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Ankota: Home Care Next Generation Blog

CMS Moves to Protect Oxygen Delivery When Businesses Fail

CMS Moves to Protect Oxygen Patients When Their Oxygen Provider Goes Out of Business.

CMS announced on August 22nd that a new provider can replace oxygen equipment and restart a 36-month rental period when another provider exits the business. When this happens, the agency will consider the original equipment lost. The rule went into effect immediately on August 22, 2013 and provides new opportunities for successful providers that remain in business, while simultaneously protecting patients.

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What should providers do when a local provider goes out of business? Understandably, CMS distinguishes this from those situations when a provider is sold or merged with another provider. HME News reports that CMS has not yet released information on how to prove abandonment but oxygen providers should expect that will follow soon. Providers exiting the business are obligated to facilitate the transfer of their patients or they are in violation of statutory and regulatory requirements. In short, the ideal way to handle it is to work with the provider that is exiting the business to facilitate a smooth transition for your business and for the patients. There are no instructions on what to do if patients have simply been abandoned, but one would expect that to be the exception and not the rule. 

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According to Wintergreen Research, the market for portable oxygen concentrators alone will reach $1.9 billion by 2019, even though reimbursements are down 30% because of competitive bidding. That is an incredible growth rate for an industry that generated just $249 million in revenue in 2012 and just experienced 30% cuts in reimbursement rates.

“CMS is hearing that oxygen patients are being abandoned,” said Kim Brummett in HME News, senior director of regulatory affairs for AAHomecare. “You’ve just got people closing their doors.”

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Oxygen therapy is an integral component of the healthcare industry. The rapid adoption of oxygen therapy devices is attributed to the rise in incidences of respiratory diseases such as chronic obstructive pulmonary disease (COPD), asthma, and increased awareness and diagnoses of respiratory ailments. The number of people suffering from respiratory diseases is on the rise all over the world, primarily because of the increasing health hazards of chemical pesticides and cigarette smoking. As oxygen equipement continues to get cheaper because of innovation and lower prices, demand for oxygen therapy equipment and Resipratory Therapy services will only grow.

Dr. Hunter Young, a physician at Johns Hopkins focused on population health and Chief Medical Officer of Ankota, explains, "There is an increased awareness in the medical community and respiratory diseases are getting much more attention, and are being diagnosed at much higher rates. The demand for oxygen and respiratory care services will certainly grow for the forseeable future."

"We're seeing a real disruption in the business of respiratory care,' says Ankota CEO Will Hicklen. Competitive bidding is bludgeoning prices and only the most efficient providers will survive. "The economics of respiratory therapy has changed dramatically," adds Hicklen. Respiratory care companies make up one of Ankota's fastest growing segments simply because competitive bidding is forcing them to reduce operating expenses immediately in order to remain profitable. Fortunately, there is a lot of room for improvement. 

The best way to do this is through automation that eliminates paper, eliminates redundant data entry by integrating with existing order entry and inventory systems, supports mobile delivery confirmation and point of care documentation, plans routes efficiently, and synchronizes data seamlessly with billing systems.  Most providers stand to cut operating expenses dramatically by following this proven path. 

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