NEW RULES FOR HOW MEDICARE PAYS SUPPLIERS FOR OXYGEN EQUIPMENT

Changes in law require Medicare to change the way it pays suppliers for oxygen equipment and supplies. You will still be able to get your oxygen equipment. However, you should know about the new rules that start January 1, 2009.

How does the recent law change the way Medicare pays for oxygen equipment and related supplies?

Previously, the law stated that you would own the oxygen equipment after you rented it for 36 months. Under the new law, the rental payments will end after 36 months, but the supplier continues to own the equipment. The new law then requires your supplier to provide the oxygen equipment and related supplies for 2 additional years (5 years total), as long as oxygen is still medically necessary.

How does Medicare pay for oxygen equipment and related supplies and what do I pay?

The monthly rental payments to the supplier cover not only your oxygen equipment, but also any supplies and accessories such as tubing or a mouth piece, oxygen contents, maintenance, servicing and repairs. Medicare pays 80% of the rental amount, and the person with Medicare is responsible for any unpaid Part B deductible, and the remaining 20% of the rental amount. By the end of 36 months, total payments from Medicare and you to your supplier would be more than $7,000 (based on rental payments of about $200 per month).

What happens with my oxygen equipment and related services after the 36 months of rental payments?

Your supplier has been paid over 36 months for furnishing your oxygen and oxygen equipment for up to 5 years, and your supplier is required to continue to maintain the oxygen equipment (in good working order) and furnish the equipment and any necessary supplies and accessories, as long as you need it until the 5 year period ends. If you use oxygen tanks or cylinders that need delivery of gaseous or liquid oxygen contents, Medicare will continue to pay each month for the delivery of contents after the 36-month rental period. The supplier that delivers this equipment to you in the last month of the 36-month rental period must provide these items, as long as you medically need it, up to 5 years.

Will Medicare pay for any maintenance and servicing after the 36-month period ends?

If you use an oxygen concentrator or transfilling equipment (a machine that fills your portable tanks in your home), for 2009 only, Medicare will pay for routine maintenance and servicing visits every 6 months starting 6 months after the end of the 36-month rental period.

Why is the supplier not being separately paid for other maintenance and servicing such as repairs if the equipment breaks down?

Because under the new law, suppliers still own the equipment after the rental payments stop and are required to take care of the equipment they have been paid to furnish to you. The supplier can’t charge you for performing these services. This includes repairing the equipment and replacing any parts necessary to make sure that the equipment functions properly. If the equipment must be replaced because it will no longer function properly, the supplier must replace it with the same, or similar, make and model of equipment at no charge.

What happens to my oxygen equipment after 5 years?

At the end of the 5-year period, your supplier’s obligation to continue furnishing your oxygen and oxygen equipment ends, and you may elect to obtain replacement equipment from any supplier. Your current supplier will probably alert you before the 5-year period is over so that you have time to decide whether to obtain the replacement equipment from them or from another enrolled supplier that you choose if you decide to switch suppliers. A new 36-month payment period and 5-year supplier obligation period start once the old 5-year period ends and the new oxygen and oxygen equipment you require is furnished. All of the other rules described in this fact sheet apply to the replacement equipment and supplier of that equipment.

What if I’m away from home for an extended period of time or I move to another area during the 36-month period?

If you travel away from home for an extended period of time (several weeks or months)or permanently move to another area during the 36-month rental period, ask your current supplier if they can help you find a supplier in the new area. If your supplier can’t help you locate an oxygen supplier in the area where you are visiting or moving to, call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.

What if I’m away from home for an extended period of time or I move to another area after the 36-month period?

If you travel or move after the 36-month rental period ends, your supplier has been paid for furnishing your equipment for 5 years and is generally responsible for ensuring that you are provided with oxygen and oxygen equipment in the new area. Your supplier may choose to make arrangements for a different supplier in your new area to provide the oxygen and oxygen equipment. However, a supplier may not charge you for the equipment, supplies, accessories or other services identified above that are provided after the 36-month rental payment period. The only exceptions to this rule are noted above.

What if my supplier refuses to continue providing my oxygen equipment and related services as required bylaw?

