Home Health & Hospice Week

Medicare pays higher 2004 rates while mulling this year's cuts.

Oxygen suppliers are going to have to wait a bit longer to find out 2005 payment rates - but not to get paid for current oxygen claims.
 
The Centers for Medicare & Medicaid Services will pay oxygen claims at 2004 rates until it calculates new - and lower - 2005 payments rates, it says in a message to providers. CMS is waiting on data from the HHS Office of Inspector General to make the payment rate change, and earlier told suppliers that Medicare contractors would hold 2005 oxygen claims until it finalized the rates.
 
The VGM Group threatened to file an injunction in federal court if Medicare contractors continued to hold oxygen claims instead of paying them. For many VGM members, "the effect of any delay in payment will result in a forced closure of business and the resultant inability of Medicare beneficiaries to receive life-saving oxygen in a timely manner," David S. Barmak, VGM's counsel, said in a Jan. 12 letter to CMS.
 
Oxygen and related equipment is most likely headed for a 10 to 20 percent payment reduction this year. That's because the Medicare Modernization Act requires the items to come in line with payment levels from Federal Employee Health Benefit Plans (see Eli's HCW, Vol. XIII, No. 33, p. 262).
 
CMS originally expected to receive the OIG's FEHBP pricing data by Jan. 15, but last week said that deadline would lapse without the information being passed on.

Cash to Start Flowing Again

Now: CMS has relented, announcing that it will pay 2005 claims at the 2004 levels until it receives the OIG oxygen data and sets the new rates.
 
And CMS won't grab that money back later. Claims with dates of service on or after Jan. 1 paid at 2004 levels "will not be retroactively adjusted after the 2005 fee schedule amounts are implemented," CMS promises in its announcement.
 
Later: But after the rates go into effect, all claims dated Jan. 1 or later will be paid at the new, almost certainly lower rates, CMS clarifies.
 
"The go ahead of billing oxygen claims for 2005 was great news," says Sarah Lott, president of Texas Star Medical Billing in Vidor, TX. "I was afraid the hold would get lengthy and Medicare systems might 'accidentally' hold 2004 oxygen claims also."
 
Now savvy oxygen suppliers should submit their oxygen claims as quickly as possible to "capture the 2004 rates" while they still can, advises Harold Davis, respiratory specialist for VGM's Nationwide Respiratory division.
 
"Delays in billing may result in claims falling under the new upcoming cuts," Lott warns.
 
Don't overlook: Suppliers get in their claims for new patients as quickly as possible to obtain reimbursement, Davis notes. But they may forget to submit their re-bills for continuing patients just as quickly.
 
Often suppliers bill for continuing patients only once or twice a month. Under this interim policy, they should be billing closer to once a week, he suggests.
 
The American Association for Homecare praises CMS' move. It's "vital to ensure continuing reimbursement," AAH notes. 
 
Editor's Note: CMS' announcement is at www.cms.hhs.gov/suppliers/dmepos/oxygen_011305.pdf.