Home Health & Hospice Week

Senate interest in 13-cap proposal dwindles.

Sen. Charles Grassley's (R-IA) recent pledge to drop consideration of a 13-month rental cap for oxygen equipment has oxygen suppliers and manufacturers cheering.

The 13-month cap proposal, included in President Bush's budget for fiscal year 2007, had garnered support from Grassley and others in the wake of a report from the HHS Office of Inspector General released in September. The news of Grassley's shift on the cap question came of Sept. 26.

In the report, "Medicare Home Oxygen Equipment: Cost and Servicing," the OIG argued that, even with a 36-month cap, Medicare and its beneficiaries will continue to pay more than 12 times the purchase price for stationary concentrators.

The origin of its claim: Based on the 2006 median fee schedule amount, Medicare will pay $7,215 over 36 months for concentrators that, on average, cost $587 to purchase.

"If Medicare rental payments for oxygen concentrators were limited to 13 months, the program and its beneficiaries would save approximately $3.2 billion over 5 years," the OIG stated.

The Council for Quality Respiratory Care, a coalition of 11 oxygen suppliers and manufacturers, criticized the study's "limited scope, small sample selection and failure to consider critical patient services."

Study Backs Up Industry Claims

The group pointed to an American Association for Homecare-commissioned study released in June that analyzed data from 74 suppliers who provide oxygen therapy to more than 600,000 beneficiaries. That study's findings: Services make up 72 percent of the costs of providing oxygen.

Grassley has "heard from his constituents" regarding his comments relative to the OIG report supporting capping oxygen reimbursement at 13 months, announced Invacare CEO Mal Mixon Sept. 26 during Medtrade.

To conduct the study, the OIG collected surveys from only 150 beneficiaries who rented oxygen in 2004. It also collected information from suppliers, and during site visits with suppliers in California and Florida, observed operations, service practices and beneficiary relationships.

Senator Grassley and the Senate Finance Committee were considering using the $6.5 billion savings (estimated by the CBO should oxygen equipment reimbursement cap at 13 months) to offset the "doc fix," according to John Gallagher, of Waterloo-IA based VGM Group. As of Jan. 1, 2007, physicians are scheduled to receive a 5.1 percent reduction in Medicare reimbursement. The Senate Finance Committee proposed to eliminate the cut via the savings realized from the additional oxygen cap.

• The Centers for Medicare & Medicaid Services is forging ahead with its plans to get the new Medicare Administrative Contractors (MACs) up and running.

On Sept. 29, the agency issued a Request for Proposal (RFP) for three of 15 separate contracts that will be issued in the transition from Medicare fiscal intermediaries and carriers to the MACs. On the same day, CMS announced that it would award the contract as a disputed contract for the specialty Durable Medical Equipment MAC in Jurisdiction C.

Earlier this year, the Government Accountability Office sustained a protest of the award for DME MAC Jurisdiction C. Now, after taking "corrective action," according to the announcement, CMS is awarding the disputed DME MAC contract to CIGNA Government Services. Originally, CMS had awarded the contract to Palmetto GBA.

Additional information on Medicare contracting reform can be found on the Medicare contracting reform Web site at www.cms.hhs.gov/MedicareContractingReform.

• Power mobility device (PMD) suppliers are leery of a recent assurance from CMS.

Restore Access to Mobility Partnership (RAMP), a coalition based in Bethesda, MD, is calling on the agency for more policy revisions and pricing information relating to a newly revised PMD Local Coverage Determination.

The group applauded CMS for working with stakeholders to clarify some issues in the newly revised local coverage determination. However, the coalition of power mobility manufacturers and suppliers reiterated industry concerns that additional policy revisions are still needed.

Breaking news: At press time, CMS had just released the Medicare fee schedule amounts for the new HCPCS PMD codes. For details and industry response, see the next issue of Eli's HCW.

Last month, the DME Program Safeguard Contractors issued the revised LCD, eliminating the "least costly alternative" determination, or automatic downcoding, that had drawn fire from both patient advocates and equipment manufacturers (see Eli's Home Care Week, Vol. 15, No. 35).

While RAMP said it appreciates the change, it is requesting additional assurances from CMS that downcoding will not occur. "At this point, stakeholders are merely seeking a letter or some kind of other written confirmation that this will be the policy so that it won't ever be an issue in the future when claims are under appeal or under review," the organization said.

RAMP also said CMS should eliminate the stand-and-pivot criterion used to determine whether a Medicare beneficiary qualifies for a Group 3 power wheelchair. Only patients who are incapable of an "independent transfer" qualify for a Group 3 chair, but some stakeholders are concerned that a literal interpretation of "independent" could include people who face a severe struggle to transfer themselves. This requirement should be replaced with clinical criteria that will provide access to the proper medical equipment for patients requiring complex rehabilitation, RAMP said.

• Charlestown Community Home Health of Baltimore, MD, has won the annual Delmarva Foundation Home Health Quality Award.

The award recognizes home health agencies that have among the lowest acute care hospitalization (ACH) rates nationwide, notes a press release from the quality improvement organization. Only agencies with ACH rates within the top fifth percentile of all agencies nationwide are considered for the award. Delmarva is the QIO for the District of Columbia and Maryland.

• CMS says most Medicare health care providers are satisfied with the program's customer service. Scores ranged from "1" (not at all satisfied) to "6" (completely satisfied). RHHIs averaged a score of 4.79. To view the report, go to www.cms.hhs.gov/MCPSS/05_MCPSS_Results.asp#TopOfPage.

• Medicare contractors including Palmetto GBA are reminding providers that health care clinicians and staff should receive the influenza vaccination.

For reimbursement information and resources related to the influenza immunization, go to www.cms.hhs.gov/MLNMattersArticles/downloads/SE0667.pdf