 

COMPETITIVE BIDDING INFORMATION

Recently, a great deal of attention has focused on what is commonly referred to as “Competitive Bidding” in an attempt to control escalating Medicare costs, and its abundant fraud and abuse.  In the process of competitive bidding, the lowest bidding provider would be awarded exclusive contracts to provide services to Medicare beneficiaries.  Conversely, those providers who did not provide the lowest priced bid would no longer be allowed to provide services to Medicare patients.

We at Care Medical & Rehabilitation Equipment are staunch supporters of controlling Medicare fraud, and consistently advocate for responsibly regulated providership at the national, state, and local levels.  For many years, we have taken a proactive approach to maintaining the highest sustainable levels of care for our patients by accreditation and self regulation through such organizations as the Pacific Association of Medical Equipment Services (PAMES), and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

Unfortunately, there is insufficient evidence to conclude that competitive bidding would deter fraudulent providers from committing Medicare fraud.  In fact, there is overwhelming evidence that demonstrates that the exact opposite holds true.  Many independent studies have concluded that Competitive Bidding significantly lowers both the quality and accessibility of care that beneficiaries receive.

When providing healthcare services, it is essential to remember that we are not bidding on “widgets”, but rather patient’s prescribed plans of care.  While Competitive Bidding may be appropriate for bulk purchases of capitol acquisitions, it does not translate well to patient’s livelihoods, and directly threatens beneficiaries access to healthcare services.  By implementing the Competitive Acquisition Program, CMS has decided that quality is worth sacrificing in order to lower its costs. 

Unfortunately, this was evidenced between July 1st, 2008 and July 15th, 2008 when CMS implemented Competitive Bidding for Durable Medical Equipment in 10 Metropolitan Statistical Areas (MSA’s).  Providers in these areas witnessed dramatically reduced patient access to homecare services by winning providers who did not meet the minimal standards that Medicare providers are mandated to meet.  Several contracted providers had no previous experience in providing the particular services, or did not have actual physical locations to provide patient’s services.  Worse yet, some of the winning providers did not meet CMS’s own Medicare Supplier Standards, nor were they accredited as required by law.

Regardless of the overwhelming amount of data that proves the inadequacies of competitive bidding, U.S. Department of Health & Human Services (DHHS) Secretary Michael Leavitt, and Centers for Medicare & Medicaid Services (CMS) Administrator Kerry Weems continue to forge regulations that layer additional costly obstacles for legitimate providers while reducing the reimbursement allowables to the point that many basic services are simply unsustainable.

Fortunately, Congress passed the Medicare Improvements for Patients and Providers Act of 2008 otherwise known as MIPPA or the “Doc Fix” bill on July 15, 2008.  The original intent of this legislation was to delay scheduled Physician’s payment cuts of 10.6%.  Fortunately, this bill also postponed the full implementation of CMS’s Competitive Acquisition Program for 18-24 months.  Unfortunately, it did so by subjecting those 10 product categories to a 9.5% nation wide reduction in reimbursement rates in order to pay for the delay.  The scheduled implementation date is January 1st, 2009.

These 10 Product Categories include:

• Oxygen supplies and equipment

• Standard power wheelchairs, scooters, and related accessories

• Complex rehabilitative power wheelchair and related accessories

• Mail-order diabetic supplies

• Enteral nutrients, equipment, and supplies;

• Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related accessories

• Hospital beds and related accessories

• Negative pressure wound therapy (NPWTP) pumps and related accessories

• Walkers and related accessories

• Support surfaces (group 2 and 3 mattresses and overlays)

We at Care Medical believe that regulation can be positive when it is balanced with common sense, humanity, and sincerely feel that patient’s access to homecare services should be encouraged rather than limited as it continues to be the most cost-effective resource in our healthcare system.  We will continue to advocate for evidence-based practices and policies from those legislators, administrators, and providers who serve the citizen beneficiaries under the Medicare and Medicaid programs.  We do not consider our patient’s care to be the “lowest common denominator” when considering the quality of care to provide.

Starting January 1st, 2009 providers will see a 9.5% reduction in reimbursement allowables that will make many services impossible to provide to Medicare and Medicaid beneficiaries.  Please contact your legislators today to advocate for your continued benefits by fixing the 9.5% reductions under MIPPA.  It might just be your services that are threatened!