Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Respiratory Assist Devices 
With Back-up Rate 
JUNE 2001 
OEI-07-99-00440  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the health 
and welfare of beneficiaries served by them. This statutory mission is carried out through a nationwide 
program of audits, investigations, inspections, sanctions, and fraud alerts. The Inspector General 
informs the Secretary of program and management problems and recommends legislative, regulatory, 
and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of Inspector 
General. It conducts short-term management and program evaluations (called inspections) that focus 
on issues of concern to the Department, the Congress, and the public.  The inspection reports provide 
findings and recommendations on the efficiency, vulnerability, and effectiveness of departmental 
programs. 
OEI's Chicago regional office prepared this report under the direction of William Moran, Regional 
Inspector General and Natalie Coen, Deputy Regional Inspector General. Principal OEI staff included: 
REGION  HEADQUARTERS 
Tim Dold, Project Leader
 Alan Levine, Program Specialist 
Ann Maxwell, Lead Analyst
 Stuart Wright, Director, Medicare and 
Ianna Kachoris, Program Analyst
 Medicaid 
Linda Paddock, Program Analyst
 Brian Ritchie, Director, Technical Support 
Michael Barrett, Program Analyst
 Staff 
Elander Phillips, Program Assistant
 Barbara Tedesco, Mathematical Statistician 
Margarita Rodriguez, Program Assistant
 Scott Horning, Program Analyst 
Erin Bliss, Intern

To obtain copies of this report, please call the Chicago Regional Office at (312) 353-4124. 
Reports are also available on the World Wide Web at our home page address: 
http://www.hhs.gov/oig/oei  E X E C U T I V E   S U M M A  R Y  
PURPOSE 
To determine if the bi-level respiratory assist device with a back-up rate receives frequent and 
substantial servicing. 
BACKGROUND 
The Omnibus Reconciliation Act of 1993 (OBRA 1993) amended the Social Security Act to 
exclude ventilators that are either continuous airway pressure devices or intermittent assist 
devices with continuous airway pressure devices from the frequent and substantial servicing 
payment category. The Health Care Financing Administration (HCFA) has proposed that the 
bi-level respiratory assist device with a back-up rate be reassigned to the capped rental 
category in accordance with the exclusion implemented by OBRA 1993, but has not yet 
completed action on this proposal. 
Under the frequent and substantial payment category, suppliers are paid an established monthly 
rental fee as long as the device is medically necessary. Under the capped rental payment 
category, suppliers are paid a monthly rental fee for a stipulated amount of time at which point 
either Medicare purchases the machine on behalf of the beneficiary or the beneficiary continues 
to rent the device on their own. The impact of reclassifying the device would be to reduce 
Medicare reimbursement for the use of this device. 
In order to help determine the appropriate category of DME reimbursement for bi-level 
respiratory assist devices with a backup rate, the Office of Inspector General conducted a 
study to determine whether such devices receive frequent and substantial servicing. In order to 
do this, we selected a stratified random sample from all Medicare claims for this device billed 
during September 1999.  Our final sample consisted of 206 beneficiaries served by 182 
suppliers for a response rate of 74 percent. 
FINDINGS 
Supplier services consist primarily of routine maintenance and patient monitoring 
Manufacturers, suppliers, and beneficiaries all report that the services provided to beneficiaries 
by suppliers consist of routine maintenance, mainly of the equipments accessories, and 
monitoring the patients interface with the machine. None of the suppliers or manufacturers 
indicated internal servicing as part of the regular servicing protocol. 
i 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  For most beneficiaries, visits do not meet supplier protocols for frequency 
Supplier records reveal and beneficiary survey respondents report that supplier visits do not 
reflect the frequency stipulated by supplier protocols.  Supplier records also indicate that visits 
are not made on a consistent basis.  For example, the number of days between beneficiaries 
first and second visits ranges from 1 to 468 days.  Although beneficiaries are not receiving 
consistent visits suppliers continue to receive monthly rental payments intended to cover 
frequent and substantial servicing. 
Contrary to supplier protocols, the number of beneficiaries receiving visits 
declines over time 
Supplier records indicate that the number of beneficiaries receiving visits decreases over time. 

While a decrease in the number of visits per beneficiary is expected based on supplier

protocols, a decrease in the number of beneficiaries receiving services is not. Eighty-five

percent of beneficiaries received a visit in the first quarter after they started using the machine. 

The number of beneficiaries receiving a visit within the second quarter drops to 59 percent. In

fact, almost half of the beneficiaries received their last visit from the supplier within 6 months of

receiving their machine. Eight percent of beneficiaries never received a single visit. 

Covering the respiratory assist device under capped rental would have saved 
Medicare $11.5 million annually 
Between January 1996 and September 1999, the Medicare program allowed $160 million for 
bi-level respiratory assist devices with a back-up rate. Under capped rental Medicare would 
have allowed $117 million for this same time period. This yields a potential savings of $43 
million or $11.5 million per year. 
RECOMMENDATIONS 
HCFA should move the bi-level respiratory assist device with a back-up rate from 
the frequent and substantial servicing to the capped rental payment category 
The HCFAs intention to move the bi-level respiratory assist device with back-up rate from the

frequent and substantial payment category to the capped rental payment category appears

justified. Beyond capturing savings, our findings indicate that the bi-level respiratory assist

device with back-up rate primarily requires routine maintenance and patient monitoring. 

Further, this level of servicing is not performed frequently nor consistently, often stopping after a

short period of time.

