If you are going to use the August Congressional recess to address Medicare oxygen changes in DRA and other proposals for 2007—here is what you need to know.

The Deficit Reduction Act (DRA), passed by Congress earlier this year, will force Medicare oxygen users to assume ownership of and responsibility for their oxygen equipment after 36 months of rental. Like the home health reimbursement freeze, this provision (Section 5101) was included in neither the House nor the Senate version of the DRA, but was inserted by a small group of negotiators in the dead of night before the final vote. As a result, there was no opportunity for Congress to review the language or consider the consequences to beneficiaries who would be affected. The DRA provision, combined with competitive bidding—which may encompass oxygen equipment—could well jeopardize the Medicare home oxygen benefit.  

The home care provisions were intended to help pay for a 1-year fix of the physician sustainable growth rate (SGR), an approximate 5% reduction in reimbursement rates scheduled for last January 1. Congress will be addressing the SGR dilemma again this year. The home health reimbursement update is back on the table, and the Bush Administration is proposing to reduce the home oxygen rental period further, to 13 months, as part of its Fiscal Year 2007 budget blueprint.  

Under the DRA, after a 36-month rental period, all home stationary and portable oxygen equipment will be considered “purchased” and title to the equipment, along with responsibility for maintenance, service, and repair, will be transferred to Medicare beneficiaries. This provision virtually eliminates the home oxygen benefit after a 36-month period, even when the patient’s medical need continues.

With transfer of ownership of the medical device, control over dosage levels shifts to the patient, increasing the risk of self-medication to the patient’s detriment. The DRA will produce the undesired effect of unmonitored and unregulated dispensing and distribution of a prescription drug. Because of the risk of improper use of oxygen, AAHomecare, the American Lung Asso-ciation, and other organizations oppose this Medi-care policy change.  

Medicare beneficiaries can and do regularly purchase many home medical devices for personal use, including oxygen technologies; however, more often, they choose to rent because renting allows for a continuing patient-provider relationship and professional maintenance of complex equipment. While there is broad language in the DRA regarding continued payment for the oxygen itself, and “maintenance and service” of equipment after title transfer, there are no specifics or assurances addressing mechanisms for ongoing maintenance and service of the equipment, refilling of portable systems, repair or replacement of broken equipment, 24-hour emergency service, or replacement supplies.

These routine services now performed by home oxygen providers as part of the monthly rental fee will no longer occur automatically. In the Medicare program today, there are no codes for reimbursement of these or other functions, including patient and caregiver training, deliveries, disposable accessories, and clinical professional support.

Two physicians currently serving in the US House of Representatives immediately grasped the danger for patients and took action. Reps Joe Schwarz (R-Mich) and Tom Price (R-Ga) introduced the Home Oxygen Patient Protection Act (HR 5513) to repeal the DRA provision.  As of this writing, the bill has 34 cosponsors and AAHomecare is working to secure introduction of a companion bill in the Senate.

Repeal makes sense for several reasons. First, Section 5101 was not scored as producing any Medicare savings.  Second, it adds unnecessary medical risks for patients and the result may be greater frequency of emergency hospitalization—and higher costs.

Beneficiary responsibility for oxygen equipment could, in fact, end up costing the Medicare Program. In 2002, there were 673,000 hospitalizations for COPD, with an average length of stay of 5.2 days. The average Medicare cost for 1 day in the hospital is $4,603. By contrast, the current average annual cost for home oxygen therapy is $2,784, or $7.62 per day, far less than the cost of a single day in the hospital. Home oxygen therapy is clearly the most cost-effective and clinically effective treatment for those with COPD and low blood oxygen.

Many members of Congress have no concept of what the home oxygen benefit encompasses. Some believe the monthly payment is for the equipment only. In fact, there are many routine services that are currently provided as part of the monthly rental payment (for a full list, go to www.hhcdealer.com for the complete and unedited version of this article).  

AAHomecare commissioned a study by Morrison Informatics that demonstrates that home oxygen equipment comprises only 28% of the monthly costs associated with the oxygen benefit, with the other functions discussed above accounting for most of the other 72%.  These findings are based on responses from 74 home oxygen providers serving 600,000 Medicare patients.

Home oxygen providers should continue to communicate with members of Congress in the coming weeks, take advantage of the August recess to meet with them in person, and accompany members on site visits to patients’ homes so they can meet the faces behind the statistics.

Ann Howard is director of federal policy for AAHomecare, Alexandria, Va. She can be reached via e-mail: ahoward@aahomecare.org.