An Uncertain Air

The home oxygen therapy market has certainly seen its share of reimbursement cuts and regulatory changes over the years. But the newest policy change, enacted under the Deficit Reduction Act, will create unique challenges for both HME providers and patients alike.

Under CMS' final rule on oxygen, issued to implement the DRA provision last month, ownership of oxygen equipment transfers to Medicare beneficiaries after a 36-month rental period. The rule takes effect Jan. 1, 2007 — with a counter from Jan. 1, 2006 — which means providers must take action now to change practices that will allow them to remain successful in the oxygen business.

“The reality is that some level of service and support will be reduced to balance the impact of the reductions,” says Kim Snyder, U.S. marketing manager, home respiratory care, Respironics. “Providers that have the greatest control over reducing their non-value-added services, without compromising quality of patient care, have the best chance of succeeding.”

“You can only stay in this business if you start working smarter,” agrees Kelly Riley, director of The Med Group's national respiratory network.

“Providers also must be willing to embrace new technology and streamline their businesses. There is absolutely no room any longer for duplication in any process. The front end has to be streamlined, and the assessment piece has to be accurate — making sure you are matching up the right system with the right patient.”

Providers must also consider effects of the new rule on patient care and service following the 36-month cap. Under the rule, CMS will pay for “reasonable and necessary” maintenance and servicing visits every six months, beginning six months after the equipment title transfers, but there are other considerations that have not been addressed.

“Operationally, it will be a challenge to be able to address the concerns of the beneficiaries who own their own equipment from a service and repair standpoint,” says Tom Pontzius, president of Nationwide Respiratory, a VGM Group company.

“Many beneficiaries will call the provider who provided the repair and maintenance of their equipment during the first 36 months, but after transfer of ownership, the provision doesn't provide for emergencies or making additional visits to a beneficiary to check the operational efficiency of their equipment.”