Current Issues In Home Long Term Oxygen Therapy

Approximately 15 million Americans have been diagnosed with chronic obstructive pulmonary disease (COPD), and an estimated 12 to 15 million more remain undiagnosed. COPD is the fourth leading cause of adult death, and it costs the U.S. economy more than $18 billion per year in direct medical costs and an estimated $11 billion in indirect costs.(-1-) COPD is responsible for a significant portion of all physician office visits and emergency room visits and ranks number three in acute hospital admissions among Medicare-aged persons. The average length of stay for a COPD admission is 5.1 days at the rate of more than $4,000 per day.

The scientific basis for the use of long term oxygen therapy (LTOT) in the treatment of stable, chronic hypoxemia in the United States traces its roots to the Nocturnal Oxygen Therapy Trial (NOTT) study.(-2-) The NOTT study established the important role low flow oxygen therapy plays in the home management of severely hypoxemic (PaO2 <55 mmHg) patients with chronic lung disease. The study is the most frequently referenced oxygen paper in the literature due to its noted impact on mortality and the phenomenal effect on clinical practice. Today, home LTOT is the standard of practice for chronic hypoxemia and its use is tied to shorter lengths of stay and reduced acute care readmission.(-3-) Although home LTOT was available and used for select patients throughout the late 1960s and 1970s, the real growth in home LTOT can be traced to the 1980s when the NOTT study started to influence clinical behavior and economic factors changed overall health care behavior. The growth of homecare and LTOT was seeded in the implementation of the Medicare prospective payment system (PPS) and its diagnosis related groups (DRG) methodology. In the fall of 1983, Medicare instituted the PPS/DRG payment model for acute care hospital stays. The DRG system, along with Medicare Part B coverage of home oxygen, helped to serve as catalyst for shorter lengths of stay and transition to home-based care. Since the mid 1980s, home LTOT has continued to experience significant growth in numbers and of course, associated

expenditures. It is the later that draws the most attention from legislators and critics and the reason home LTOT has been the focus of many Medicare budget initiatives for more than two decades. The exact number of home oxygen users is unknown. To date, there has not been an accurate way to capture all home LTOT patient information from Medicare, the state Medicaid programs and all private insurance providers. The best estimates suggest that at any given time there are approximately 1.8 million home LTOT patients in the United States. Data from the Centers for Medicare & Medicaid Services (CMS) suggest that nearly 1.5 million Medicare beneficiaries were prescribed home LTOT for some duration in 2005, with just shy of 1 million actively on home LTOT in any single month. Approximately 72% of all home LTOT users are prescribed both a stationary and portable system, suggesting the balance of oxygen users are either homebound (nonambulatory) or nocturnal-only patients.(-4-) Medicare home LTOT users average about 12 months of therapy with approximately 22% remaining on oxygen for more than 36 months.(-5-) Home oxygen utilization has been increasing modestly (about 9-11%) nearly every year. Some argue this is to be expected when consideration is given to the growing population of persons with COPD and early hospital discharge.

In 2005, Medicare payments for home oxygen totaled nearly $2.7 billion. Oxygen concentrators, the primary device used for stationary oxygen delivery in the home, represented $2.25 billion or about 83% of the total payments. As home oxygen expenditures grow, more attention is given to the cost. As Medicare continues to look for ways to reduce spending in the face of rising demand, home oxygen is regularly singled out as an easy target for cuts. It is important to note that while it is true that Medicare oxygen payments continue to grow with annual expenditures nearing $3 billion, as a component of overall COPD spending, this amount is relatively insignificant. The data fails to recognize the true cost/benefit of LTOT.

Like other areas of medicine, home oxygen technology has also benefited from the technology era. Gone are the days of heavy, steel cylinders and bulky liquid vessels. Some of the most innovative and significant advances in long-term home oxygen therapy have been introduced over the last five years, and more appear to be on the horizon. In response to the ever-changing demands of the home oxygen market, there is a focus on producing oxygen devices that deliver value and benefit to both home care providers and the oxygen patients they serve.

The technological advances in home oxygen systems have centered around two key areas oxygen technologies that drive operational efficiency for the home care provider; and oxygen technologies that promote patient independence and mobility, including ambulation and prolonged travel. The home oxygen paradigm began to shift with the introduction of a new class of home oxygen system, commonly referred to as Transfilling Oxygen Concentrator Systems. These novel devices, such as the HomeFill system, allow patients and/or their caregivers to safely and easily fill their own oxygen cylinders from a concentrator in their own homes. In many cases, the small, lightweight cylinders are used with an oxygen-conserving device, a technology that provides effective and efficient oxygen delivery while simultaneously extending the duration of use of the cylinder, thus encouraging patients to be active and ambulatory inside and outside of their home.

