CQRC Welcomes New Rule Released by the Centers for Medicare & Medicaid Services

Washington, DC, May 10, 2018 --(PR.com)-- Yesterday, the Council on Quality Respiratory Care welcomed the release of the Interim Final Rule with Comment Period (IFR) by the Centers for Medicare & Medicaid Services (CMS). The IFR represents a significant, first step forward in addressing the concerns of home oxygen providers as they work to ensure that older Americans in rural areas can continue to access the durable medical equipment and services they need.

“We applaud CMS for taking our concerns seriously and extending a short-term lifeline to home oxygen suppliers,” said Dan Starck, Chairman of the CQRC. “The IFR in the short-term will help relieve providers of the tremendous burdens they have faced in noncompetitive, rural areas over the last several years. We are disappointed that the Administration did not also provide temporary assistance to address the same problems in the noncompetitive, nonrural areas that are also subject to the flawed modified fee schedule. Moving forward, we welcome the opportunity to work with CMS to further optimize longer-term regulatory changes so that all Americans who require oxygen can continue to receive it without disruption.”

Since 2016, CMS has lowered reimbursement rates for durable medical equipment, including oxygen, in non-competitive bidding areas (CBAs). The reimbursement rates in non-CBAs––which tend to have smaller, more dispersed populations and higher fixed costs––have been set using the urban competitive bidding rates. Counterintuitively, this policy along with an outdated budget neutrality policy has led to the rates for oxygen concentrators being lower in the rural and nonrural non-CBA than they are in CBAs. Because of these inadequate rates, many suppliers have not been able to cover the full costs of service. As a result, some providers have been forced to shut down operations, leaving patients with limited options when seeking a care provider.

The IFR would help address this situation by extending the blended rate of 50 percent of the amount based on the competitive bid rates and 50 percent of the traditional fee schedule between July 1 and December 31 in rural and non-contiguous areas (e.g. Alaska, Hawaii, and U.S. territories). CMS has also proposed consideration of competitive bidding reform, as was announced in the Final Spring 2018 Unified agenda.

Despite the steps forward, the CQRC is concerned that the IFR does not extend to nonrural, non-CBAs, which will still face the burden of not being adequately reimbursed. Moreover, the rule does not propose a long-term fix to eliminate the budget-neutral requirement, which contributes to inadequate reimbursement rates, now that the fee schedule is based off of competitive bidding rates.

However, the IFR does validate that stakeholders’ concerns about inadequate payment rates and indicates that CMS is continuing to review the rates for 2019.

“Though the rule is not perfect, we welcome the opportunity to provide feedback for the next round of rulemaking for 2019 and reforming the competitive bidding program. We look forward to working with CMS to implement long-term sustainable fixes that will safeguard access to oxygen for all Americans, in rural and non-rural areas,” said Starck.

About the Council for Quality Respiratory Care

The CQRC is a coalition of the nation’s seven leading home oxygen therapy provider and manufacturing companies. To learn more, visit cqrc.org and follow CQRC on Twitter at @TheCQRC.