New Medicare payment rules are starting to strangle local small oxygen suppliers by forcing them to turn away business.

In the process, patients who live here part-time, travel, move or want to switch suppliers locally are left struggling to find new options for oxygen.

“This is going to dramatically affect patients’ lifestyles, how they move and their freedom,” said Mark Hassett, general manager of Stuart-based OxyPros Inc., which also has a Port St. Lucie office “Patients need to speak up.”

In the new rules for 2009, Medicare pays suppliers about $164 monthly for three years for patients renting respiratory equipment. In the following two years, suppliers continue providing oxygen and services, but only receive negligible reimbursement. After the fifth year, the payment cycle begins again and patients are entitled to new equipment.

Now, it’s become a losing proposition, suppliers said, to take a patient who has been on oxygen even for a year or two, because two years of providing essentially free oxygen and services follow.

And close to three full years is necessary to cover the costs of the impending two-year period with little reimbursement, said Kathie Rovella of Oxygen Plus in Vero Beach.

So suppliers are often forced to reject patients who are a few years into their oxygen use. Oxygen Plus has turned away 12-15 patients this year because of the new billing cycle, including two in the last week, Rovella said.

Because much of Florida’s population doesn’t live in the state year-round that can make it difficult because patients have to find a supplier in two locations. And patients a few years into the cycle who move are often left confused and without coverage.

Travel cane be even more difficult.

Patients either have to lug their equipment around with them, or search diligently for willing suppliers wherever they are going, Rovella said.

The rule is part of a large-scale effort to cut Medicare costs and eliminate fraud in the oxygen industry, which long lacked sufficient regulation, said Zane Morgan, a manufacturers representative for several Florida oxygen suppliers.

Dorothy McGrath is approaching four years using oxygen. She decided that carrying her 30-pound concentrator to Kentucky to see her daughter last month was unreasonable.

So McGrath, of Hobe Sound, rented from a local supplier, and was handed a $150 bill, which OxyPros luckily paid for her.

Because McGrath was in the middle of her third year, the Kentucky supplier wouldn’t accept her Medicare.

“You’re really bound to your house, and that’s not fair,” said McGrath, 63.

Patients like McGrath, who travel, move across the state, live seasonally up North, or look to move closer to family simply are getting turned away, Hassett said.

Meanwhile, the loss in customers and reimbursement could be debilitating for small suppliers in the long run.

Medicare reimbursement hardly accounts for labor costs, like providing 24/7 on-call services, and equipment set-up, maintenance and refills, which in reality are the prime expenses for suppliers, Hassett said.

OxyPros and Oxygen Plus have both added smaller health-care items to their inventories to help make up for profit losses. And OxyPros is in a hiring freeze, while Oxygen Plus staff members have taken pay cuts.

But neither company is confident small suppliers will be able to continue the same services without a large-scale change.

“Oxygen Plus is a mom-and-pop store,” Rovella said. “And trust me, we won’t be able to sustain this much longer.”

In the end, however, it’s the patients like those who come in for portable oxygen so they can move and be active who suffer — and who become confined to one area in an effort to be mobile.

“They’re not thinking about the person’s life,” McGrath said. “It’s important when you’re disabled to be near your friends and family.

“Everybody has to breathe.”

OXYGEN BREAKDOWN

In years one to three, suppliers receive an average of $200 per month – 80 percent from Medicare, and a 20 percent copay from the patient or secondary insurer – for renting, installing and maintaining rented oxygen equipment

In years four and five, Medicare offers minimal reimbursement to oxygen suppliers, who are required to continue offering the same equipment and services

After five years, the payment cycle restarts, and patients are entitled to new equipment

By Jonathan Mattise, TCPalm.com

Tags: beach, business, cuts, Florida, fraud, hand, housing, imported, insurance, mobile, North, search, travel

This entry was posted on Monday, July 6th, 2009 at 9:59 am and is filed under Treasure Coast business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.