Business Unusual

While the Administration's proposed FY 2009 budget package on Medicare and oxygen payment were appropriately dismissed on Capitol Hill, that is not an indication that Congress will leave the home oxygen benefit alone this year, or next.

2008 is the second year of a two-year session of Congress. Last year's House Medicare bill was passed in August as part of the Children's Health and Medicare Protection Act, or CHAMP, bill. So the ball is now in the Senate's court to put together its Medicare package. Again, the desire to stave off a physician payment cut, now scheduled to take effect July 1, 2008, is the key driver behind Congress' desire to pass some kind of Medicare package this year.

Later this spring, the Senate Finance Committee will likely go through the normal process of “marking up” a Medicare bill at the committee level. This is when committee Chairman Max Baucus will publicly announce the Medicare package he wishes to move through the Senate.

The committee mark-up provides both Democratic and Republican committee members a chance to modify that package and report it out of committee before consideration on the full Senate floor later.

The situation this year presents a series of entirely new dynamics. First, we have a good understanding of the details of the oxygen provision that the Senate Finance Committee will likely include in its package, or “chairman's mark.” Second, and most important, we have CMS' implementation of the competitive bidding program.

The Senate Finance Committee spent considerable time in the fall developing a package internally to address its issues with the current payment system for home oxygen therapy. The issues are the same as those highlighted in the HHS Office of Inspector General's September 2006 report, which examined the acquisition cost of home oxygen concentrators.

The sound bite that has resonated on Capitol Hill — and that continues today — is that the Medicare program pays $200 for 36 months and how that total amount compares to the simple acquisition cost of a concentrator.

We are intimately familiar with the fundamental flaw of relying only on concentrator acquisition cost as a way to measure the appropriateness of the current level of Medicare payment. At the same time, some on Capitol Hill have begun to understand how payment for stationary equipment subsidizes the costs of providing ambulatory equipment and services.