsibility of the prescribing physician. This means that DME suppliers depend on the physician prescribing the oxygen to qualify patients. This policy presents an enormous challenge for the DME oxygen supplier since physicians are well known for not wanting to be bothered with coordinating oxygen qualification tests, nor are they penalized for an improper qualification.

The language of the DMERC Supplier Manuals makes it clear that it is against CMS and DMERC policies for a DME company to qualify patients for oxygen. The reason for this policy is to eliminate potential conflict of interest and possible abuse. Oxygen qualification tests must be performed by physicians or other providers who will not benefit financially from a finding of coverage for home oxygen services.

Denise Fletcher, JD

The preferred sources of oxygen testing evidence are existing physicians, hospitals, or laboratory records that reflect the patient’s oxygen test results. If patients have been recently hospitalized, preferred sources of qualification are tests performed on the patients while in the hospital. Such tests must be performed within 2 days of discharge and with patients in a chronic stable state. Test results obtained in the emergency department during a period of acute illness or when a patient’s underlying disease is exacerbated will not be acceptable.

For the DME supplier, the safest course of action is to work with physicians to have the patient’s physician qualify the patient for oxygen. This means educating physicians on the oxygen certification and recertification requirements and helping them understand the importance of obtaining a valid qualification test. Ideally, when a physician orders oxygen, he or she will perform a pulse oximetry test in the office and document the results in the patient’s medical records.

A provider should request a copy of the progress notes where the oximetry test is documented or a copy of the oximetry test strip from the prescribing physician. Testing does not always take place in the physician’s office for a number of reasons. Many physicians are not aware of Medicare’s requirements for qualifying oxygen patients, or the physician may not have the necessary pulse oximetry equipment in his office.

Sometimes, even with the proper education, physicians will not take the steps necessary for an initial qualification or a recertification. In such cases, DME suppliers are placed in a difficult situation. The DME supplier is left with no choice but to contact the local hospital or independent diagnostic testing facility (IDTF) to arrange for a qualifying oximetry test. The testing entity would then have to contact the physician and obtain an order for an oximetry test. If a DME supplier arranges for a qualifying test in this way, there is a slight risk that the DMERC may determine that the test is not valid because the supplier arranged for  the test.

To lessen any risk associated with arranging for a qualifying test, a DME provider should not send the patient to any entity/person with whom he has any sort of financial relationship. In particular, a DME supplier cannot pay for pulse oximetry tests, nor should there be common ownership between the DME supplier and the testing entity.

DME providers should first try to work with physicians to obtain a qualification test, carefully documenting efforts with the physician. Directly contacting an IDTF or hospital on behalf of a beneficiary for a qualifying test should be undertaken only after efforts to have the physician make the arrangements have failed.

Another possible testing scenario involves a physician sending the patient home with an oximeter overnight. Generally, in these types of arrangements, the physician will instruct the patient on how to use the oximeter during an office visit. The patient then takes the equipment home and uses it. The next day, the patient returns the equipment to the physician’s office where the physician has the data downloaded.

The DMERCs have issued guidance that indicates they will allow this method of qualifying certain oxygen patients if done under strict guidelines. These guidelines include allowing a supplier to pick up and deliver the equipment on behalf of the physician. The supplier may act only as a delivery agent and cannot otherwise be involved in the test.

Growing Concern
A growing problem facing respiratory DME providers is finding a provider to conduct qualifying overnight oxygen tests on the DME company’s oxygen patients. A solution is for the DME company to arrange for its patients to receive overnight oximetry testing conducted by an IDTF.

To facilitate overnight testing, the DME company can pick up the sealed, tamper-proof oximeter from the IDTF and deliver it to the patient’s home—and in the morning pick the unit up from the patient and transmit the test results via the Internet or other software to the IDTF facility. The validity of overnight oximetry tests conducted in this manner has been approved by CMS in Transmittal 173 dated August 16, 2005.

Transmittal 173 is welcome news for DME suppliers. It provides clear guidance on a workable testing arrangement. Many suppliers have asked whether tests performed in this manner can be used to qualify patients at rest or during exercise. Unfortunately, the transmittal is limited to overnight oximetry tests.

Pursuant to CMS guidance, it is clear that DME suppliers may not qualify their own patients nor may suppliers pay another party to perform tests even if that party is paid a set fee regardless of results. While this guidance seems pretty clear, suppliers often get into serious trouble when trying to obtain a qualifying test for oxygen patients.

In the final analysis, oximetry testing should be taken seriously and questionable arrangements should be avoided. A disqualified test/methodology can be a financial disaster for DME suppliers. Any questions about proper oximetry testing should be addressed with a qualified health care attorney or consultant.

Denise M. Fletcher, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, an Amarillo, Tex-based law firm. She is Board Certified in Health Law by the Texas Board of Legal Specialization. Fletcher represents DME companies, pharmacies, and other health care providers throughout the United States and Puerto Rico. She can be reached via e-mail: dfletcher@bf-law.com.