Orbit Medical Reacts to Cuts in Medicare's Home Oxygen Therapy

Beginning January 1, 2009, many changes will be made that are going to affect Orbit Medical's oxygen products due to the Medicare Improvements for Patients and Providers Act of 2008. The act limits the transfer of ownership of oxygen equipment to patients after the 36 month rental period. Under the new guidelines, the rental period will end after 36 months but rather than transferring ownership to the patient, the equipment will still be owned by the supplier. The supplier must continue to provide maintenance, supplies and services for the patient's oxygen equipment for no further payments. The supplier is required to pay for these services for an additional 2 years (five years total) as long as the oxygen is still medically necessary.

Another question that arose from the act was: What if a patient relocates, either short or long-term? CMS states that it is the responsibility of the original provider to continue providing service, or to find the patient a new provider. Finding a new supplier for patients who have reached their 36th month will prove to be difficult. The only income the new supplier would receive for the patient would come from their one time maintenance and servicing visit.

The supplier is also prohibited from switching oxygen systems during the 36 month period without cause. The only circumstances that would allow for this are:

• The patient's doctor orders the patient to change due to medical need
• The patient decides to switch systems or upgrades to newer technology.

In response to the changes, Kelly Albiston, VP of Orbit Medical said, "basically, CMS has told us for two years we need to provide service and support free regardless of where our patient goes. This obviously doesn't make business sense. CMS knows this, and has offered threats and fines as motivation to push it through. The end result is forcing our industry to make hard decisions between patient care and survivability of our business."