End-of-Year Threats

As the 109th Congress winds down, the final weeks and months of 2006 demand close attention.

One immediate threat relates to the CMS 2007 physician fee schedule, which proposed a 5 percent cut for physicians. That's about $1 billion more than expected, which means the “fix” will be more expensive than expected. Congress will likely act to prevent this cut. And that means home care pieces of Medicare will offer tempting targets.

Oxygen

Recently, the HHS Office of Inspector General issued a deeply flawed report about the cost of oxygen. That report looked only at concentrator costs — not the full range of services and other costs related to oxygen therapy. The report suggested “further reform is needed” and recommends a 13-month limit on oxygen equipment rental.

This report comes on top of the 36-month cap enacted in the Deficit Reduction Act. The DRA provisions force patients to assume ownership and responsibility for oxygen equipment after 36 months of rental, which effectively severs the relationship between provider and patient, introducing risks to the patient. Although the Senate said it was no longer considering the OIG's recommendation, the president's proposed FY 2007 budget includes a 13-month oxygen cap.

Both the DRA and the president's proposed budget underestimate the importance of services and assume that home oxygen in Medicare pays for equipment over and over. The importance of services was illustrated in a study by Morrison Informatics, commissioned by the American Association for Homecare. That study found that 72 percent of home oxygen therapy costs for Medicare patients are related to delivery, services and other non-equipment costs. Oxygen equipment acquisition represents only 28 percent of costs.

But for right now, we need to explain oxygen therapy to Congress, share Morrison study results, take members of Congress on site visits to oxygen patients and ask them to co-sponsor Home Oxygen Patient Protection Act, H.R. 5513, and the Senate companion bill, S. 3814.

Competitive Bidding

The final rule will identify the home medical equipment items and the initial 10 metropolitan statistical areas where competitive bidding is expected to begin in 2007. AAHomecare councils have worked very hard this year to shape the final rule and the quality standards. We have urged CMS not to rush implementation of this program.