Important Alert for Medicare Patients Who Use Supplemental Oxygen

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Beginning January 1, 2019 changes will occur to how the Centers for Medicare and Medicaid Services (CMS) will pay oxygen suppliers for delivering supplemental oxygen and oxygen equipment to patients. During this time, CMS will suspend its current payment system, known as competitive bidding.

The COPD Foundation is concerned that this change may have an impact on people who use supplemental oxygen and we are standing by to hear from you about your concerns, so that we can reach out to CMS. We are coordinating with fellow patient and healthcare professional organizations on this important access issue.

Please email statecaptains@copdfoundation.org or call 1-866-316-COPD (2673) Monday-Friday between 9am-6pm if you are experiencing any problems as a result of this change or if you have been contacted by your patients or suppliers about required changes to their prescriptions. We want to understand the issues and make sure that we are communicating these problems to decision makers in an expedient way.

If you are a current liquid oxygen patient and have been told by your supplier that you will no longer receive liquid oxygen, please ask for documentation and save any letters or emails you may have received from your suppliers. If this occurs, you should also immediately reach out to your doctor’s office to assist you in managing the potential impact of this change and to help you seek potential solutions from other suppliers in your area.

More Detailed Background Information

Supplemental Oxygen: Changing Medicare DME Reimbursement Policy Could Impact Patient Access

Starting January 1, 2019, the Centers for Medicare and Medicaid Services (CMS) will suspend the Medicare competitive bidding program for Durable Medical Equipment (DME), including supplemental oxygen, for at least 18-24 months while they redesign the bidding process. How this “gap” in competitive bidding contracting for DME products will impact patient access to supplemental oxygen – particularly liquid oxygen – remains to be seen, but provider and patient groups are concerned that patient access to supplemental oxygen could further erode during the competitive bidding “gap” period.

What is Competitive Bidding?

Prior to competitive bidding, CMS paid for DME products based on a fee schedule that used industry provided information to set schedule rates. In 2009, Congress changed the system to one in which DME suppliers bid on multiple items and services within a product category, with the winning bidder contractually obligated to provide all the products covered in their contract within a defined regional area. For oxygen DME suppliers, this meant the winning bid was obligated to provide all types of oxygen equipment, including liquid oxygen systems. Competitive bidding was gradually rolled out to defined regions throughout the country, with rural areas largely excluded from the bidding and contracting process. However, in recent years, the fee schedule for rural area suppliers has been adjusted to reflect similar drastic reductions in reimbursement under competitive bidding.

How Has Competitive Bidding Changed Patient Access to Supplemental Oxygen?

While competitive bidding has been very successful in reducing Medicare DME spending, it appears to have significantly reduced patient access to liquid oxygen systems. In 2010, the first year of competitive bidding for DME oxygen, there were 40,938 Medicare beneficiaries using liquid portable oxygen systems. By 2016, that number has dropped to 8,141. A similar decline was seen in stationary liquid oxygen systems with 32,220 in 2010 declining to 5,948 in 2016. There has been no change in clinical practice or respiratory disease patterns that would explain such a dramatic reduction in liquid oxygen. The obvious explanation is that DME companies are trying to adjust to lower reimbursement rates by reducing access to the most expensive type of supplemental oxygen – liquid oxygen.

Additional patient reported impacts since the implementation of competitive bidding have included reduced delivery frequency, limited numbers of portable tanks, service and education challenges and more.

DME companies under contract with CMS in a competitive bidding area are contractually obligated to provide the oxygen system that is prescribed by the physician liquid oxygen systems. Despite this contractual obligation, there is abundant anecdotal evidence that DME companies are trying to save money be not fulfilling prescriptions for liquid oxygen systems.

What Does the Competitive Bidding “Gap Period” Mean?

For 2019 and 2020, all current competitive bidding contracts will expire and CMS will not engage in any new contract for two years. During the “gap period”, CMS will allow any DME company willing to accept Medicare payments to fulfill DME prescriptions. There will no longer be any contractual obligation for DME companies to supply prescribed liquid oxygen (though that contractual obligation was of dubious value to Medicare beneficiaries because it relied on a challenging enforcement process). Some DME industry representatives have predicted that even more DME companies will stop providing liquid oxygen systems.

7 Comments



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  • I am wondering how this change is likely to affect those using non-liquid oxygen systems.

    Also, when you state, "During the “gap period”, CMS will allow any DME company willing to accept Medicare payments to fulfill DME prescriptions.," does that mean that we can change DME providers? (I have a "good" provider, but a friend has one that is not as reliable. The friend would change if possible.)
    Reply
    • I think that we are very unsure how the gap period will affect those using non-liquid systems at this stage. We know that even during competitive bidding periods we saw issues like limited number of tanks, requiring patients to pick up their own tanks, less choice and other concerns that could be amplified during the gap period but it is hard to know for sure at this stage. There is a chance that more companies could come into the market without having the Medicare contract requirement but that is not highly likely.

      In regards to changing companies, you are still only able to change company if its at the end of your 5 year period. The only change is that any company who is willing to accept the Medicare payment rate is now able to provide oxygen services, whereas in competitive bidding areas, only companies who "won" contracts from Medicare were able to provide services. It is unclear if this will result in new options yet, especially in areas where there are only 1-2 suppliers....

      Great questions and please let us know if you or your friend have anything to report as the gap period gets under way.
      Reply
  • I have been on oxygen for over a dozen years now. I have LIncare. Is this something I should be worried about , or is there any action I need to take? I'm concerned enough with my breathing let alone a lot of government tape. I am on it 24/7 plus nebulizer machines and Triology non invasive ventalator as I stop breathing at night. thank you for any information you can provide

    Reply
    • I wouldn't be that worried if you don't require any special equipment like liquid or require a lot of extra tanks, but saying that, all oxygen users should be concerned. I a way it could be a good thing, because apparently Medicare now realizes the bidding system is deeply flawed. As to whether it changes for the better or worse is still up in the air, as the people reviewing it are the same ones who came up with the idea. What is most important is that patients provide feedback and make their voices heard. That is the only way we can change this for the better!
      Reply
  • I have used liquid oxygen foe 13 years. On Jan. 14 2019, I was notified by the driver that I would no longer be getting liquid O2. The manager of the Lincare office in San Antonio TX. that services my account couldn't be bothered to notify me of this change. I still have not received any official notification other than the verbal message from the driver. I have no indication what other arrangements have been made if any. If I don't receive oxygen supplies by the time the liquid runs out, I am considering a law suit.
    Reply
    • Hi Tom,

      Thank you for sharing and I am sorry you are having to deal with this difficult situation. Your situation is exactly what we are fearful of during this gap period and it is critical to report this so that the Centers for Medicare and Medicaid Services is aware of the issue.

      Would you be able to call our COPD Information Line today and complete a short series of questions so that we can gather additional info and I will also follow up with you directly if you give the Info Line your email address or phone number. They can be reached at 866-316-COPD (2673).

      It is also critical to demand something in writing if at all possible. I hope that they reverse course and take care of your needs but please keep us posted and I would be most appreciative if you could give the Info Line a call. If you prefer not to chat on the phone, email me at jsullivan@copdfoundation.org and I will let you know the types of info that we are collecting.

      Thank you!
      Reply
    • Yikes, Tom! Please file a formal complaint with the COPD info line and also with Medicare.
      This is precisely the concern that has been raised time and again.
      So far, my driver is supposed to bring my liquid O2 on 4th Wednesday as usual. They’ve threatened to discontinue it many times since I started it with Apria in 7/2016 but so far have continued to deliver to me and two other patients in our state.
      Reply

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