Home Health & Hospice Week

More payment changes loom for power wheelchairs, oxygen.

Watch out, Washington: Home medical equipment suppliers are choosing their battles--and there's a sure fight brewing over the feds' recent budget proposals.

Background: When President Bush released the budget blueprint Feb. 5, suppliers expressed dismay that the plan harbored bombs targeting HME spending (see Eli's HCW, Vol. XVI, No. 6).

In the weeks since, HME stakeholders have stepped up efforts to combat provisions in the administration's proposed budget for fiscal year 2008.

Topping the list of concerns are slashed Medi-care payments for most oxygen equipment and yet another change in Medicare policy for power wheelchair reimbursement.

Congress Could Rethink Oxygen Caps

The budget proposal suggests decreasing the allowable rental period for oxygen systems from 36 to 13 months--a threat to oxygen suppliers already struggling with reimbursement cuts (see Eli's HCW, Vol. XVI, No. 6).

And the Congressional Budget Office followed up with the same proposal in its "Budget Op-tions" report for 2008.

The change would take $500 million out of suppliers' pockets in 2008 and $3.5 billion over five years, CBO estimates.

Hidden benefit: But the proposal could turn out to be good news for suppliers hoping to persuade Congress to ditch the idea of oxygen capped rental. The budget doesn't expressly support continuing the new Medicare policy that requires seniors to assume ownership and responsibility for oxygen equipment after rental.

"The budget proposal's silence on this issue sends a clear signal to Congress that the [Bush] Admin-istration does not oppose reversal of the mandatory beneficiary ownership provision," notes a press release from the Elyria, OH-based oxygen supplier Invacare.

Change agent: The Home Oxygen Patient Protection Act (H.R. 621) would return Medicare policy for home oxygen therapy to the method in effect before the Deficit Reduction Act of 2005. The DRA forces patients to assume ownership of oxygen equipment after 36 months of use. Additional lawmakers have signed on in recent weeks to support the bill, bringing the total number of bipartisan cosponsors to 44.

Keep Ownership An Option

HME suppliers and manufacturers are also rallying against a budget proposal to eliminate an option that beneficiaries have now: to purchase a power wheelchair during their first month of use.

Background: The President's 2008 budget proposal calls for a new 13-month rental period for power wheelchairs, which would eliminate the first-month purchase option. Medicare, the administration argues, may be buying power wheelchairs for beneficiaries who need them for short periods of time.

Establishing a 13-month rental period for power wheelchairs would "ensure that Medicare and its beneficiaries no longer pay excessively for the purchase of equipment that could have been rented," the Department of Health and Human Services says in its budget summary.

Late in February, the American Association for Homecare's Rehab and Assistive Technology Council released research that refutes that claim. In fact, the study calculates that Medicare will pay about 5 percent more under the President's proposal than it does now with the purchase option in place, says Seth Johnson, RATC chair.

Example: The average Medicare fee schedule payment for a "Group 2 Standard Weight with Captain Seat" (HCPCS code K0823) is $4,023.70, notes AAHomecare in its report overview. By eliminating the beneficiary's purchase option and requiring her to rent a power wheelchair over a 13-month period, the total rental payments would be $4,224.91--a 5 percent increase in cost.

Access Problems Loom

If Medicare drops the first-month purchase option, providers of power wheelchairs could have a hard time securing appropriate credit and financing from lending institutions to cover the up-front costs of power wheelchairs and related services, says AAHome-care. If the federal government adds to the uncertainty about the need for power wheelchairs, lenders might be reluctant to extend credit.

In the end, eliminating the first-month purchase option could mean access problems, cautions Eric Sokol of the Power Mobility Coalition.

Currently, more than 95 percent of all power wheelchairs are purchased in the first month because beneficiaries who meet the coverage criteria have long-term life needs.

Problems with equipment accessibility may be already heading toward beneficiaries, says Jay Broadbent, owner of Alpine Home Medical and vice president of the Utah Medical Equipment Dealers.

Grim outlook: A recent AAHomecare study suggests that more than 1,500 wheelchair suppliers will go out of business because of the new Medicare and Medicaid power mobility rule changes.