LANSING--The Michigan HME association has successfully postponed a potentially devastating Medicaid cut for home oxygen as providers wait for a new proposal from the state health agency.

At the end of last year, Michigan Medicaid proposed cutting oxygen concentrator reimbursement by almost 50 percent. But state officials have since put the proposal on hold as they await new fees for Medicare oxygen pricing, which CMS has yet to release. Michigan Medicaid bases many of its fees on the Medicare fee schedule.

The 50-percent-cut proposal came about when government officials examined several oxygen-provider contracts with the state's managed-care arm of Medicaid. "The state of Michigan, like many states, is in a huge budget deficit," said Steve Slater, general manager at Grand Rapids, Mich.-based Airway Oxygen and president of the Michigan Home Health Association--which has both home health and HME membership. "Medicaid makes up 28 percent of the total state budget, so they were looking for ways to save some money."

Slater said that Michigan's managed-care program holds contracts with only a few providers serving the whole state. "Medicaid serves the less-than-healthy individual," he explained. "You need to have good services. With one or two exclusive providers, service goes out of the equation.

"I cannot say enough good things about Michigan Medicaid," Slater continued. "[Agency officials] realized they didn't have the whole picture," he said, adding that the state gave the association a chance to explain respiratory therapies, accreditation and what's involved for providers in delivering quality service.