New Bill Aims to Fix Rural Oxygen Payment Disparity

H.R. 8158 would address the fact that rates for oxygen concentrators in some rural areas are significantly lower than rates in competitive bidding areas.

• By David Kopf
• Sep 10, 2020

Reps. Cathy McMorris Rodgers (R-Wash.) and Dave Loebsack (D-Iowa) have launched new legislation in the House that aims to increase reimbursement for stationary oxygen equipment in rural areas.

The new bill, 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. CMS began applying a budget neutrality offset for those devices in 2017, rates for oxygen concentrators dropped below rates for the same equipment in competitive bidding areas and non-rural, non-bid areas.

Recent legislation and regulation changes designed to help the healthcare industry response to the COVID-19 public health emergency (PHE) resulted in CMS temporarily applying a 50/50 blended rate to oxygen and other HME items in rural areas. However, these measures are set to expire on Jan. 1, 2021 or at the end of the PHE whichever comes later.

Eagle-eyed followers of HME-related legislation will note that another bill, H.R. 2771, contains the same provisions to waive the budget neutrality offsets. So why the new bill? Since Congress had already provided relief to rural areas during the PHE in other legislation, the House Energy and Commerce Committee asked lawmakers to introduce new legislation to prepare the budget neutrality provision for committee consideration.

To that end, the House Energy and Commerce Committee has reviewed and approved H.R. 8158. For now, while AAHomecare and other industry stakeholder groups are supporting H.R. 8158, the industry is focused on getting long-term relief for rural providers and non-bid areas.

“This legislation provides a common-sense fix to an outdated policy and protects access to critical home oxygen products in rural areas,” said Tom Ryan, the president and CEO of the American Association for Homecare. “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,” he added. “This legislation is a step on the right direction.”