WASHINGTON--The HME industry is still reeling over a provision tacked onto the federal budget bill at the last minute that would cap Medicare oxygen equipment rentals at 36 months.

Under the new provision, monthly payments for home oxygen rentals would stop after 36 months, and the equipment title would then be transferred to the beneficiary. For portable oxygen, the supplier would continue to receive the monthly portable add-on fee after 36 months.

"To me, this is the biggest thing that's ever happened. And I've been in this business 30 years," said Randy Wolfe, president and CEO of Lambert's Health Care, Knoxville, Tenn.

Before the holiday recess, both the House and Senate had passed budget versions that included the provision, but a final reconciliation vote in the House is still pending after minor changes were made by the Senate. In the meantime, industry leaders have been contacting legislators in an effort to educate them on the issue.

The subject was even raised on Jerry Springer's radio show last Thursday during discussion of a topic titled "Budget Cuts On Our Backs." Josh Sorrell, a Cynthiana, Ky.-based provider who called in to the show, said that Springer brought up the oxygen cuts as an example.

In a live interview broadcast during the show, "I made a point [that the government will be] shifting the burden to patients. By not having us maintain equipment, they're probably going to incur more costs rather than save money," said Sorrell, owner of Sorrell Home Medical. "We get calls in the middle of the night and, a lot of time, it's for something really small. If we were not there to help them, these patients would probably end up in the emergency room."

Because providers service and maintain equipment as part of the rental fee, patients also could be put in danger if they are made responsible for equipment upkeep, stakeholders said.

"These are some pretty horrendous provisions [in the budget bill] that came in at the last minute without any prior notice," said Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare Corp. "They raise all sorts of patient care issues. It's such a scary provision because when ownership transfers, the provider doesn't have an ongoing responsibility. It's a life-sustaining prescription device, and this provision leaves the beneficiary without a lifeline."

For example, in the event of an emergency such as a power failure or hurricane, providers will have extra tanks delivered, she said. But with this provision, "there's no financial foundation for that to occur," Bachenheimer continued. "How are [beneficiaries] going to obtain those services if Medicare is not going to pay for it?"

Wolfe said that after selling--versus renting--several oxygen concentrators to patients, he has seen firsthand the complications that can arise.

"In every single case that it happened, it was nothing but problems for these patients and families for the entire time that they owned their machine. It just does not work," he explained. "We don't even sell [concentrators] to nursing homes because they can't maintain them. They get them clogged up, don't know they're not working, and then when they finally get around to calling, [the concentrators are] putting out 40 percent oxygen and are almost beyond recovery."

Under the provision, parts and labor for maintenance and service for oxygen and other capped rental equipment would be paid, as determined by the HHS secretary, when not under a manufacturer's warranty.

If the budget bill is approved, the oxygen capped rental provision would take effect as of Jan. 1, 2006. For existing rentals, the 36-month count would begin Jan. 1.

But Rita Hostak, vice president of government relations for Longmont, Colo.-based Sunrise Medical, doesn't think the provision will take effect without serious consideration. "There are a lot of questions that will have to be addressed through regulation in order to implement this potential legislation," she said. "Once people begin discussing implementation issues, it will become very apparent that there are very serious implications regarding safety and efficacy that will impact beneficiaries."

Prior to the news, providers had already been concerned with a general capped rental provision in the bill, which would limit rental payments for most DME--including manual wheelchairs, hospital beds, nebulizers and CPAPs--to 13 months. Power wheelchairs are excluded from the provision, however, and current law gives beneficiaries the option to purchase them at the time of issue.

The oxygen provision was inserted into the budget bill by Rep. Bill Thomas, R-Calif., on Sunday, Dec. 18--only a day before it was approved by the House. The original provision called for capping rental payments at the 18th month, but the blow was softened when Ohio legislators threatened to derail the entire budget bill because of the provision, Bachenheimer said.

"Some of our allies [in Congress] were dumbfounded. The best they could do was extend the provision to 36 months," she said.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said that Medicare currently pays about $200 a month for each oxygen rental, and called the provision "a good first step" toward a better payment system.

But Bachenheimer contends that while Thomas' original provision boasted savings of $2 billion, that was lost when the time frame for the cap was extended to 36 months. "In theory there's no real savings," she said. "It's such a senseless provision. I can't imagine anyone had any understanding of the impact of this."

The most recent version of the federal budget bill is awaiting reapproval by the House, which is expected to reconvene late this month.

To view the text of the budget bill, also known as S. 1932, visit http://thomas.loc.gov.

For sample letters to Congress and other tips for taking action, visit www.aahomecare.org or www.vgm.com.

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