Changes in Medicare oxygen-supplier rules drive some providers to close

Starting January 1, new Medicare rules intended to cut waste and fraud in payments to medical equipment suppliers go into effect. When faced with these rules--along with another kicking off last month which requires them to be accredited and post a surety bond--the expected cut in reimbursement is driving some home-oxygen companies out of business and leaving some patients hanging.

The new rules allow Medicare to pay suppliers at the existing rate for the first three years after patients begin using their services. Medicare pays 80 percent of charges, and patient 20 percent, usually contributing a total of about $200 per month.

But after that, providers will get far less; nonetheless, they'll be required to keep providing services for two more years. The move should save CMS about $220 million in the fiscal year that began in October, the Wall Street Journal reports.

Suppliers, for their part, say that the new calculations don't address the actual costs of providing services, and are beginning to turn away patients who are already reaching their three-year limit. Meanwhile, small providers say that they're struggling to pay the cost of getting accredited, which can be $2,500 to $3,500 at minimum or mount up to tens of thousands of dollars.

To learn more about this situation:
- read this Wall Street Journal piece (sub. req.)

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