Vol. 15 •Issue 5 • Page 28
Challenges for Home Oxygen Users
New Medicare policy gives beneficiaries ownership of equipment after 36 months.
With the whoosh of a pen, President Bush signed into law Feb. 8 the Deficit Reduction Act (DRA) of 2005. The Congressional Budget Office has estimated that the DRA will result in net savings of $40 billion in federal entitlement programs over the fiscal years 2006-2010, and it has been projected to generate $99 billion savings over the 2006 to 2015 period.
A small but significant part of these savings is projected to result from a decrease in Medicare reimbursement for home health services and durable medical equipment. In particular, Section 5101 of the DRA has gained the respiratory medicine community’s attention because it raises many important concerns for patients with lung disease who are oxygen dependent.
Under current law, Medicare will make rental payments for oxygen equipment for an indefinite period. Section 5101 includes the provision that payment for oxygen equipment (including portable oxygen equipment) may not extend over a period of continuous use of longer than 36 months. After 36 months, the supplier will transfer title of the equipment to the individual.
Somewhat less clear is who will provide and pay for service and maintenance after the 36 months. In its brevity, Section 5101, which takes effect January 2009, raises more questions than it addresses.
The Congressional Budget Office estimates that changes to Medicare’s payment rules and other durable equipment would reduce Medicare spending by $0.7 billion over the 2006-2010 period and by $1.9 billion over the 2006-2015 period.
Trials of long-term home oxygen therapy have been shown to prolong life expectancy in chronic obstructive pulmonary disease patients in studies done in the United States and England more than three decades ago. It’s from these studies that medical criteria for prescribing and “qualifying” for oxygen have been developed.
Respiratory therapists should be familiar with the American Association for Respiratory Care’s clinical practice guidelines and Medicare guidelines that spell out in detail indications for initiating home oxygen therapy. These criteria include documentation of PaO2 < 55 mm torr, or O2 saturation < 88 percent room air.
These guidelines were based on studies of COPD patients with arterial blood gas/saturation determinations done at rest breathing room air. Medicare guidelines also have tried to address criteria for prescribing oxygen with ambulation/exercise and for documented nocturnal hypoxemia. In these settings, oxygen clearly improves quality of life symptoms such as shortness of breath but may or may not actually have a mortality benefit.
A medical bargain
Oxygen therapy is considered a federal legend drug. The machine that makes oxygen (concentrator, liquid system, etc.) is dispensed by prescription only. Important questions to ask are: How many patients in the United States are receiving oxygen therapy, and how much does it cost?
Accurate data are hard to obtain. Extrapolated data from a few large home care companies in the mid-1990s estimate that 800,000 patients were receiving home oxygen therapy at that time.
At that same time, the National Association for Medi-cal Direction of Respiratory Care obtained data directly from the Health Care Financing Administration (renamed the Centers for Medicare & Medicaid Services) indicating that the number of patients could be projected at 616,000 patients. The estimated Medicare cost at that time was more than $1 billion.
The vast majority of home oxygen therapy is delivered by oxygen concentrators. The concentrator uses a molecular sieve to extract oxygen from the atmosphere. At 3 to 5 Lpm, oxygen concentrations are 85 percent to 93 percent.
The current cost of an oxygen concentrator has fallen over the past several years due to improvements in technology and competition between manufacturers. Currently, an online Internet search indicates most devices cost $1,000 to $1,500.
For home use, a 24 hour/day running concentrator can be expected to increase an average monthly electric bill by only 5 percent to 10 percent.
I think everyone would agree that oxygen is a relative “medical bargain.” If these costs are averaged over three years, the daily “cost” of oxygen is less than many of the other common life-saving prescription drugs needed by the elderly patient population.
The understandable concern of our patients with lung disease as well as their home care providers is the important realization that the costs noted above represent only a fraction of the expenses associated with the provision of home oxygen therapy.
Whether the DME supplier is a multinational corporation or a small local company, all usually provide many additional services. These include 24/7 service for mechanical malfunction, third-party insurance processing, home instruction and follow-up care by an RRT, and many other forms of supplemental respiratory care.
It’s usually the home care provider who keeps abreast of technological innovations. This may mean replacing new regulators on tanks when necessary or offering new portable systems or conserving devices.
Provisions of the DRA now will provide for ownership of oxygen concentrators after 36 months of Medicare payments to home care companies. At this time, it remains ambiguous as to whether or not the government will make further payments for ongoing equipment service needs and replacements of supplies such as tubing, masks, etc. Payment of such services currently is directed to be “in an amount to be determined appropriately by the Secretary.”
Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, has stated that Medicare will still pay for necessary and appropriate service and maintenance of oxygen equipment, even once you own it.
He also has stated that Medicare will still pay separately for an unlimited period of time for oxygen contents and delivery for those using liquid or gas cylinders/tanks or portable equipment. Medicare will pay separately for replacement of supplies and accessories such as masks and tubing required for the equipment.
More than 14 million Americans have a diagnosis of chronic obstructive lung disease, and this remains the fourth-leading cause of death in the United States. Many of these individuals either are currently using oxygen therapy or remain at future risk for needing oxygen. This is a large “interest group” that can be very effective in the political process that effects the budgetary process.
As advocates for our patients with lung disease, health care providers need to let our elected officials know we’re concerned about this issue. Home care is a cost-efficient means of caring for our patients with chronic debilitating lung disease.
The budgetary process must allow us the means to provide for our patients in a responsible way.
Michael Bauer, MD, is director of the pulmonary disease division at Bassett Healthcare, Mary Imogene Bassett Hospital, Cooperstown, N.Y.