The cost of maintaining accreditation, surety bonds and licensed Respiratory Therapists, combined with cuts in reimbursements and caps in monthly payments have finally caught up with oxygen providers. According to Medicare's website, in Los Angeles County, CA there are only 120 oxygen providers remaining, compared to the 258 which existed in April 2008. During the same time, Miami-Dade County, FL oxygen providers dropped from 401 to 205.

Other areas showed an even larger drop in Medicare providers. Brown County, Ohio, a 495 square mile area with 16 townships had a 75% reduction in oxygen providers. Last year they had 8 oxygen providers, now they only have 2. Riverside County had a 56% drop in oxygen providers, the largest in Southern California. Last year there were 48 oxygen providers and today only 21 providers are left to cover the 7,200 square mile area.

A steady decline
AMEPA has watched a steady decline in providers, which began in April, four months after the implementation of the 9.5% cut in reimbursement to delay the flawed DMEPOS bidding program. The 36 month cap in monthly oxygen payments also began in January, 2009. Owners of licensed oxygen companies, which recently closed, noted that the requirement to continue to provide monthly service and supplies, upgrade equipment and cover all oxygen needs when a patient travels out of the area, without additional reimbursement from Medicare compounded the inability to stay in business. In early September, AMEPA reported a 30% drop of Oxygen Providers in Miami-Dade County, since last year. The January reimbursement cuts and 36 month cap were already taking affect, but the October 2009 Medicare requirements of mandatory accreditation and minimum $50,000 surety bond is credited for causing another large drop in providers.
"We have been warning legislators about this for the last 9 months" said Roger Ribas, President of the Florida Alliance of Home Care Services (FAHCS). "The costs of the new quality assurance measures combined with the 2009 payment restrictions, make it nearly impossible for licensed oxygen suppliers to provide quality equipment and timely services to patients. The elderly and those with respiratory ailments are the ones who are going to suffer, after their oxygen providers go out of business. The remaining oxygen providers cannot afford, and are not required to take on the obligations of servicing someone else's oxygen patient, for free, after the patient has had an oxygen system beyond 36 months."

Rural Areas Affected
Large metropolitan areas were not the only ones to lose oxygen providers. The rural counties of Leavenworth, KS and Hunt, TX have both seen a 50% drop in providers. Both counties previously had 10 providers, now only 5 remain in each county.
"It becomes a safety issue when a community relies on only 5 oxygen providers to service an area nearly 900 square miles in size", said Barry Johnson, CRT, President of the Texas Alliance of Home Care Services (TAHCS) "There is only one major highway and one small medical center in Hunt. With the limited number of providers, Medicare beneficiaries' access to care would be severely impacted when tornadoes, ice storms or power outages occur. It would create a life threatening situation for many patients who require life sustaining oxygen."

Bubble Bursting in the DME Industry
It is hard to believe that even though half of the oxygen providers are out of the Medicare program in these areas, the DMEPOS bidding program will still move forward. The program's goals of limiting providers and reducing reimbursement have clearly been achieved. Legislators must be asked the question:
"Can Medicare suppliers take more unrealistic cuts proposed by the same flawed bidding program, when so many businesses are struggling to stay open to provide patient care at home?"
In the last year we have seen the bubble burst in the housing and banking industries. The 26 supplier standards, ongoing physician documentation, accreditation, liability insurance requirements, billing requirements, credentialed employees and proper care and maintenance of a Medicare patient is an expensive proposition for any licensed and bonded provider. The removal of such a significant portion of oxygen providers from the Medicare program should be evidence enough that there is more to providing for Medicare patients than the manufacturers cost of a piece of home medical equipment. When the bubble bursts in the home medical equipment industry, it will be up to the doctors and hospitals to care for the oxygen needs of seniors and the disabled, at a much greater cost to Medicare than the current DMEPOS system.
Click to review reduction of providers

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