COPDF Releases New Guide on Home Oxygen Changes
July 9, 2010
The COPD Foundation has released a new guide on how the changes to the way Medicare pays for home oxygen will impact patients.
What’s the Issue?
In 2008, Congress passed a law that changes the way Medicare will pay for many types of supplies that beneficiaries receive at home. The law phases in a program called ‘competitive bidding’ starting January 1, 2011 in 9 different geographic regions (see below). The supplies impacted by competitive bidding, called durable medical equipment (DME), include oxygen concentrators, walkers, wheel chairs, prosthetic limbs, hospital beds, and mail order diabetes products among many others.
A complete listing of items is available on http://www.medicare.gov, however as a COPDer you are probably most concerned with how the changes in Medicare reimbursement could affect the oxygen supplies you receive at home. The new competitive bidding program means companies that provide your oxygen equipment will have to submit bids to Medicare reflecting the lowest price they can provide for the supplies. Medicare will then choose approved companies (called contract suppliers) and set the price based on the bids that were submitted.
If you live in one of the first 9 regions where competitive bidding will be implemented, you will have to get your oxygen equipment from one of the contract suppliers approved by Medicare, with a few exceptions described in detail below.
Medicare claims that the new competitive bidding program, which will eventually expand to 91 regions in mid-2012, will help lower costs of the system by32 percent. Since patients pay up to 20 percent of the costs of durable medical equipment, if Medicare sets lower prices than the consumer also pays less.
You may ask, “What is the issue?” Changes always raise questions and require information and education. Some small and medium size companies may not get approved as contract suppliers, and the trade associations representing these companies claim that they will not be able to keep providing the same services at the lower rates. Even if access is guaranteed for all, there will certainly be a period of transition causing patients and their families confusion over how and where they will receive their oxygen services.
What’s the Background?
Medicare currently pays for durable medical equipment based on prices that are considered “market based” and use very relaxed criteria on who qualifies as an approved Medicare supplier. As a result, prices tend to vary widely by region. Fraud in this category of Medicare reimbursement has been a constant concern. To lower costs, reduce fraud and more stringently certify the companies that are providing vital services, the Centers for Medicare and Medicaid Services (CMS) proposed that Congress mandate the switch to a competitive bidding program.
What is scheduled to happen?
There are many efforts underway to ask Congress to repeal the piece of the law (called the Medicare Improvements for Patients and Providers Act of 2008 or MIPPA) that mandated competitive bidding. As a result of advocacy efforts by patient groups and home health companies, Congress delayed the start of the program to allow for review of ‘who’ was qualified to provide beneficiary services. It is important for the community to be prepared for these changes while not giving up hope that advocacy may successfully reverse their impact. Visit the COPD Action Center and join us in taking action.