Friday, July 24, 2009

Wall Street Journal Fails to Provide Key Facts on Oxygen and Bidding

The Wall Street Journal published a story today about Peter Orszag, White House budget director, suggesting that Orszag was surprised that a member of Congress would want to increase oxygen payments in Medicare. An increase? The irony is that the fervent wish of the oxygen community is to simply end 10 years of cuts. Oxygen has been cut 27 percent -- so far -- in 2009 alone, required by the Deficit Reduction Act of 2005 and the Medicare Improvement for Patients and Providers Act of 2008 provisions. The Medicare Modernization Act of 2003 cut oxygen as well.

Oxygen payments are about half of what they were 10 years ago. How can Orszag be worried about higher rates for oxygen?

The perception of overpayment stems from the law, which only recognizes the cost of the oxygen equipment. The assumption is you could deliver an oxygen concentrator (and back-up system for power outages) to a COPD patient and they will be able to handle every detail of receiving medical oxygen, which is a highly regulated prescription drug.

The HME sector is low hanging fruit for cuts, representing politically easy “pay-fors,” given the numerous cuts over many years. What other sector has been cut more? The entire sector (oxygen, wheelchairs, etc) represents about 1.7 percent of Medicare spending and spending growth in the HME sector was 0.75 percent (2006 to 2007 National Health Expenditures data).

Moreover the article fails to mention, with respect to competitive bidding, that the home medical equipment community accepted a 9.5 percent cut beginning in January of 2009 that pays for every dollar of the approximately one billion that the bid program was projected to have saved taxpayers during the delay. The program is still designed to put most providers out of business, even if they agree to new competitively bid rates.

So it's discouraging to see no context or history or figures in the Journal’s discussion of oxygen and bidding – if the topic is controlling healthcare spending in Medicare. Homecare is not the problem in healthcare by any stretch of the imagination.

To view the article, visit

No comments: