Home Health & Hospice Week

Budget shocker subjects oxygen to capped rental, forced purchase.

Congress wants to reduce the federal deficit--and DME providers may pay the price.

The U.S. Senate approved a hefty reimbursement cut for durable medical equipment providers during the chaotic closing days of the session that ended last month. Besides slashing Medicare payments for DME by $750 million over five years, the Deficit Reduction Act of 2005 (S. 1932) also transfers ownership of capped rental DME items to beneficiaries after the 13th month of rental (see Eli's HCW, Vol. XIV, No. 45).

But in a surprise development, the measure went a step further by subjecting oxygen equipment to capped rental--and transferring ownership of home oxygen equipment to beneficiaries after 36 months of renting. House Ways and Means Committee Chair Bill Thomas (R-CA) inserted the provision in the House-approved version of the legislation at the last minute, and the Senate passed it by 51-50, with Vice President Dick Cheney casting the tie-breaking vote.

Due to minor changes the Senate made to the bill, the House must give final approval to the plan when it reconvenes Jan. 31. That gives the industry time to lobby for changes to avert the financial blow.

"This bill has been publicly opposed by the homecare industry [and] medical device manufacturers, along with numerous professional clinical and patient advocacy organizations, simply because it is bad for patient care," according to a statement from the American Association for Homecare.

Lobbying Campaign Targets COPD Caucus

Thomas originally wanted to cap oxygen reimbursement at 18 months, which would have reduced Medicare reimbursement for DME by almost $3 billion over five years and by more than $8 billion over 10 years. But Invacare Corp. of Elyria, OH and Apria Healthcare Group Inc. of Lake Forest, CA led a successful lobbying effort to raise that cap to 36 months.

The provisions capping payments for home oxygen and other DME items would take effect for rentals beginning after Jan. 1, 2006. The measure also specifies that maintenance and service for equipment would be paid when actually provided, and it retains the first-month purchase option for power wheelchairs.

The VGM Group of Waterloo, IA has launched a letter-writing campaign targeting members of the Chronic Obstructive Pulmonary Disease Caucus who voted for the bill. By serving on the caucus, they may be "more aware of the effects oxygen has on improving the quality of life and slowing the disease state," according to a statement from VGM.

"I believe that we only need to have six to eight votes changed to defeat the bill," says Tom Pontzius, president of VGM's respiratory division. 

Note: Details on VGM's campaign is at www.vgm.com. More on the COPD Caucus is at www.uscopd.com/congressionalcaucus/caucusmembers.htm.