Medicare:

Access to Home Oxygen Largely Unchanged; Closer HCFA Monitoring Needed

HEHS-99-56: Published: Apr 5, 1999. Publicly Released: Apr 5, 1999.

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Pursuant to a legislative requirement, GAO provided information on Medicare beneficiaries' access to home oxygen equipment, focusing on: (1) changes in access to home oxygen for Medicare patients since the payment reduction mandated by the Balanced Budget Act (BBA) of 1997 took effect; and (2) actions taken by the Health Care Financing Administration (HCFA) to fulfill the BBA requirements and respond to GAO's November 1997 recommendations.

GAO noted that: (1) preliminary indications are that access to home oxygen equipment remains substantially unchanged, despite the 25-percent reduction in Medicare payment rates that took effect in January 1998; (2) the number of Medicare beneficiaries using home oxygen equipment has been increasing steadily since 1996, and this trend appears to have continued in 1998; (3) while Medicare claims for the first 6 months of 1998 showed a decrease in the proportion of Medicare patients using the more costly stationary liquid oxygen systems, this decline was consistent with the trend since 1995; (4) hospital discharge planners and suppliers GAO talked with said that even Medicare beneficiaries who are expensive or difficult to serve are able to get the appropriate systems for their needs; (5) further, suppliers accepted the Medicare allowance as full payment for over 99 percent of the Medicare home oxygen claims filed for the first half of 1998; (6) although these indicators do not reveal access problems caused by the payment reductions, issues such as sufficiency of portable tank refills and equipment maintenance could still arise; (7) HCFA has responded to only one BBA requirement; (8) as required by the BBA, HCFA has contracted with a peer review organization (PRO) for an evaluation of access to, and quality of, home oxygen equipment; (9) results from this evaluation are not expected before 2000; (10) meanwhile, HCFA has not implemented an interim process to monitor changes in access for Medicare beneficiaries--a process that could alert the agency to problems as they arise; (11) although not required by the BBA, such monitoring is important because of the life-sustaining nature of the home oxygen benefit; (12) until HCFA gathers more in-depth information on access and the impact of payment reductions, HCFA cannot assess the need to restructure the modality-neutral payment; (13) HCFA has not yet implemented provisions of the BBA that require service standards for Medicare home oxygen suppliers to be established as soon as practicable; and (14) service standards would define what Medicare is paying for in the home oxygen benefit and what beneficiaries should expect from suppliers.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: CMS, through a contractor, has conducted a long range study to monitor beneficiaries' use of, and access to, stationary liquid oxygen systems and gas portables. Additionally, CMS has collected information on access to oxygen through the competitive bidding demonstrations. Neither of these sources indicated any problems related to beneficiary access. The PRO study considered beneficiary use of oxygen, including the prescribed criteria above, and found no problems in relation to these factors.

    Recommendation: The Administrator, HCFA, should monitor complaints about and analyze trends in Medicare beneficiaries' use of and access to home oxygen equipment, paying special attention to patients who live in rural areas, are highly active, or require a high liter flow.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: CMS, through a contractor, has conducted a long range study to monitor beneficiaries' use of, and access to, stationary liquid oxygen systems and gas portables. Based on the PRO study, and information from the competitive bidding projects, CMS has decided that no restructuring of the payment system is needed.

    Recommendation: On the basis of this ongoing review, as well as the results of the PRO study, the Administrator, HCFA, should consider whether to modify the Medicare payment method to preserve access.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Implemented

    Comments: In August 2006, CMS published quality standards for suppliers of home oxygen and other durable medical equipment, prosthetics, orthotics, and supplies. These standards, among other things, require home oxygen suppliers to provide respiratory services 24 hours a day, 7 days a week as needed by the beneficiary and follow delivery and set-up practice guidelines established by the American Association for Respiratory Care.

    Recommendation: The Administrator, HCFA, should make development of service standards for home oxygen suppliers an agency priority in accordance with the BBA's requirement to develop such standards.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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