It appears CMS has finally realized that you can’t get blood from a stone—or oxygen equipment and services from an HME provider that has gone out of business.
CMS announced on Aug. 22 that, effective immediately, a new provider can replace oxygen equipment and restart a 36-month rental period when another provider exits the business. The agency will consider the original equipment lost.
“CMS is hearing that oxygen patients are being abandoned,” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “You’ve just got people closing their doors.”
Under a cap that went into effect in 2009, providers cannot bill for patients after 36 months but they must still service them. Once the patient hits 60 months, providers can supply new equipment and start billing again.
The problem with that: A perfect storm of audits and competitive bidding has drastically reduced the number of providers willing and able to service oxygen patients, creating significant access issues, stakeholders say.
“Nobody wants them anymore,” said Brummett.
CMS has not yet released information on how to prove abandonment, but stakeholders expect that will come soon. The agency also stated that providers exiting the business must facilitate the transfer of their patients or they are in violation of statutory and regulatory requirements.
The new rental period likely does not apply, however, in cases where a provider sells its business to another provider, says healthcare attorney Lisa Smith.
“CMS is going to expect the seller and the buyer to negotiate and value that oxygen business, including all of the patients regardless of where they are in the cap period, and come to a fair assessment of the value,” said Smith, an attorney with Brown & Fortunato.
Smith cautions providers to perform due diligence before picking up abandoned patients. Providers need to make sure the patient isn’t part of a company that has been sold or isn’t just looking for another supplier, she said.
One provider that will be picking up patients: Tyler Riddle. Earlier this summer, Riddle had to turn away about 50 oxygen patients when a local competitor was driven into bankruptcy by audits.
“We are now looking at converting those patients,” said Riddle, vice president of Albany, Ga.-based MRS Homecare. “We are really excited—that’s a big boost.”