Statement of National Home Oxygen Patients Association

The National Home Oxygen Patients Association (NHOPA) welcomes the opportunity to comment on competitive bidding as it affects our members, users of home oxygen therapy. 

Our comments focus on what we have seen so far as implemented by the Centers for Medicare and Medicaid Services (CMS), what we have not seen, and what we anticipate will occur July 1^st and thereafter based on competitive bidding for home oxygen therapy.

First and foremost, we must strongly emphasize that bidding for oxygen and related services is, by definition, a flawed process because the current payment methodology for home oxygen is seriously flawed.  Competitive bidding for oxygen will likely exacerbate the situation, not improve it.  Under current statute, payment for new technologies such as lightweight liquid systems, portable oxygen concentrators, and transfilling systems is based on the pricing for stationary concentrators.  Simply stated, the statute that ties the payment of devices that today cost approximately $2500-$3500 to devices that cost $450 is irreparably flawed.  Access to these lightweight technologies is critical to the oxygen user population, and any effort to reduce payment for these devices will unquestionably put a greater strain on access to these technologies. 

For example, in non competitive bidding areas, stationary concentrators trigger a $199 payment, with an “add-on” of either $31 or $51 for the newer technologies.  The former costs a supplier around $450, while the latter costs $2500-$3500.  The very appropriate downward pressure on payment for stationary concentrators has the unfortunate effect of reducing payment for other devices, making access to them even more problematic.

Secondly, we were quite chagrined by CMS’ claim at the public hearing on May 6^th indicating that its advisory committee, the PAOC, served as an important liaison for input from the consumer community.  Oxygen is far and away the largest single component of the durable medical equipment benefit, yet CMS did not include either an oxygen user or a pulmonary physician as part of its advisory board.  Our views have, bluntly, been ignored by CMS.

Additionally, in 2007 we were approached by CMS contractor Abt Associates to assist in the development of a questionnaire/survey instrument to help assess the impact of competitive bidding, yet Abt ended that process before completion.  It is very difficult to believe that there will be an accurate and appropriate assessment of competitive bidding unless there is an accurate picture of access and quality prior to competitive bidding in the 10 MSAs where competitive bidding is slated to begin July 1^st, 2008.  Simply, one cannot assess impact unless one has a fair picture of the provision of oxygen and related services prior to July 1^st.

With competitive bidding less than 8 weeks away, to our knowledge there has been no direct outreach to oxygen users in any affected MSA.  If we understand the program correctly, a beneficiary whose supplier is not a winning bidder and chooses not to accept the winning bid under the “grandfather” provisions, will be required to find a new supplier.  That new supplier is unlikely to provide the identical oxygen system, and we understand and appreciate that some educational information will need to be provided regarding new stationary systems, new portable systems, and new oxygen conserving devices.  NHOPA has already begun that effort, but we see no movement by CMS to educate beneficiaries.

The beneficiary who must find a new supplier will likely have a chaotic July 1^st as new equipment arrives and old equipment disappears.  While a seamless process is possible, we are not exactly confident that such a transition will occur.  Once the old supplier pulls his equipment from the home, unless the new equipment is present and ready for use, there could be significant clinical risk. 

In terms of replacement equipment by the new supplier, CMS’ own pilot study of competitive bidding/oxygen usage in Polk County, FL and San Antonio, TX saw a reduction of 30% in access to lightweight oxygen systems.  CMS has never pursued our concerns regarding that matter, and implementation of this program absent such program changes will unquestionably trigger similar, dramatic access issues.  There is already some evidence that access to liquid oxygen systems in competitive bidding areas may be problematic, and this is of major concern to NHOPA.

There has been important discussion within the oxygen community regarding a slow down of Phase Two of competitive bidding.  We believe that it is appropriate to implement Phase Two once there has been a reasonable and accurate assessment of the impact of Phase One of competitive bidding AND time for CMS to adjust the program based upon that assessment.  We find it hard to believe that such an assessment could occur in time for a January 1, 2009 commencement date.  We also believe that there are ways to achieve ample savings within the Medicare home oxygen therapy benefit that would, in the aggregate, save Medicare, and the Congress/taxpayers, millions.  By establishment of a payment system that bases payment on a patient’s clinical need as determined by the prescribing physician rather than the supplier, and basing those payments to align on the cost associated with acquisition, delivery, etc., significant savings could be achieved.  It would take, however, aggressive action by the Congress to implement such changes.