Rethinking Home Care

Vol. 16 •Issue 6 • Page 30
Rethinking Home Care

A former RT gains a seat on Capitol Hill as the industry faces ‘extraordinary pressure.’

A flurry of cost-cutting mandates raining down from Medicare pummeled durable medical equipment providers through much of 2006. Then, in November, a most unexpected event allowed a little sunlight to peek through the clouds: One of their own opened an office on Capitol Hill.

Rep. David Davis, BS, RRT, a former home care therapist and DME supplier, found an ideal way to share his views and concerns about the U.S. health care system with members of Congress.

He became one of them. The Republican from Tennessee won a seat in the U.S. House of Representatives, the first RRT ever elected to Congress.

“Being a member of Congress gives me the opportunity to highlight the importance of good quality health care at all levels,” Davis said. “Home care is part of that equation, and I think it can be provided in a cost-effective manner – more so than in an institution.”

He’ll have his hands full. The federal government in 2006 slashed away at Medicare’s budget, including reimbursement for home care services, to save the besieged entitlement program from going belly-up.

Contentious cost-cutting

First, Medicare officials finalized their effort to replace the current DME payment structure with a competitive bidding process set to begin in October in 10 metropolitan areas.

Then, Medicare ruled patients renting home oxygen equipment must eventually purchase that equipment from their suppliers.

Both mandates are designed to save money — and both are contentious.

“The severe fiscal pressure on the federal budget due to the deficit and the war created extraordinary pressure on Congress to cut spending,” said Michael Reinemer, vice president of communications and policy for the American Association for Homecare (AAHomecare), an organization that represents DME providers. “Medicare spending has skyrocketed, so virtually everything is on the table as a potential cut.”

The fact that Democrats now control Congress, he added, “affects some of the dynamics but not the underlying pressures to cut Medicare.”

A third development in 2006 also carries heft for home care industry watchers. The National Institutes of Health launched a clinical trial loaded with implications, the largest-ever study to judge the efficacy of long-term home oxygen therapy for patients with chronic obstructive pulmonary disease.

Lowest bidders

Competitive bidding, a result of the Medicare Modernization Act of 2003, will require suppliers to bid to furnish items in competitively marketed areas of the country. Rural areas with populations under 500,000 likely will be exempt.

By choosing the lowest bidders, the program will save $1 billion annually when fully implemented in 2010, the Centers for Medicare and Medicaid estimates.

Critics are already weighing in. Davis, for one, has concerns about low bidders skimping on quality. “I think we have to take a strong look at this to make sure they have the equipment and technical staff available so quality care is provided,” he said.

Furthermore, if the same bidders win contracts again and again, “We have to look at the potential for monopolies,” he warned. “That wouldn’t be good for the quality of care in the future.”

Harsher words come from the Arlington, Va.-based AAHomecare.

“Whether competitive bidding ever saves the government a dime depends on how the budget impact is calculated or ‘scored,’” Reinemer said. “We believe that the harm to the nation’s home care infrastructure caused by competitive bidding will cost the nation dearly in the long run. Also, the full administrative and bureaucratic costs of creating and implementing a competitive bidding program must be completely and accurately factored in before any assessment about the true costs is made.”

Accrediting boon

Only accredited DME providers are allowed to bid, CMS officials have ruled, a requirement that will keep the Joint Commission and its many sister accrediting agencies busy.

Make sure whatever accrediting agency you choose focuses mainly on two elements: the quality of your services and patient safety, Robert Floro, RRT, advised home care providers at the American Association for Respiratory Care’s 2006 meeting in Las Vegas. “Make sure their standards are relevant. Not all accrediters do this effectively. (They) should be willing to sit down and listen to you.”

And get used to the unannounced accreditation survey, warned Floro, senior associate director of the Joint Commission. “It’s here. It’s not going away,” he said. “(Unannounced surveys) are part of CMS’ culture.”

Another speaker, Timothy Buckley, RRT, who directs respiratory care services for Walgreens Home Care, Deerfield, Ill., drew a laugh when he urged the crowd to “skip the craps tables tonight and get working on accreditation if you’re not already accredited.”


In the second of its two-pronged attack on costs, CMS in November issued a final rule that requires a DME provider to transfer title of oxygen equipment to a beneficiary after 36 months of renting to the beneficiary. The legislation, mandated by the Deficit Reduction Act of 2005, takes effect January 2009.

Having patients own their oxygen equipment will reduce Medicare’s reimbursement for oxygen services, potentially saving another $1 billion annually, Medicare officials hope.

Davis, though, worries again about reduced quality of care and, hence, patient safety.

“I have a real problem with this one,” he said. “My mother passed away from COPD. She was on home oxygen for five years. Had she not had a reliable piece of equipment that was maintained, she probably wouldn’t have lasted five years.”

Hospital beds or wheelchairs are one thing, but concentrators and other technical equipment “need a quality check on a regular basis,” Davis added.

Patient protection act

The AARC and other health care advocacy groups are lobbying to repeal the Rent-to-Purchase Act, saying the bill doesn’t sufficiently make clear what responsibilities beneficiaries must assume once they take ownership of their equipment.

Their proposed legislation is the Home Oxygen Patient Protection Act (H.R. 621 and S. 1484). This bill would restore the oxygen policy that was in effect before passage of the Deficit Reduction Act.

Rent-to-purchase is “based on the mistaken idea that oxygen therapy only entails the cost of the equipment,” Reinemer said. “In fact, equipment costs represent only 28 percent of the cost of providing home oxygen therapy to Medicare beneficiaries, according to the 2006 Morrison Informatics study.

“Nearly three-quarters of the cost (72 percent) is tied to services, regulatory compliance, delivery, and other non-equipment costs,” he went on. “Medical oxygen is a highly regulated prescription drug, and it should be reimbursed under a policy that provides for continuing rental as long as medically necessary.”

Oxygen trial

Meanwhile, CMS officials also will have reimbursement in mind as they watch the NIH’s six-year home oxygen treatment trial unfold.

Investigators hope to recruit more than 3,000 people with moderate COPD to 14 institutions across the country for the oxygen trial.

Half will be randomized to receive supplemental oxygen for three years. The rest won’t receive oxygen therapy.

Decreased mortality is the primary outcome, but the study also will look at quality of life, exercise tolerance, easing of respiratory symptoms, cost-effectiveness, and rate of hospitalization, said Philip Diaz, MD, associate professor of pulmonary medicine at one testing site, Ohio State University Medical Center, Columbus.

Criteria for entry will be an FEV1 of about 65 percent of predicted and an oxygen saturation range of 89 percent to 93 percent. At issue is whether or not home oxygen can improve these moderate symptoms.

“There’s a little controversy about this,” Dr. Diaz said. “Myself, I’m not sure. We may have some benefits with exercise tolerance, but the whole idea of quality of life is open. The mortality question is hard to say. Most of us involved have pretty open minds about it. It’s an unanswered question.”

Michael Gibbons is senior associate editor of ADVANCE. He can be reached at [email protected].