‘No-man’s land’ for oxygen patients

When a local competitor closed its doors recently, provider Tyler Riddle had bad news for its capped-out oxygen patients: He couldn’t take them.

“I am not going to take capped patients regardless of how nice a guy I am,” said Riddle, vice president of Albany, Ga.-based MRS Homecare. “We give them a letter explaining that they are in this magical doughnut hole and there’s nothing we can do. They are just shocked.”

Under the oxygen cap—implemented in 2009—providers cannot bill for patients after 36 months, but they must still service them. Once patients hit 60 months, providers can supply a new oxygen concentrator and begin billing again.

“I am not going to take two years worth of loss before I can start billing again,” said Riddle, who did pick up patients that had a few months left in the rental period.

As to the capped-out patients?

“I told them to contact CMS or their local representative,” said Riddle.

As audits and competitive bidding force ever more providers to close their doors, this scenario is going to be replayed, says attorney Jeff Baird.

“We are seeing something of a reconfiguration of the industry where we are seeing a large shift of patients,” said Baird, chairman of the Health Care Group AT Brown & Fortunato. “”We are going to see a lot of inconvenience for patients as they are left in no-man’s land until they get picked up by somebody else, which they eventually will.”

Those patients are likely picked up by a provider looking to build scale or who have products they can cross-sell to offset the loss on oxygen, says Baird.

Interestingly, beneficiaries may fare better in competitive bidding areas (CBAs). That’s because contract suppliers are required to take patients, capped or not. The provider can bill for the remainder of the rental period or 10 months, whichever is greater, says Baird.

Provider Ron Evans, a contract supplier in the Phoenix CBA, says he started getting calls about capped oxygen patients before Round 2 even started.

“If you can get all the documentation, you can’t turn them away,” said Evans, owner of Valley Respiratory Services. “But we couldn’t transition a patient that was already capped until July 1 or we wouldn’t have even gotten the 10 months.”

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