Medicare Compliance & Reimbursement

And an act of Congress couldn't hurt.

More questions than answers remain regarding how the Deficit Reduction Act of 2005 (DRA) will redefine Medicare payments for oxygen equipment But savvy suppliers know one thing for sure: Careful planning can help soften any blow the law might deliver.

"No one can afford to wait," says Lyn Kaman of Fox Medical Equipment Services in Collinsville, IL, echoing other suppliers.

The DRA, signed into law by President Bush on Feb. 8, includes a provision that caps rental of stationary and portable oxygen equipment at 36 months.

After 36 months, the supplier must turn over the title of the equipment to the Medicare beneficiary. The policy applies to all claims with an initial date of service of Jan. 1, 2006 or later.

Take These Steps To Cap Risk

Here's how industry leaders suggest providers respond as they move toward January 2009, the first month in which titles transfer to beneficiaries:

• Streamline operations. "Finding ways to boost efficiency and lower costs is always good advice," says Joe Lewarski, vice chair of the American Association for Homecare's HME/Respiratory Therapy Advisory Council.

Tip: Take stock of how much revenue is at risk for your business. Typically an oxygen provider will have only 8 to 12 percent of its total oxygen patient population on service beyond the 36-month point at any one time, notes Elyria, OH-based medical equipment firm Invacare Corp.

In addition, providers should begin to analyze their delivery and service systems for ways to cut costs while maintaining quality.

• Respond to market demand. Some relief from DRA provisions could come from efforts in the medical community to promote physician awareness of COPD, offers Sheila Ewing, an industry analyst with Frost & Sullivan. Only 50 percent of COPD cases are diagnosed, often at later stages in the disease, she wrote recently in U.S. Oxygen Therapy Devices Market, a subscription service of the consulting firm.

With more patients diagnosed--at earlier stages in the disease--an increase in demand for oxygen equipment could help suppliers offset some losses.

• Educate yourself. AAHomecare outlines key concerns in an April 20 letter to the Centers for Medicare & Medicaid Services. The letter lists 33 questions addressing medical necessity, documentation and reimbursement.
 
Resource: Read CMS' April 28 "education document" on the topic to find out how the provision could play out. For example, CMS says the cap will apply to all claims for the following HCPCS codes:

--E0424--Stationary gaseous oxygen system

--E0431--Portable gaseous oxygen system

--E0434--Portable liquid oxygen system

--E0439--Stationary liquid oxygen system

--E1390--Oxygen concentrator, single delivery port

--E1391--Oxygen concentrator, dual delivery port
 
--E1392--Portable oxygen concentrator
 
--E1405--Oxygen and water vapor enriching system with heated delivery

--E1406--Oxygen and water vapor enriching system without heated delivery

The missive also lists relevant HCPCS codes for oxygen contents: E0441, E0442, E0443 and E0444.

Mystery: CMS has yet to elaborate on how Medicare might reimburse providers for equipment maintenance, service and accessories following the transfer of title to the patient.

• Seek help. The best case scenario for oxygen providers is an outright rescue from Congress. Some are already listening closely to the case the industry is making for a repeal of the capped rental provision.