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Year-End Legislative Package To Include Oxygen Budget Neutrality And Extending The 2% Sequestration Relief

Congress will likely soon pass their year-end bill which includes two HME pieces of legislation: Oxygen Budget Neutrality and Extending the 2% Sequestration Relief.

Both the Oxygen Budget Neutrality bill (H.R.8158) and the Extension of the 2% Sequestration have been included on the year-end bill commonly referred to as a “Christmas Tree” bill, which contains many random riders and amendments, metaphorically like ornaments on a Christmas tree.

Click here to view the bill language.

What will this mean for HME providers?

  1. 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 percent 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 This legislation addresses the outdated budget neutrality regulation which “double dips” oxygen reimbursements, reducing them by an average of 11 percent.

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

  1. Extending the 2% Medicare sequestration Moratorium for three months The Medicare Sequester COVID Moratorium delays the 2 percent sequester cuts that were supposed to resume January l, 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 December 31st, 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, the 117th Congress, to extend this through the end of the PHE along with addressing non-rural competitive bid rates.

Continue to follow us for continued updates on the passage of this bill.