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Former President Trump Signs Year-End Legislative Package Which Includes Oxygen Budget Neutrality And Extending The 2% Sequestration Relief

Year-End Legislative Package Includes Oxygen Budget Neutrality and Extending the 2% Sequestration Relief

On December 27, former President Trump signed the massive $2.3 trillion coronavirus relief and government funding bill into law, averting a government shutdown that was set to begin on Tuesday and extending billions of dollars in coronavirus aid to millions. This bill also includes two key HME pieces of legislation: Oxygen Budget Neutrality and Extending the 2% Sequestration Relief.

Both of the Oxygen Budget Neutrality bill (H.R. 8158) and the Extension of the 2% Sequestration had their own separate bills earlier this year and were included on the year-end bill, commonly referred to as a “Christmas Tree” bill, which contains many random riders and amendments like ornaments on a Christmas tree.

What does this mean for HME providers?

  • Oxygen Budget Neutrality goes back to 2017 when CMS incorrectly applied a budget neutral “offset” to rural fee schedules for oxygen concentrators. This led to an improper reduction in reimbursement for HCPCS E1390 by an additional 11% on average. This forced reimbursement rates in rural areas below the average regional competitive bidding special payment amounts (SPA). This legislation addresses the outdated budget neutrality regulation which “double dips” oxygen reimbursements, reducing them by an average of 11%.

This addition to the year-end bill will provide an additional 11% (on average) increase in oxygen reimbursement in non-competitive bid areas.

  • Extending the 2% Medicare Sequestration Moratorium for three months: The Medicare Sequester COVID Moratorium delays the 2% sequester cuts that were supposed to resume Jan. 1, 2021, for three additional months. Congress paused these cuts as part of broad-based COVID-19 relief granted in the CARES Act in March, but were set to expire on Dec. 31, 2020.

The inclusion of this language in the year-end package will extend the 2% sequestration moratorium for three months, but not through the public health emergency (PHE).

We will work in 2021 to have the 117th Congress extend this through the end of the PHE along with addressing non-rural competitive bid rates.

This is a great end to a taxing and onerous year in the HME world.  

VGM wishes to thank everyone, VGM members and state associations, who engaged with their members of Congress regarding these issues and for your continued grassroots efforts.  

We must remain proactive instead of reactive, and continue education, engagement, and relationship building with members of Congress in order to make changes like these possible in the coming year. We will be here with you in 2021 to continue the grassroots journey of improvements in the industry.

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