Rural Relief from unsustainable Home Oxygen Therapy Rates

Join home oxygen therapy rural relief efforts by visiting the Action Center to send a message to elected officials requesting co-sponsorship of HR 4229, Protecting HOME Access Act. 

• Issue Brief: Rural O2 Access
• Congressional Directory

Background

In addition to the drastic rate reductions for home oxygen therapy under the Competitive Bidding program, suppliers of this life sustaining, legend drug in rural and non-bid areas are facing additional financial hardships due to the Centers for Medicare and Medicaid Services (CMS) inappropriately reducing payments.  Beginning in January 2017, CMS applied two regulations to calculate the Medicare fee schedule for stationery oxygen concentrators (E1390).  In essence, this cut reimbursement twice, which resulted in rural rates that are 11-14% lower on average than their urban Competitive Bidding Area counterparts.  

In 1997, Congress included in the Balanced Budget Act a provision that authorized the Centers for Medicare and Medicaid Services (CMS) to pay for oxygen based on “classes” as long as the result was budget neutral.  In 2006, CMS used this authority to establish a new class of oxygen for new portable oxygen technology and called it oxygen generating portable equipment (OGPE).  To comply with the budget neutrality mandate, CMS decreased the payment amount for stationary oxygen equipment.  The CMS regulation that established the offset for oxygen concentrators was applied to the unadjusted fee schedules under the fee schedule methodology mandated by Congress under § 1834 (a) of the Social Security Act (SSA).  

When Competitive Bidding was expanded nationwide to include rural and non-bid areas in 2016, the 2017 fee schedules for concentrators in rural areas was based on information from the Competitive Bidding program under the methodology in SEC. 1847. [42 U.S.C. 1395w–3] of the Social Security Act.  However, CMS also applied a budget neutrality “offset” to the 2017 rural fee schedules for stationary oxygen equipment. 

The result is that starting in 2017, payment rates for oxygen concentrators in rural areas are now well below the regional competitive bidding rates from which they were derived.  CMS applied an outdated regulation that was never intended to apply to rates derived from Competitive Bidding rates, which has resulted in unsustainable oxygen reimbursement rates in rural areas.  While there are a number of legal opinions to the contrary of CMS’ position, it appears that Congress needs to act quickly and pass legislation to protect Medicare oxygen patients.
 

Relief Efforts

In December 2016, the American Association for Homecare submitted a letter to the Office of General Counsel regarding the incorrect application of the budget neutrality offset to the 2017 rural fee schedules for stationary oxygen equipment (E1390) and outlined main issues.  The Association requested that CMS recalculate the rates consistent with the requirements of § 414.210 (g).

The Association has also engaged HHS, CMS, and The Hill repeatedly on this issue and for relief either through regulatory avenues or statutory channels if needed.  154 Members of the House sent a joint letter to HHS and CMS leadership in June 2017 expressing “deep concerns” and the use of their regulatory authority to provide critically needed relief. 

In November 2017, Representatives Cathy McMorris Rodgers (R—WA) and Dave Loebsack (D—IA) introduced HR 4229 “Protecting HOME Access Act” to update the budget neutrality provision for oxygen which was enacted prior to the Competitive Bidding program and clarify that the budget neutrality provision shall not apply to items and services in which there is a competitive acquisition program or with respect to which payment is adjusted.

For information getting involved in relief efforts, visit the AAHomecare Action Center.

Resources

• HR 4229 Issue Brief for O2
• AAH Letter to OIG 2016
• Detailed Issue Paper of Rural O2 Fee Schedule 2017
• Comparison of Rural vs CBA Rates for E1390 2017
• House Letter to HHS & CMS for Regulatory Relief 2017

AAHomecare members can find more information and get involved in shaping policy for this issue through the Home Medical Equipment/Respiratory Therapy Council.

Sleep Policy

AAHomecare is concerned with the CMS policy on non-consumable supplies as it applies to CPAP. AAHomecare submitted comments to CMS on the DME MAC bulletin on non-consumable supplies that requires providers to confirm the need for more supplies and refill no sooner than 14 calendars days before the shipping date, confirm the beneficiary request for a refill, and hold off on shipping until 10 calendar days before the beneficiary’s current supply runs out.

AAHomecare members can find more information and get involved in shaping policy for this issue through the Home Medical Equipment/Respiratory Therapy Council. For in-depth commentary on pending legislation and regulations, go to Analysis and Comments, Testimony & Official Statements.

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