BALTIMORE--CMS will increase some monthly oxygen payments--vs. those released in its proposed rule--under a final rule issued Wednesday.

The rule implements a provision in the Deficit Reduction Act that requires providers to transfer title of oxygen equipment to the beneficiary after a 36-month rental period, which began Jan. 1, 2006, for beneficiaries already using oxygen. The provision also caps rental of other DME, such as wheelchairs and hospital beds, at 13 months.

Under changes in the 416-page final rule, which takes effect Jan. 1, 2007, for new and existing users, payments for stationary equipment during the rental period increased from $177 per month in the proposed rule to $198.40. After the ownership transfer, CMS will pay providers $77.45 a month to fill portable cylinders vs. a proposed payment of $55. Also under the final rule, the add-on rate for oxygen generating portable equipment will be $51.63 per month for 2007.

The agency said it will redistribute the current payment amounts each year to ensure annual budget neutrality, required under the law.

"In general, we are pleased that the administration/CMS recognize the various patient and cost saving benefits of patients using new technology [such as home transfilling systems], and that CMS addressed some of the industry's most significant concerns," said Cara Bachenheimer, vice president, government relations, for Elyria, Ohio-based Invacare Corp. "We are also glad that CMS is giving oxygen patients the freedom to switch to new technology, if they sign a patient consent form. CMS obviously wants to make it easier for patients to have access to the best technology available to them."

However, much of the rule is identical to the draft proposal, issued in July (see HomeCare Monday, July 31), which completely overhauled the oxygen payment system, creating new fees and classes.

CMS stressed that Medicare will continue to make monthly payments for oxygen contents for beneficiary-owned tanks and cylinders for as long as the patient medically needs oxygen. Medicare will also:

--Pay for "reasonable and necessary" maintenance and servicing of beneficiary-owned oxygen equipment and capped rental DME not covered by a supplier's or manufacturer's warranty. Specifically, CMS will allow payments for maintenance and servicing visits for certain oxygen equipment every six months beginning six months after beneficiary ownership, and also will pay for any required repairs. Payments will be based on the carrier's or the DME Medicare Administrative Contractor's rates for parts and labor.

--Allow one payment for suppliers to pick up and store or dispose of tanks and cylinders owned by beneficiaries who no longer need them.

--Continue to make separate payments for necessary supplies and accessories, such as replacement of cannulas and tubing.

As proposed in the draft, the final rule also contains supplier requirements to safeguard beneficiaries who own oxygen equipment and other capped-rental items. These include requiring a supplier who furnishes rented oxygen equipment or a capped-rental item in the first month to continue furnishing the item throughout the entire rental period. If suppliers switch out equipment, the replacement equipment must be of the same or greater value. Suppliers also may be responsible for replacing equipment that does not last for the useful lifetime established for the equipment under Medicare.

Additionally, CMS will require suppliers to disclose intentions regarding assignment for the entire rental period.

"There has been a great deal of misinformation about whether Medicare will continue to cover supplies and services for oxygen equipment," said Acting CMS Administrator Leslie Norwalk. "Be assured that beneficiaries will get the personalized support that they need."

According to CMS, the goals of reworking the payment structure are to "ensure that payments for oxygen and oxygen equipment are accurate, that beneficiaries who use portable oxygen systems have sufficient access to oxygen contents, and that Medicare payments do not create inappropriate incentives to provide particular types of oxygen technology."

To view the final rule, click here.