Medicare: Fix Payment Methodologies That Put Senior Care at Risk

Americans today are living longer, more active, healthier lives than ever before — accomplishments that we, as a society, celebrate. As President Donald Trump noted in a recent statement, we owe much of this progress to medical advancements that make it possible for older people to maintain their health and contribute to their communities, even into the later stages of life.

But these same medical advancements that allow independence in old age will suffer — as will the older Americans who depend on them — if policymakers continue implementing bad policies that contribute to higher overall costs, more hospitalizations, reduced access, and costly health care episodes.

For instance, the Center for Medicare and Medicaid Services recently implemented additional funding cuts to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies, including home respiratory therapy services, as part of its interpretation of the congressional requirement to extend the phase-in period of modifications to the Medicare fee schedule, as enacted in the 21st Century Cures legislation last year.

Put simply, rather than freezing the rate at the Jan. 1, 2016, blended amount — as Congress intended in passing 21st Century Cures — CMS has applied a no longer relevant budget neutrality factor to home oxygen that cuts rates so that they are lower in rural areas than they are in urban areas. In addition, CMS’ decided to apply the competitive bid rates that took effect July 1, 2016, to the blended rate that further cut the rates used in rural and non-urban areas across the country.

For the older Americans who depend on home respiratory care and equipment to remain active and independent, the impacts will be significant. Between 2008 and 2014, the Medicare population grew by 19 percent and the number of Medicare patients diagnosed with Chronic Obstructive Pulmonary Disease increased by almost 60 percent. COPD is the main indicator for prescribing home respiratory care, which allows patients to live at home, work and — importantly — avoid expensive emergency room visits and hospitalizations.

But if chronic cuts, under reimbursement, and failure to apply appropriate funding methodologies continue, rather than receive services at home, patients will certainly be forced to a hospital or other institutional settings — resulting in significantly higher costs to Medicare and counteracting the program’s current goals of improving value and reducing hospitalizations.

Data has reliably shown that home respiratory care reduces high-cost hospitalizations and readmissions. Failure by CMS to correct their payment methodology for home oxygen therapy and apply the law as passed by the Congress puts care providers, the Medicare program and senior beneficiaries at risk.

Older Americans, who continue to make outstanding contributions to our society, deserve the assurance of quality care services as they age.

Although Congress attempted to do so by allowing safeguards for important respiratory care via its 21st Century Cures legislation, CMS’s decision to further cut the rates when the Congress sought to provide relief is incredibly counterproductive, both for Medicare and the older Americans it serves.

The nation’s providers of quality respiratory care remain committed to caring for older Americans — helping them enjoy their independence, communities and health. We hope policymakers at CMS will work with us — as Congress sought to do — by reforming its policies and acting to preserve access to home respiratory care for the Americans who need it.


Dan Starck is the chairman of the Council for Quality Respiratory Care.

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