In addition, today beneficiaries typically have ongoing access to respiratory therapist to monitor their condition. It is unclear how seniors will obtain necessary RT services once equipment ownership passes to the consumer. Most important, in the event of an electrical outage, it is unclear how beneficiaries will obtain back up compressed oxygen tanks to use when there is no electricity to power the oxygen concentrator. Many beneficiaries will end up in hospital emergency rooms, or being admitted to a hospital where the daily cost exceeds $3600. In contrast, an entire year of home oxygen therapy can be provided for about $2784.

The President's Proposal is Based on Erroneous Assumptions


Medicare and its beneficiaries are not paying for oxygen equipment; they are paying for home oxygen therapy, 24 hours per day, 7 days per week, 365 days per year. Oxygen is a Federal legend drug and the devices dispense a prescription drug - oxygen. The oxygen technologies used to produce and/or deliver the drug are only technical components associated with the overall provision home oxygen therapy. Focusing attention on the relationship between the overall cost of providing this therapy and the cost of a single component of its provision is a complete misunderstanding of how beneficiaries on home oxygen therapy receive care. The unplanned effect will transfer the burden of maintenance and repair of sophisticated oxygen technologies to the patients (beneficiaries) or caregivers and, therefore, the total management of their home oxygen therapy regimen. This will clearly produce the undesired effect of unmonitored and regulated dispensing and distribution of a prescription drug. This presents a serious risk to patient safety and care and will undoubtedly result in higher costs to the patient and the system.

Home Oxygen Therapy is Cost Effective and Clinically Efficacious

The average annualized cost for home oxygen under the current payment model is $2,784. In 2002, there were 673,000 people hospitalized for COPD - their average length of stay was 5.2 days. The average Medicare cost for one day in the hospital is $3,606, the average admission for COPD costs over $18,000.

"Home oxygen therapy is the most cost effective and clinical efficacious treatment available to those with COPD and low blood oxygen and can be provided to a patient for one year at less than the average cost for one day in the hospital. Oxygen is the only treatment or drug scientifically proven to extend the life of patients with chronic lung disease. Oxygen therapy also reduces the frequency of hospitalization," said Mixon.

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