On February 6, 2006, President Bush announced his Administration's FY 07 budget proposal, including a Medicare proposal that would reduce Medicare spending over the next five years by $36 billion. President Bush's proposed Medicare package includes $7 billion in proposed cuts for durable medical equipment (DME). The proposal would limit Medicare rental payments for home oxygen therapy to 13 months. Almost 20 percent of the Medicare cuts would come from a benefit that accounts for approximately two percent of Medicare program expenditures.

"The Administration's budget proposal to cut Medicare payments for home oxygen therapy would dramatically erode the quality of care for beneficiaries who rely upon home oxygen therapy. Home oxygen therapy sustains life for the approximately one million seniors who rely upon the therapy," said A. Malachi Mixon, III, chairman and chief executive officer at Invacare.

Beneficiaries Will Suffer
The Administration's FY 07 budget proposal for Medicare payment for home oxygen therapy builds off a controversial provision Congress recently included in the Deficit Reduction Act of 2005 (DRA). The DRA provision limits rental payments for home oxygen therapy to 36 months, and forces the beneficiary to own the oxygen equipment from that point forward. How beneficiaries receive ongoing care, maintenance, service and repair services beyond 36 months is unclear. Congress included this DRA provision at the last minute, after the House and Senate had passed versions of the bill without this provision, and without any study, hearings, or consultation with affected parties. The Administration's FY 07 budget proposal would limit monthly payments for home oxygen therapy to 13 months, further jeopardizing beneficiary access to quality care and services.

This proposal will sharply limit the Medicare home oxygen therapy benefit after 13 months. Virtually every beneficiary requiring home oxygen to sustain life will suffer dramatic benefit reduction because Medicare beneficiaries are on home oxygen therapy for an average of 26 months. Once ownership of the equipment transfers to the beneficiary, the home oxygen provider will no longer have a relationship with the beneficiary. The beneficiary will then be responsible for obtaining necessary services to ensure the equipment continues to operate/function properly, that the oxygen purity levels are appropriate, that regular maintenance is performed, and that the beneficiary has the necessary accessories/supplies such as cannulas and tubing.

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