Another Surprise

Catching the entire home care industry by surprise, CMS announced a dramatically different Medicare payment system for home oxygen on July 27.

In the proposal, which implements the oxygen and DME capped rental provisions of the Deficit Reduction Act, CMS calls for establishing separate monthly payment “classes” for portable and stationary oxygen contents delivery and new, alternative oxygen equipment technologies that meet the patient's oxygen needs without delivery.

• Classes and Payment Rates: CMS proposes establishing a new class and monthly payment amount for new technology such as portable oxygen transfilling equipment and portable oxygen concentrators. A higher portable add-on payment would be allowed for these systems that eliminate the need for delivery and refilling of oxygen contents for portable systems.

  The agency also suggests establishing two separate classes and monthly payment amounts for stationary and portable oxygen contents for gas and liquid beneficiary-owned equipment.

  By law, CMS is required to keep total spending for all modalities of oxygen equipment, including contents, the same under the proposed change as it would be without the change. To achieve this budget neutrality, CMS calls for lowering payments for some classes of oxygen and increasing payments for others.

• Maintenance and Service Payments: CMS would continue to pay for “reasonable and necessary” maintenance and service to beneficiary-owned oxygen equipment that must be performed by technicians (e.g., breaking seals). Beneficiaries and their caregivers would perform routine maintenance on beneficiary-owned equipment. CMS also would continue to pay for loaner equipment while a beneficiary's equipment is being repaired.

• Replacement: Under the proposal, the supplier would be responsible for replacement of beneficiary-owned oxygen equipment or capped rental items in use for less than five years — the current reasonable useful lifetime for DME — if total accumulated costs of repair exceed 60 percent of the replacement cost for the item. This would not apply in cases where replacements are covered under a supplier's or manufacturer's warranty.

  For beneficiary-owned items, the supplier that transferred title for the item to the beneficiary would be responsible for furnishing the replacement item. Separate payment for replacement of supplies and accessories (e.g. cannulas, tubing) would continue after ownership of the equipment transfers to the beneficiary.