Data Report: The Impact of Medicare's Home Oxygen Benefit Cuts

A report released by Avalere Health LCC shows that a new data analysis on the impending cuts to Medicare's home oxygen benefit are more severe than originally had been anticipated. The cuts to this program are to total around $710 million in 2009 and around $855 million in 2010.

The analysis was conducted by Avalere Health LLC and shows that the reductions in funding are the result of the changes that are brought about by the 2005 Deficit Reduction Act and the 2003 Medicare Modernization Act. These changes are going to effect more than a million Medicare recipients with chronic lung disease. These recipients are dependant on the Medicare home oxygen benefits for their health and independence.

Impacting Medicare beneficiaries is the 36 month cap on oxygen equipment rentals. As it had stood Medicare would pay monthly rental payments for the oxygen equipment on an on going basis. Now with the new implements being made to the Medicare oxygen benefits, Medicare will discontinue making payments for oxygen equipment after 36 months, despite a medical need for continuing oxygen use. The study shows that the first time this policy that was put into place in January 2006 will actually impact the Medicare oxygen program will be in January 2009.

Avalere Health's analysis shows that they are estimating that the 36 month capped rental policy is going to reduce Medicare expenditures for home oxygen by around $400 million to around $500 million per year, starting in 2009.

Millions of Americans are living with a chronic lung disease and with oxygen equipment they are able to live independently and with fewer hospital stays. The 36 month rental cap is going to change that way of living for these Medicare recipients that are dependant on their oxygen equipment.

The cost to Medicare for home oxygen is around $7.62 a day, with the cost of hospitalization totally around $4,600 a day. A recent government study had shown that patients with access to home oxygen equipment had fewer hospitalizations than people without home oxygen.

The analysis shows on chart the estimated number of Medicare beneficiaries that Medicare will end stationary oxygen equipment payments for. The chart shows a break down by state, with some alarmingly high numbers for Florida, Texas, California and Ohio. Florida being the state that will be hit the hardest with an estimated 19,700 people on home oxygen for whom Medicare will stop making payments for in 2009. Alaska and the District of Columbia are the two states that will have the least amount of people affected with an estimate of only 200 people per state for whom Medicare will stop payments for.

Sources:

www.avalerehealth.net/wmdocs/3309_AH_Longterm_V8.pdf