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Medicare Compliance & Reimbursement

DME:

Coming Oxygen Cuts Could Hurt Industry

Published on Mon Jan 03, 2005

But DME suppliers are no stranger to fiscal pain

Oxygen cuts to Federal Employee Health Benefit Plan levels will be a big burden on durable equipment suppliers. But the industry has seen rougher payment cuts before. In the late 1990s, it underwent massive 30 percent cuts at the hands of the Balanced Budget Act.

But this coming 10 to 20 percent cut "is still going to hurt," predicts Harold Davis, respiratory specialist for  the VGM Group's Nationwide Respiratory division.
  
Suppliers that are already on tight margins will be likely to pull out of business lines that require pricey overhead, such as liquid oxygen, he expects. "That will cause more patients to be in their homes and tied to tanks," Davis laments.

The Centers For Medicare & Mediciad Services is waiting on HHS Office of Inspector General data to set the new payment rates. In the meantime, durable medical equipment regional carriers are paying claims at 2004 levels.
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