AAHomecare Comments to 2008 Medicare Budget & Reaction to Proposed Oxygen Cuts

American Association for Homecare Opposes Proposals in President’s 2008 Budget that Would Weaken Seniors’ Access to Homecare

ALEXANDRIA, VA, February 5, 2007 -------- The American Association for Homecare today expressed deep concern about and strong opposition to several provisions of the President’s proposed 2008 budget that would weaken access to homecare for millions of older and disabled Americans.

The President’s proposal would heap new cuts on the nation’s homecare sector by requiring reductions to payments for homecare equipment, therapies, and visits from home health agencies. The proposed budget includes particularly severe cuts to home oxygen therapy. These homecare reductions come on top of numerous other cuts and freezes mandated by Congress in recent years.

“Homecare provides a clear path to more cost-effective care in Medicare and Medicaid,” stated Tyler Wilson, President and CEO of the American Association for Homecare. “Homecare delivers value for every healthcare dollar and is clinically effective and preferred by patients and families.  These proposed cuts serve only to hobble the homecare infrastructure that this nation desperately needs.”

Cuts to Home Oxygen Therapy, which Helps Nearly One Million Seniors Breathe

The American Association for Homecare opposes the proposal in the President’s budget that would force Medicare patients to assume the burden of owning and managing medical oxygen equipment in their homes after only 13 months of rental. The Association issued a statement objecting to the 13-month provision along with the National Home Oxygen Patients Association and the National Association for Medical Direction of Respiratory Care, a physicians’ group. The statement said, “We believe the proposed change in payment methodology places an unfair, unsafe, and unrealistic burden on the beneficiary.” The organizations are concerned that Medicare policy is increasingly at odds with the clinical needs of home oxygen therapy patients, as well as physicians’ and home oxygen providers’ ability to deliver optimal home respiratory care. (See full statement at www.aahomecare.org.)

The typical Medicare home oxygen beneficiary is a woman in her seventies who suffers from late-stage COPD with associated severe low levels of oxygen in her blood (hypoxemia). Approximately 15 million Americans have been diagnosed with COPD, and an estimated 12 to 15 million more remain undiagnosed. Medical oxygen is a highly regulated prescription drug. Because of services required for providing oxygen therapy, it is best suited to a continuing, uninterrupted relationship with a qualified home oxygen provider. Prior to the Deficit Reduction Act of 2005 (DRA), the home oxygen benefit in Medicare provided for rental as long as the prescribed oxygen therapy was medically required by the patient. Home oxygen has been the target of budget cuts for many years: Congress has reduced Medicare reimbursement for oxygen therapy by nearly 50 percent over the past 10 years.

Budget Proposal Would Reduce Access to Power Mobility for Disabled Americans

The association also opposes a provision in the President’s budget that would “establish a 13 month rental period for power wheelchairs.” The association believes that this change would reduce beneficiary access and increase costs to Medicare. Currently, Medicare permits a beneficiary to choose to purchase a power wheelchair when it is prescribed by a physician. When the beneficiary chooses to purchase a power mobility device, Medicare payment is made on a lump sum-basis. In October 2005, the Senate debated a provision to eliminate the first-month purchase option for power wheelchairs and decided to reject this policy change from the budget reconciliation package. The amendment was defeated based on the following reasons:

• Beneficiaries in need of power mobility devices suffer from long-term debilitating conditions that are not short-term in nature.
• Many power wheelchairs are custom-configured and individualized for the patient. These are not commodity items.
• Eliminating the first-month purchase option would severely curtail beneficiary access as the supplier will be unable to cover the significant up-front service costs that go into the provision of the most appropriate power mobility device to accommodate the beneficiary’s needs.
• Over 95 percent of all power wheelchairs are purchased in the first month because beneficiaries who meet the coverage criteria have long-term life needs.

The association recommends that Congress reject the administration’s proposal and maintain the first-month purchase option for power wheelchairs to ensure beneficiary access and cost savings to the Medicare program.

