Making It Happen

CMS' final rule implementing the Deficit Reduction Act's oxygen and capped rental provisions was a significant improvement compared to its proposed version. In addition, CMS' announcement of revised fees for power wheelchairs was a huge step in the right direction.

While Medicare's oxygen, capped rental and power wheelchair worlds are far from perfect, they are far better than they could have been. What does this mean? Solid data and consumer advocacy really can make the difference between bad policy that can devastate consumer access and policy that will ensure appropriate access.

The DRA provisions require Medicare monthly payment for oxygen equipment to be capped at 36 months. Title of the oxygen equipment will transfer from the supplier to the beneficiary at that time. In implementing the final oxygen rule, CMS clarified that effective Jan. 1, 2007, payment will be based on the specific equipment provided; that is, payment levels will vary based on the specific class of oxygen technology. But for purposes of counting toward the 36-month cap, Jan. 1, 2006, is the earliest month for beneficiaries who have been on home oxygen during 2006.

Under the final rule, CMS established separate classes and monthly payment amounts for both stationary and portable oxygen contents that must be delivered for beneficiary-owned liquid or gaseous oxygen equipment. CMS also established a new class and monthly payment for new technology such as portable oxygen transfilling equipment and portable concentrators. A higher portable add-on payment will be allowed for systems that eliminate the need for delivery and refilling of oxygen contents for portable systems.

To create the separate classes, CMS is using its authority established by the Balanced Budget Act of 1997; this authority requires payment changes to be budget-neutral. That means that Medicare's total spending for all modalities of oxygen equipment, including contents, must be the same under the changed payment rates as it would be without these payment changes.

To achieve budget neutrality, CMS will modify the respective payment rates for different oxygen technologies or classes to ensure budget neutrality on an annual basis.

Our industry made persuasive arguments to CMS that the payment levels in its August 2006 proposed rule were not, in fact, budget-neutral. As a result, CMS increased the monthly allowable for stationary equipment by about $20, and also the portable fees. The final rule states that payment for traditional technology, such as an oxygen concentrator and delivery of portable tanks, will be about $230 per month for months one through 36.