Feb. 10, 2017
Published by The Hill
By Dan Starck


Fix Medicare Payments For Home-Based Respiratory Care For Good

Last year, Congress put a much-needed Band-Aid on a dangerous Medicare policy affecting more than a million Americans with chronic lung conditions, like Chronic Obstructive Pulmonary Disease (COPD) and sleep apnea.

That bandage – delaying the phase-in of drastic cuts for home oxygen therapy and equipment – might have slowed the bleeding, but the underlying issue still remains: slashing reimbursement amounts by 30 to 50 percent, based on a flawed competitive bidding methodology, threatens the lives of patients and simply does not reflect the realistic costs of providing today’s care.

Those drastic cuts, which have now gone fully into effect, have providers nationwide holding our collective breath while hoping Congress and the new administration will intervene. Policy decisions made in Washington D.C., like competitive bidding and adjusting payment rates in nonurban areas, are certainly formed with good intentions – like reducing overall costs to patients and the Medicare program. But in practice – in the homes of our patients living with chronic illness – the true impact of these policy decisions is devastating.

Patients who suffer from conditions like COPD don’t have the luxury of going with the flow while lawmakers hash out the difficulties with reimbursement methodologies. For these patients, home respiratory therapies, innovative devices and related care aren’t simply optional, ancillary services. Lack of oxygen, equipment and care when the body can’t take in enough oxygen on its own is fatal.

COPD – a group of respiratory illnesses which includes chronic bronchitis and emphysema – has been diagnosed in an estimated 15 million Americans nationwide, and is the third leading cause of death in the United States affecting 12 percent of Medicare beneficiaries. Patients diagnosed with COPD can live long and productive lives, but not without the support provided to them by suppliers of home oxygen and sleep therapy – support that will soon evaporate if funding is not steadied.

For example, last year, as the result of current payment methodology, some home respiratory therapy providers were no longer able to provide certain equipment to Medicare patients and were forced to eliminate the delivery of supplies.  We have also known for a long time that the method Medicare uses to determine the competitive bid rate inappropriate lumps oxygen and sleep therapies into a single category and uses the median, rather the expert-recommended clearing price, to set the rates.  Both of these policies have resulted in rates sinking below the cost of providing patient care and services.

It’s a horrifying situation for patients, and also for the organizations that provide these services. Although they are committed to caring for patients, policies enacted by Congress are making their work difficult to impossible. 

It’s a flawed process with many shortcomings, to say the least. According to a recent study by the Moran Company, the current method used to set rates in competitive bidding – and now even non-competitive bidding areas of the country – allows them to submit unrealistically low offers with the knowledge that they can simply refuse to enter into a contract if the ultimate bid price is too low to cover their expenses. Moreover, some bidders are able to “game the system” because of the use of “composite bids.” These types of bids are weighted compilations of several products into one price – allowing incentives for bidders to bid low for some products and high for others, leading to skewed pricing.

The complexities of the policies affecting home oxygen therapy have an incredibly simple result: worse care for Americans. And, unfortunately, poor care for Americans with chronic lung illnesses translates to increased ER visits and hospitalizations, increasing costs for Medicare overall. 

It’s time for policy makers to intervene and fix the payment methodology for Medicare home respiratory services and supplies to ensure it reflects the true costs of patient care.  It’s time for the new administration and Congress to finally offer a permanent, long-term solution that makes sense for Medicare.

Dan Starck is the Chair of the Council for Quality Respiratory Care.



To learn more, visit cqrc.org and follow CQRC on Twitter at @TheCQRC.

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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