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New Legislation Addresses Payment Disparity for Rural Oxygen

Important News from American Association for Homecare


On Friday 9/04/20, Reps. Cathy McMorris Rodgers (R-Wash.) and Dave Loebsack (D-Iowa) introduced H.R. 8158, new legislation to address unsustainable reimbursement rates for stationary oxygen products, including oxygen concentrators, furnished in rural areas. Thanks to a decades-old budget neutrality “offset” for stationary oxygen equipment that CMS began applying to rural areas in 2017, rates for oxygen concentrators in some rural areas fell significantly below rates in competitive bidding areas or other bidding-derived rates.

While the payment disparity caused by this offset has been somewhat reduced by legislation and regulation temporarily applying a 50/50 blended rate to oxygen and other HME products in rural areas, these measures are set to expire on Jan. 1, 2021 or at the end of the COVID-19 Public Health Emergency (PHE), whichever is later.

H.R. 8158 would amend both the Social Security Act and the 1997 Balanced Budget Act to waive the budget neutrality offset for stationary oxygen products.  See complete bill text here.  

These provisions are also included in H.R. 2771, legislation that combines the budget neutrality fix with permanent relief for suppliers in rural and other non-bid areas. Since Congress had already provided relief to these areas through the duration of the PHE in COVID-19 legislation, the House Energy and Commerce Committee requested the new legislation be introduced to prepare the budget neutrality provision for committee consideration.

“This legislation provides a common-sense fix to an outdated policy and protects access to critical home oxygen products in rural areas,” said Tom Ryan, AAHomecare president & CEO. “Reps. McMorris Rodgers and Loebsack deserve great credit for working to give patients, caregivers, and clinicians peace of mind by providing a more stable operating environment for respiratory suppliers who serve small communities.”

“We still need a longer-term legislative or regulatory solution to secure sustainable reimbursement rates for the full range of HME products and services outside of competitive bidding areas,” added Ryan. “This legislation is a step on the right direction.”

H.R. 8158 is set to be considered by the Energy and Commerce Committee on Wednesday. Committee approval significantly improves prospects for the bill’s passage on its own or as part of a larger legislative package. AAHomecare will alert the HME community if grassroots support is needed on this legislation.

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