Now that patients are getting out and about more often, home medical equipment providers are finding the capitated rate Medicare pays for oxygen and cylinders doesn't cover the cost of providing extra cylinders and refills for traveling patients.

For providers such as Diane Dunlavey, business manager of Valley Home Health in San Diego, this can add up to trouble. "I was paying out more money than Medicare was paying me," she says.

Dunlavey recalls that when one of her customers took a trip to Hawaii, he needed a new portable and new cylinders on each island he visited. It seemed as if her company was paying for part of the trip, she says.

The solution? Valley Home Health now pays for the traveling patient's oxygen, but the patient has to pay for the portable. "When you rent a car, you still have to make your car payment," Dunlavey explains. "It's the same premise."

Until Medicare changes its capitation structure to meet patients' ambulatory needs, she predicts, more providers will be forced to set similar limits to stay afloat. -M.S.