The CQRC is committed to protecting access to home respiratory therapy and advocates for policies that support patients living with Chronic Obstructive Pulmonary Disease and other lung disorders who rely on home respiratory care to avoid hospitalization and sustain quality of life.

Protecting the Home Respiratory Therapy Benefit

Recognizing that home respiratory therapy is a critical set of services that can reduce hospitalizations and result in substantial savings for the Medicare program, CQRC urges Congress to protect the home respiratory therapy benefit from further cuts.  In recent years, the Centers for Medicare & Medicaid Services (CMS) has cut rates for home respiratory care providers by applying competitively bid rates in non-competitive bidding areas (non-CBAs), which are often rural, isolated areas where healthcare access is limitedand beneficiaries heavily rely upon home-based care.

According to a 2014 survey, the cost of providing services in non-CBAs for home oxygen equipment was approximately 18% higher than the cost of providing services in competitive bidding areas (CBA). Further, CMS applies a budget neutrality factor that results in an additional 11% cut in the rates for oxygen contractors.

Because suppliers must travel further to deliver care to rural seniors, and there are fewer patients among whom to spread the costs, per-patient costs in non-CBAs are often substantially higher than in CBAs. Patients also have more limited provider choice. In 43% of rural areas, Medicare beneficiaries have access to only one or two home oxygen therapy suppliers. In 35 percent of the rural areas, beneficiaries’ choices are also limited to only one or two suppliers for home sleep therapies.

Congress must protect the home respiratory therapy benefit by implementing current statutory requirements as written and not apply the neutrality factor when setting new fee schedules for oxygen contractors.Additionally, CMS should extend the phase-in of the Modified Fee Schedule and develop new rates that account for the actual cost of providing services in non-CBAs.

More information about recent cuts to the Medicare home respiratory therapy benefit can be found here.

Click here to see the CQRC’s letter to CMS regarding the DMEPOS Modified Fee Schedule.

Reforming Medicare’s Competitive Bidding Program

The CQRC urges Congress to ask CMS to reform the competitive bidding program before the next round of bidding occurs.

The current methodology used to determine competitive bidding rates is severely flawed and has led to a raft of market distortion and irrational bidding. As a result, the home respiratory therapy rate has been subject to inappropriate cuts since its inception.

According to a 2014 survey from CQRC suppliers, the cost of providing services in competitive bidding areas was approximately 5% higher than the rates determined through the bidding process. This is due to several factors, including the ability of smaller or inexperienced suppliers to low-ball their bids as well as poor oversight at the state level, which allows suppliers to bid in states where they are not appropriately licensed.

The CQRC recommends CMS do the following in order to create a stable process for determining rates:

  1. Treat home oxygen and sleep equipment as the two distinct products that they are.
  2. Replace the median methodology with a clearing price methodology for setting bid rates so that low-ball bidders can’t artificially lower the rates being set.
  3. Do not use bids or other information from inexperienced suppliers to set the rates.
  4. Eliminate composite bids and instead use a percentage of the 2015 DME Fee Schedule as the basis for bidding.
  5. Enforce State physical presence requirements to ensure winning bidders are appropriately licensed in the states in which they won bids.

More information about reforming the competitive bidding program can be found here.

Fixing the Broken Documentation and Audit Process for Home Respiratory Therapy

The CQRC strongly supports eliminating fraud and abuse in the Medicare program through rational, balanced, and targeted measures.

Data from CMS show that the clear majority of home respiratory therapy equipment and services are medically necessary. Though CMS estimated the home oxygen therapy improper payment rate was 45% in 2016, the CQRC found only 0.3% was due to the beneficiary not meeting the medical necessity requirements. More than 91% of the discrepancy can be explained by missing or incorrect documentation created by physicians and not suppliers, yet Medicare continues to demand an overly burdensome documentation process that serves no purpose. 

CMS must pursue common sense reform. Specifically, it should:

  1. Remove home respiratory therapy equipment from the face-to-face examination and the written order prior to delivery requirements, which are burdensome and costly.
  2. Modify the proof of delivery requirement to allow for alternative documentation options.
  3. Streamline the audit process to avoid duplicative audits of the same patient with a different date of service.

More information about fixing the broken documentation and audit process can be found here.

Click here to see the CQRC’s letter to the Centers for Medicare and Medicaid Services regarding the audit process.

Bundled Payments for Home Sleep Therapy

We believe that it is simply not appropriate for CMS to test bundling programs on home sleep therapy and services at this time. 

Home sleep therapy is a crucial component of patient-centered respiratory care that has been proven to increase long-term health outcomes and reduce overall Medicare costs. However, these gains would be threatened if CMS moves forward with its planned rollout of bundled payments for home respiratory care.

While the clear majority of Medicare bundled payment systems include safeguards to protect patients who require more services than the average patient, CMS’ current proposal makes it difficult to understand how the bundled rate would be appropriately balanced to ensure that high-cost patients continue to receive the care they need.

Furthermore, CMS’ justification for implementing bundled payments is not supported by data.
While CMS claims that bundled payments are needed due to rising costs of out-of-warranty repairs, the overall rate of such repairs remains low, at 0.8% between 2005 and 2016, according to industry data.

The current payment system for home sleep therapy is also very unstable, making it difficult to measure the bundled payment system’s overall impact on cost reductions. Recent changes to combine sleep and oxygen therapy into a single product category for competitive bidding for example, as well as substantial rate cutting in non-competitive bidding areas, will make it impossible to attribute any Medicare spending reductions to the bundle payments or other causes.

The CQRC maintains it is simply not appropriate to test bundling home sleep therapy supplies and services.  We urge CMS to suspend its plans to test a bundled payment program for sleep respiratory therapy.

More information about home sleep therapy bundled payments can be found here.

Take Action Now!

Learn More About Home Respiratory Therapies:

Millions of Americans are living with COPD and Obstructive Sleep Apnea, experiencing acute respiratory failure, or living with neuromuscular diseases. These individuals rely upon home respiratory therapies to remain at home. Learn more about home respiratory therapies and how they can help.

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