Payment Freeze Hurts Home Health Agencies

The Association also opposes the proposed five-year freeze (from 2008 to 2012) to the Medicare market basket payment update for home health agencies and the proposed market basket reduction of .65 percent for each year thereafter. While healthcare inflation has increased annually at more than 3 percent, home health agencies have sustained a number of reimbursement cuts in recent years that have hurt their ability to integrate new technologies, hire and retain staff, and initiate advanced clinical protocols. Medicare home health providers are currently participating in a one-year collaboration with the Centers for Medicare and Medicaid services to reduce the rate of hospitalization for Medicare patients.  A reimbursement cut will reduce resources required to invest in telehealth and other health information technology to achieve transformational change in the quality of care and avoid unnecessary institution costs for the Medicare program. In addition, the dramatic rise in fuel costs over the last two years has had a particularly negative impact on home health providers, whose nurses, therapists, and aides often have to drive great distances to provide health care services to patients in their homes.

U.S. Department of Health and Human Services Secretary Michael Leavitt has called for greater use of home-based care because “it’s not only where people want to be served, but it’s radically more efficient.” Less than 2 percent of the Medicare budget goes to home medical equipment and therapies.

ALEXANDRIA, VA, February 5, 2007 -------- Today, a group of organizations representing home oxygen therapy patients, physicians, home oxygen providers, and oxygen system manufacturers issued a statement opposing provisions in the President’s proposed 2008 budget that would threaten the home oxygen therapy benefit in Medicare.

The group, which includes the American Association for Homecare, the National Association for Medical Direction of Respiratory Care, and National Home Oxygen Patients Association, strongly objects to a proposal in the 2008 budget that would force Medicare patients to assume the burden of owning and managing medical oxygen equipment in their homes after only 13 months of use.

The statement says, “We believe the proposed change in payment methodology places an unfair, unsafe, and unrealistic burden on the beneficiary.” The entire statement can be viewed at www.aahomecare.org.

The organizations are focused on chronic obstructive pulmonary disease (COPD) patients and their safe and effective respiratory management in the home. The group is deeply concerned that Medicare policy is increasingly at odds with the clinical needs of home oxygen therapy patients, as well as physicians’ and home oxygen providers’ ability to deliver optimal home respiratory care.

The typical Medicare home oxygen beneficiary is a woman in her seventies who suffers from late-stage COPD with associated severe low levels of oxygen in her blood (hypoxemia). COPD is the leading cause of morbidity and mortality worldwide and is the only leading cause of death for which both prevalence and mortality are rising. COPD is a chronic, debilitating disease characterized by severe airflow limitation resulting from chronic inflammation of the airways, decrease in functional lung tissue, and the dysfunction of pulmonary blood vessels.

“The President’s proposed budget significantly impacts citizens least able to manage ownership of respiratory medical equipment,” said Jon Tiger, president of the National Home Oxygen Patients Association. “It leaves them without a network to ensure proper functioning of the equipment and to whom concerns can be raised. The proposal also removes the incentive for manufacturers to continually improve their equipment and will result in used prescription equipment ending up in the secondary market.”

Tyler Wilson, president and CEO of the American Association for Homecare, stated, “The proposed change to home oxygen therapy policy will hamper patients’ access to the therapy and discourage investment in new oxygen technology. We oppose forcing ownership on the patient, which saddles the beneficiary with unnecessary burdens. Moreover, home oxygen has been the target of budget cuts for many years. Congress has reduced Medicare reimbursement for oxygen therapy by nearly 50 percent over the past 10 years.”

Approximately 15 million Americans have been diagnosed with COPD, and an estimated 12 to 15 million more remain undiagnosed. COPD costs the U.S. economy more than $18 billion per year in direct medical costs and an estimated $11 billion in indirect costs.

Medical oxygen is a highly regulated prescription drug. Both medical oxygen and the systems that deliver oxygen require a prescription from a physician. Because of services required for providing oxygen therapy, it is best suited to a continuing, uninterrupted relationship with a qualified home oxygen provider. Prior to the Deficit Reduction Act of 2005 (DRA), the home oxygen benefit in Medicare provided for rental as long as the prescribed oxygen therapy was medically required by the patient.

The patient, physician, and provider organizations endorse the new national COPD public education campaign launched by the National Heart, Lung, and Blood Institute, which is designed to encourage better diagnosis, treatment, and awareness about COPD in order to spare patients the suffering and costs of this disease. (Visit the campaign website at www.LearnAboutCOPD.org.)