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Home Oxygen Community Braces for Massive Cuts to Medicare's Home Oxygen Benefit Starting January '09

Unprecedented Cuts of 27% Will Result in Service Reductions

WASHINGTON, Dec. 3/PRNewswire-USNewswire/ --Members of the Council for Quality Respiratory Care (CQRC) -- an alliance of the country's leading home oxygen providers and manufacturers that care for nearly half of Medicare's home oxygen beneficiaries -- are anxiously preparing for massive Medicare cuts to the program's home oxygen benefit beginning on January 1, 2009.

The Medicare Part B home oxygen benefit, which has experienced a series of funding cuts in recent years, is quickly approaching another round of deep cuts that were enacted by Congress in the Deficit Reduction Act (DRA) of 2005 and the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. Providers will be faced with Medicare cuts of an estimated 27 percent as the New Year begins, and those cuts are expected to impact services for patients who rely on home oxygen to treat their chronic or terminal pulmonary conditions.

These cuts equate to approximately $850 million in funding in 2009 alone. An astounding $4 billion will be cut from the benefit over the next five years despite the ever increasing number of seniors who require this essential, cost-effective service.

"These cuts will have a devastating impact on our nation's home oxygen community," said Peter Kelly, CQRC Chairman. "The magnitude of these cuts -- which include a cap on payments for patients who require oxygen therapy for more than 36 months and an additional 9.5 percent reduction -- is creating turmoil and uncertainty within the provider community." Government and industry estimate approximately one quarter of the nearly 1.4 million Medicare beneficiaries who rely on the home oxygen benefit will be affected by the cap in January 2009.

Exacerbating these cuts is a just-released Bush Administration regulation which will prohibit Medicare from paying for needed supplies and for responding to patient-generated requests for non-routine services after 36 months. Administration officials chose not to exercise their authority to pay for disposable oxygen tubing and other supplies patients need every month for their oxygen therapy after 36 months of service. Additionally, Medicare will not pay for patient-generated and emergency requests for non-routine services patients may require after 36 months.

In response to the rule Kelly stated, "The CQRC maintains that CMS has dramatically undervalued the important role that home oxygen care plays in preventing costly beneficiary emergency room visits, acute care admissions and avoidable physician intervention." The rule also requires providers to ensure the availability of equipment and services even if a patient moves to a region where the provider does not operate and even if that move takes place after Medicare stops paying for services at 36 months.

While members of the CQRC are extremely committed to making every effort to meet patient needs, there is concern about their ability to keep services at pre-cut levels given the looming cuts. Home oxygen providers in all regions of the country have been forced to make operational adjustments, which include staff layoffs. More adjustments are anticipated once the full impact of cuts is felt in early 2009. "The oxygen benefit has for years included a wide range of non-equipment services that patients need, and providers cannot reasonably be expected to continue providing many of these services on an uncompensated basis. Now the key question is: How will these impending cuts affect service levels for beneficiaries after 36 months?" added Kelly.

Home oxygen therapy costs Medicare only dollars a day by allowing beneficiaries to receive care in their home, as opposed to more expensive institutional settings. Government studies demonstrate that long-term use of home oxygen therapy reduces hospitalizations and, when hospitalizations do occur, reduces the length of the hospital stay. Despite these realities, government continues to focus on home oxygen primarily as an equipment benefit, rather than a cost-effective alternative to institutional care, and applies cuts accordingly.

"Home oxygen therapy fulfills a critical need for more than one million elderly and chronically ill patients in our country, and I cannot emphasize enough the impact these cuts will have on beneficiaries," said Kelly. "We pledge to comply with current regulations while working with Congress and the Administration to address the unintended consequences of legislation and regulations. We will closely monitor the impact of these cuts on the patient community to ensure that access to this life-enhancing and cost-saving treatment is not threatened and the integrity of the home oxygen benefit is maintained."

The Council for Quality Respiratory Care is an alliance of the nation's leading home oxygen therapy providers and manufacturers, representing nearly one half of the one million Medicare beneficiaries who depend on the home oxygen benefit for independence and quality of life. CQRC members include Aerocare Holdings, Inc., AirSep Corporation, American Association for Homecare, American HomePatient, Apria Healthcare, DeVilbiss Healthcare, Invacare, Lincare, Pacific Pulmonary Services, Praxair, Inc., ResMed, Inc., Philips Home Healthcare Solutions, Rotech Healthcare Inc. and Sunrise Medical, Inc.

SOURCE Council for Quality Respiratory Care
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