Another technology breakthrough is the Portable Oxygen Concentrator (POC). For many years both home oxygen providers and patients seeking convenience and efficiency have asked for an oxygen concentrator contained in a small, lightweight package that can be carried and taken out of the home. The future is now, and the portable oxygen concentrator (POC) is another evolution of modern home oxygen technology. The POC has been recognized by the Federal Aviation Administration (FAA) and is approved for patient use in commercial air travel. Today, the vast majority

of airlines now have policies governing the onboard use of these devices during take off, in flight, and landing.

There are now a number of POC systems on the market that range from about six pounds to 20 pounds. The POC market appears to have evolved and stratified into two groups POCs marketed primarily as portable/ambulatory/travel devices and POCs marketed as robust, single-source systems capable of serving as both a stationary and portable oxygen system. Common to all of the current POC devices are AC/DC/battery operation and integrated, multiple-setting pulse-dosed oxygen delivery. Home oxygen has been the target of numerous budget initiatives and cuts since the 1980s. The first major change in the LTOT payment methods occurred in 1985 when Congress mandated a modality neutral payment methodology, essentially establish ing a monthly DRG for LTOT in the home. The modality neutral payment model established two basic classes of home oxygen equipment (stationary and portable) and a fixed monthly payment amount, regardless of the type or quantity of equipment and supplies used. The payment was heavily weighted to the stationary system, with a modest addon fee to cover the portable equipment. In the same year, the oxygen Certificate of Medical Necessity (CMN) and laboratory evidence requirements (i.e., PaO2 55 mmHg) were also added to the rule.

Balanced Budget Act of 1997 (BBA). The BBA contained a number of Medicare payment cuts. As mandated in the BBA, Medicare oxygen payments were reduced by 30% over a two-year period (25% in 1998 and 5% in 1999). The BBA produced the single largest payment reduction in the short history of the coverage of home oxygen. In addition to the payment reductions, consumer price index (CPI) increases were frozen, preventing even modest fee increases in subsequent years. The BBA also called for the establishment of DME competitive bidding demonstration projects in at least two

different metropolitan statistical areas (MSA), which became Polk County, Florida and San Antonio, Texas.

Medicare Modernization Act of 2003 (MMA). The MMA introduced additional payment reductions of 12.4% for home oxygen and called for the use of wide-scale competitive bidding (CB) for home oxygen and other medical equipment. CB essentially reduces all health care products and services to commodities and awards regional contracts to the lowest bidder. Providers that are not accepted into the program by Medicare will be excluded from participating in the program. CB will impact patients, physicians and other health care providers because it will place very rigid limits on the Medicare providers in a given market. No longer will physicians or hospitals be able to refer patients to their preferred home oxygen or CPAP provider; instead they will be limited to the approved, contract providers. There is also the possibility that some providers will not be able to stay in business if blocked from participation in the Medicare program, as these closed contracts will remain in place for three years before re-bidding the contracts. Deficit Reduction Act of 2005 (DRA). While it was noted earlier that the BBA of 97 mandated the largest single cut to home oxygen payments, the DRA may prove to be even more significant due to a complete change in the oxygen payment methodology. Prior to the DRA, home oxygen was in a unique payment class, one which required that Medicare rent the home oxygen technology for as long as medically necessary. In this model, the title of the equipment always remained with the oxygen provider. The foundation of this payment method is recognition that the provision of home LTOT is less about equipment and more about the delivery of home oxygen therapy services. Unfortunately, much attention has been placed on the acquisition cost of specific devices, in particular the oxygen concentrator. As a result, the DRA has changed the oxygen class to capped rental, which for the purposes of Medicare is actually a rent to-own payment model. Effective January 1, 2006, Medicare will discontinue monthly payments to home oxygen therapy providers for all oxygen equipment still on rental

services after 36 months (the first patients will be impacted January 2009). Medicare payment will be discontinued regardless of the patients ongoing medical need and home oxygen providers required to transfer ownership of oxygen equipment to the beneficiary after the 36th month. Medicare will continue to make payments to the provider for delivery of oxygen contents to a beneficiary and for non-routine equipment maintenance.

http://www.executivehm.com/article/Current-Issues-in-Home-Long-Term-Oxygen-Therapy/