Home Oxygen—Show Us the Money

Home oxygen therapy represents perhaps the single most clinically valuable and cost-effective tool for managing COPD. So it is bewildering to providers that the federal government discourages use of home oxygen therapy by relentlessly, remorselessly eviscerating Medicare reimbursement for it.

In a nutshell, opponents of the cutbacks argue, these reimbursement reductions threaten the ability of home health care companies to provide both equipment and respiratory therapist support. The latest threat (now quelled) was a proposed sharp reduction of the time limit (imposed not all that long ago) on rentals of home oxygen stationary concentrators and some portable equipment: In Washington, DC, the House of Representatives was thinking of halving this cap to 18 months from its current span of 36 months.

“For a lot of players, an 18-month cap could have been the straw that broke the camel’s back and caused them to exit the business entirely,” says Thomas J. Williams, managing director of Strategic Dynamics Inc, a Scottsdale, Ariz, consulting group working with manufacturers on business planning and on bench/clinical testing of products.

Adds Joseph Lewarski, BS, RRT, FAARC, vice president of the respiratory division of Invacare Corp, Ridgeville, Ohio. “The cap reduction that had been under consideration was simply bad policy driven by misinformation. Had it been approved by the House, it would have been just one more in a decade-long series of cuts in home oxygen reimbursement that have, over those 10 years, reduced payments to providers by approximately 50%—and that’s not counting the additional reductions of Medicare’s new national competitive bidding cost-savings program.”

Try to Weather It

Given the way things have been trending, the best that home oxygen providers can do at the moment is try to weather the storm, advises Robert McCoy, RRT, owner and managing director of Valley Inspired Products, Apple Valley, Minn, a research outfit involved in the testing of respiratory technology and publisher of a consumer-oriented guide to oxygen-conserving devices.

But riding it out almost certainly will not be easy because “75% of the cost of oxygen for most providers is service, not equipment,” says McCoy, who also is chairman of the home health care section of the American Association for Respiratory Care (AARC). “Oxygen equipment has for all this time been paying for the associated therapy, even though the government doesn’t know it and didn’t ask for it. The government’s expectation was that we would simply drop off equipment and that would be the end of it. But, instead, many of us voluntarily provided therapy as a value-added service. From a profitability standpoint, providing therapy for no extra money was not a good move. But from a marketing standpoint, it was an excellent way for providers to differentiate themselves and pave the way for business growth.”

Granted, the cost of home oxygen therapy when viewed as a single line item from the Medicare budget can appear high; but weighed against other health care costs, it often proves to be a low-priced leader. “It wins every time,” says Lewarski. “How many other drugs that reduce morbidity and mortality can be provided at a cost of less than $8 per day?”

Those sentiments were echoed in a letter to the editor that appeared in the December 7 edition of the New York Times from Peter Kelly, chairman of the Council for Quality Respiratory Care, a group of the nation’s leading home oxygen therapy providers and manufacturers. Kelly argued that oxygen is more than an equipment rental, that it is, in fact, a highly regulated, prescribed medical treatment. “Patients require not only equipment but also corresponding services that are essential in ensuring that they benefit from the therapy …,” he wrote. “[G]overnment data demonstrate that oxygen therapy reduces the frequency and duration of hospitalizations, resulting in program savings of hundreds of millions of dollars, while allowing patients suffering from severe lung disease to remain stable at home.”

The Tough Go Shopping

The 36-month cap impacts providers and patients in different ways, although it is a matter of particular worry to respiratory therapists on the front line of treatment delivery.

“Respiratory therapists play a big role in deciding which equipment a home health care provider will acquire and make available for rental, so RTs have their work cut out for them in terms of identifying the products that are both clinically effective and affordable,” says Williams. “What we’ve observed is a lot of them choosing products that are a good price value in terms of reliability, durability, length of warranty, and cost of routine daily operation.”

McCoy believes that RTs who go shopping for home oxygen equipment would do well to keep in mind patient preferences. “Consumers want a lightweight, long-lasting, portable oxygen delivery device,” says McCoy. “Industry has responded to what consumers are demanding by, in part, coming up with a gamut of oxygen-conserving devices. However, no attention has been paid to whether these devices are actually oxygenating the patient. In other words, industry’s response has not been focused on clinical efficacy. And, unfortunately, many clinicians have accepted unchallenged the claims that conserving devices are equivalent to continuous flow devices with regard to settings, when in truth they usually are not.

“Equipment is a tool; it’s not an end point—and it needs to be recognized as such. If the tool doesn’t yield positive results, the therapist must find others that will. For example, if the patient is not being adequately oxygenated by any of the popular low-dosing systems, then the therapist should look into switching to one of the high-dosing systems, an option that does exist.”

Williams, meanwhile, finds growing provider interest in obtaining oxygen equipment requiring no weekly or monthly replenishment visits to the home—so-called nondelivery devices. “Oxygen-generating portable equipment [OGPE] is an entire category of products that includes portable concentrators such as the Inogen One or the AirSep FreeStyle, AirSep LifeStyle, Respironics Ever Go, or the next step up—the Sequal Eclipse—or one of the three brands of transfilling concentrators, which include systems from Sunrise Medical/DeVilbiss, Chad Therapeutics, and Invacare,” he says.

Still, Williams expresses concern that some providers as a survival tactic may end up eschewing OGPE technology and instead adopting a business model wherein patients are obliged to periodically visit a provider facility to exchange empty cylinders for filled. Such an arrangement, he says, “would not qualify as good quality medical care.”

In the Dark

If lawmakers play it right, further reductions in Medicare reimbursement for stationary home oxygen rentals might not be a total disaster—and actually might turn out well, some assert. “Consider that now-abandoned 18-month cap as an illustration,” Williams proposes. “Congress could implement it, then take the resultant savings and plow those back into the pool to pay a higher reimbursement for the more expensive OGPE technology that patients—and their physicians—want in order to be mobile, a very desirable thing.”

Alas, solutions of that sort tend to elude congressional thinking, Williams concedes. “Part of the problem is that the home health care industry is poorly portrayed on Capitol Hill,” he says. “Congress hears only about how the large national providers are making record profits. They surmise that this is true of the entire industry and that, therefore, all the individuals who make up the industry can easily tolerate further cuts in reimbursement.”

A remedy advocated by Williams entails having those involved in home health care ally themselves with physician groups and their lobbyists so that the value of oxygen therapy can be more forcefully argued. Williams believes that RTs are uniquely positioned to assume leadership roles in the effort to develop such alliances with physician groups and lobbyists. They also are uniquely positioned to help eliminate the dearth of scientific evidence that now prevents Congress from appreciating why they should relax or eliminate the 36-month cap on oxygen rentals.

Even so, to a certain unhappy degree, therapists’ hands are tied. Concedes Williams, “Therapists don’t own the companies, so they have no control over whether money will be spent on dues to join the organizations that can form alliances with physician lobbying groups. Likewise, they have no control over whether money will be spent to conduct basic science. All they can do is make recommendations.”

But at a higher level—the association level—more than making recommendations is possible. Indeed, McCoy says the AARC’s home health care section will attempt to tackle the matter with a multipronged strategy that begins by amassing the scientific evidence to support claims of therapeutic validity. “We want there to be no disputing the value—and reimbursement necessity—of home oxygen therapy,” says McCoy, speaking as the home health care section chairman. “We’re going to emphasize patient outcomes first, then the economic advantages that payors can expect from having oxygen therapy provided in the home environment.”

The AARC home health care section’s strategy also includes advocating congressional passage of HR 3968—Medicare-related legislation designed to make it easier for patients to utilize the services of RTs.

Silver Lining

When all is said and done, some speculate, it is possible that Congress will see the light on home oxygen therapy.

“Hopefully, Congress [will] recognize the true value of the home oxygen benefit—and can remember that there have already been significant payment reductions imposed,” Lewarski says.

McCoy, however, doubts that the government will cough up the extra reimbursement dollars to cover the true costs of home oxygen therapy any time soon. “They do nothing until they’re forced to,” he says of the nation’s lawmakers. “Right now, the template is that the home health care industry is another name for fraud and abuse. So, what government feels it’s forced to do is tighten the reins, not loosen them.”

The silver lining is that Medicare patients may not abide such shenanigans much longer. “The people who receive oxygen at home are benefiting from the RT-provided therapy that goes along with the equipment,” McCoy asserts. “They’re not going to want to see that end. So, at some point, government is going to have to respond to the growing outcry from beneficiaries who want to know why the therapy they’ve been receiving is disappearing.

“Our challenge is to help reinforce the message that patients are sending and will increasingly be sending.”

Lewarski agrees. “We need to continue to focus on operational efficiency and delivering good patient care within the rules and constraints of the system,” he says. “Equipment is only one vital piece of this equation, and failing to look globally at this important benefit does a major disservice to the patients, physicians, and home health care providers.”

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Rich Smith is a contributing author to RT. For further information, contact [email protected].