Home Health & Hospice Week

Providers flood forum with inquiries about drastic oxygen payment changes.

Suppliers are in a panic over the looming oxygen benefit changes, and a lack of hard information is only making it worse.

Starting Jan. 1, the Centers for Medicare & Medicaid Services will implement payment rules that pay for oxygen equipment for 36 months but require suppliers to furnish it for five years. In other words, providers will provide the equipment in the last two years with virtually no Medicare payment.

The five-year commitment with only three years of payment is the "trade-off" suppliers got when they had Congress repeal the transfer of oxygen equipment ownership after 36 months, CMS's Joel Kaiser maintained in the Dec. 9 Open Door Forum for home care providers. Now suppliers get to keep the equipment, but forfeit most payment.

And if a supplier takes on a patient, it doe not have the option of discontinuing service to that patient until the equipment's useful lifetime is up -- five years -- even if it wants to get out of the Medicare business altogether. The same goes for patients already on service, Kaiser said.

Suppliers are desperate for concrete answers to their many questions about oxygen reimbursement. The industry is "less than a month away from implementation," stressed Kimberly Rogers-Bow-ers with national oxygen chain Apria Healthcare. Companies need to program their software to accommodate new billing and documentation requirements, but they don't know what those are.

Suppliers need updates on a wide range of issues, noted American Association for Home-care's Walt Gorski in the forum. Confusion over the definition of the equipment's useful lifetime is especially widespread, Gorski said.

Requirements for certificates of medical ne-cessity when oxygen equipment is replaced are un-clear, Rogers-Bowers noted. Suppliers need to know whether lifetime CMNs apply to replaced equipment.

Suppliers are even more confused when they get conflicting information about the new system.

For example: In a Jan. 8 DMAC education call, Kaiser told listeners that CMS would restart the 5-year clock and 36-month payment period for oxygen equipment when a patient needed new equipment due to a change in condition and new doctor's prescription. But he rescinded that advice in the Open Door Forum, noting that CMS's policy is not to pay for new equipment when it is within the same HCPCS code, as oxygen concentrators are.

Protest: A Montana supplier noted that CMS's own payment policy differentiates between 4 liter and 5 liter concentrators with a billing modifier and different payment rates. But Kaiser said that didn't affect the policy of non-payment when switching equipment within the same HCPCS code.

Another example: Kaiser indicated in the call that suppliers could deliver more than one month's supply of oxygen contents at a time, thus eliminating the need to go to the patient's home every month, and still bill for the contents monthly. But Bowers-Rogers noted that current proof of delivery requirements don't allow that. Kaiser promised CMS would issue a national clarification on the issue.

CMS plans to issue a number of documents, including MLN Matters articles and other detailed guidance and instructions, very soon, Kaiser pledged. Replacement of oxygen equipment will be among the first issues addressed, he promised.

Medicare will restart the payment and lifetime clock when equipment is stolen or irreparably damaged, Kaiser clarified. He wasn't able to clarify what will happen when patients are "orphaned" by oxygen suppliers that go out of business.

New billing: CMS will split the current RP modifier for replacements into two, Kaiser shared. RA will be the new modifier for replacement of equipment and RP the new modifier for replacement of parts. "Those new modifiers will play a key role in how those claims are billed," Kaiser stressed.

Worst: The hardest part of the new payment methodology may be suppliers' responsibility for equipment provision when the patient moves out of the service area and Medicare is no longer making payments for the equipment. AAHomecare "can't stress enough" the problems that will arise from this provision, Gorski told CMS.

The Montana supplier urged CMS to put in place rules that would prohibit suppliers from charging other suppliers more than Medicare-allowable rates for the service.

Plus: In addition to the payment structure change, oxygen is undergoing a reimbursement cut Jan. 1. The 9.5 percent cut put in place when competitive bidding was postponed, combined with the lack of an inflation update and another administrative cut, equal a 16.8 percent reduction on what oxygen rates should have been, the National Associa-tion for Independent Medical Equipment Suppli-ers calculates.

Combined with the payment structure change, the cuts are "massive," warns the Council for Quality Respiratory Care. The cuts and chan-ges will strip $850 million from Medicare oxygen payments in 2009 and "an astounding $4 billion" over five years, CQRC notes.