CMS to Overhaul Oxygen Fees, Add Supplier Requirements

Baltimore

CMS announced its plans in late July to overhaul its oxygen payment system, creating new categories and fees.

The proposed rule, issued in late July, implements a capped rental provision in the Deficit Reduction Act that requires providers to transfer title of oxygen equipment to the beneficiary after 36 months of rental. Similarly, according to the proposal, beneficiaries will acquire title to other capped rental equipment after 13 months of rental. The beneficiary would continue to pay coinsurance of 20 percent of rental payments, but would no longer pay coinsurance on the equipment after the transfer of title.

Under the proposal, CMS calls for reworking the oxygen classification system, splitting stationary and portable oxygen contents into two separate payment classes. The proposal also calls for a third payment class for new technologies, such as portable concentrators and home transfilling systems, that eliminate the need for refilling and delivery of oxygen contents.

In a release accompanying the proposal, CMS said the new structure is intended to ensure that payments for oxygen and oxygen equipment are accurate, that beneficiaries who use traditional portable oxygen systems have sufficient access and that Medicare payments do not create incentives to provide particular types of oxygen technology.

According to the proposal, payment for portable oxygen refills would increase to $55 compared to the current average refill payment of $21, but the monthly payment amounts for stationary oxygen equipment and contents would drop from an average of $199 to $177.

After the rental period, Medicare will continue to make monthly payments for oxygen contents for beneficiary-owned equipment. In addition, Medicare said it will pay for “reasonable and necessary maintenance and servicing of beneficiary-owned oxygen equipment and capped rental DME not covered by a supplier's or manufacturer's warranty.”

Provider Janice Petsch said the payment changes, combined with the oxygen cap, could make it impossible to maintain her company's current business model. For starters, the company will no longer be able to send therapists out to patients, she said, and other cost-saving measures will follow.

“I think we could handle a lot more if it was just one thing at a time,” said Petsch, who runs six-year-old Petsch Respiratory Services with her husband in Martinez, Ga. “I don't have a problem with the fee cuts and new regulations, but to do everything at one time now is incorrigible.”