Given that the delivery of follow-up services is most intense early on, while the beneficiary

adjusts to using and caring for the new equipment, a significant portion of follow-up services

would be covered by the monthly payments allowed under the capped 

ii 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  rental payment methodology.  These rental payments continue for at least a year after the 
beneficiary receives the machine. 
AGENCY COMMENTS 
The HCFA concurred with our recommendation, stating that they plan to move the bi-level 
respiratory assist device with a back-up rate from the frequent and substantial servicing 
payment category to the capped rental payment category. They believe this change is needed 
to accurately reflect the requirements of Section 1834(a)(3) of the Social Security Act. 
iii 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION .............................................................1

FINDINGS

Supplier services are routine maintenance and patient monitoring .................. 9

Supplier visits do not reflect protocols for frequency  ...........................11

Number of beneficiaries receiving visits declines .............................  14

Capped rental would save Medicare $11.5 million annually ...................... 16

RECOMMENDATIONS  ...................................................... 19

AGENCY COMMENTS  ...................................................... 20

APPENDICES

A: Sampling ...........................................................21

B: Confidence Intervals ..................................................23

C: Results of Hypothesis Testing ........................................... 25

D: Non-response Analysis ................................................27

E: Agency Comments  ...................................................28

F: Related Office of Inspector General Reports ................................ 29

iv 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  I N T R O D U C T I O N  
PURPOSE 
To determine if the bi-level respiratory assist device with a back-up rate receives frequent and 
substantial servicing. 
BACKGROUND 
Part B of the Medicare program pays for the rental or purchase of durable medical equipment 
(DME) used in the patients home when deemed medically necessary by a physician. 
Payments for this equipment are made by Durable Medical Equipment Regional Carriers 
(DMERCs) based on the following six payment categories: 
<  Inexpensive or other routinely purchased equipment,

<  Items requiring frequent and substantial servicing, 

<  Customized items,

<  DME supplies, 

<  Oxygen and oxygen equipment, and

<  Capped rental items.

In order to help determine the appropriate category of DME reimbursement for bi-level 
respiratory assist devices with a backup rate, the Office of Inspector General (OIG) conducted 
a study to determine whether such devices receive frequent and substantial servicing. 
Noninvasive Positive Pressure Respiratory Assistance 
Noninvasive positive pressure respiratory assistance (NPPRA) is the administration of 
continuous positive air pressure to a patient using a nasal and/or oral mask. Avoiding the use of 
a more invasive airway access such as a tracheostomy, NPPRA devices are designed to be 
used on an intermittent basis (i.e. for only part of the day, usually during the hours of sleep). 
Such devices are non-life supporting and are to be distinguished from invasive ventilation 
administered via an intubated airway in a patient for whom disruption or failure of ventilatory 
support would lead to the imminent demise of the patient.1 
1  Region A DMERC Supplier Manual (Rev. 10, 6/99) Chapter 14.30-2 
1 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440 Medicare covers three types of respiratory assist devices that provide noninvasive positive 
pressure respiratory assistance therapy: 
1.	 A Continuous Positive Airway Pressure (CPAP) Device (HCPC E0601) provides a 
single level of continuous positive airway pressure. 
2.	 A Bi-Level Positive Airway Pressure Device without a back-up rate (HCPC K05322) 
delivers adjustable, variable levels of positive air pressure to assist spontaneous 
respiratory efforts and supplement the volume of air a patient inspires into the lungs. 
3.	 A Bi-Level Positive Airway Pressure Device with a back-up rate 
(HCPCS  K05333) also delivers adjustable, variable levels of positive air pressure to 
assist spontaneous respiratory efforts and supplement the volume of air a patient 
inspires. In addition to the automated delivery of bi-level air pressure, this device also 
has a time back-up feature to detect when a patient has stopped or delayed breathing. 
Whenever sufficient spontaneous inspiratory efforts fail to occur the back-up feature 
ensures that the appropriate amount of air is provided.4 
The Health Care Financing Administration (HCFA) medical policy regarding these three types 
of respiratory assist devices became effective October 1, 1999. The policy contains coverage 
criteria and payment rules, including four therapeutic classifications for which NPPRA is 
medically indicated and a stipulation that the patient must use the machine at least 4 hours out of 
every 24 hours to be eligible for Medicare coverage. To assure that the requirements are being 
met, the prescribing physician must re-certify medical necessity and the beneficiary must certify 
appropriate levels of usage between 30 to 45 days after receiving the device. 
The four therapeutic classifications are: (1) restrictive thoracic disorders, (2) severe chronic 
obstructive pulmonary disease (COPD), (3) central sleep apnea, and (4) obstructive sleep 
apnea. Before a bi-level respiratory assist device with back-up rate can be prescribed for any 
of these conditions, therapy using a CPAP or a bi-level respiratory assist device without a 
back-up rate must be attempted. 
Even though these devices are covered under the same medical policy, they are covered under 
different reimbursement methodologies. Medicare covers the bi-level respiratory assist device 
with a back-up rate under the items requiring frequent and substantial servicing DME 
payment category, whereas the CPAP and bi-level respiratory assist device without back-up 
rate are covered under the capped rental items category. 
2  Prior to October 1, 1999, the HCPCS code was E0452. 
3  Prior to October 1,1999 the HCPCS code was E0453 
4  Region A DMERC Supplier Manual (Rev. 10, 6/99) Chapter 14.30-2 
2 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  Frequent and Substantial Servicing Payment Category

Items in this category are defined by the Social Security Act to require frequent and substantial 
servicing to avoid risk to the patients health.5  There are no definitions, within the law or 
HCFA publications, for frequent or substantial servicing of DME items in this category, nor 
is risk to the patients health defined.  An indication of Congressional intent regarding items 
requiring frequent and substantial servicing exists in House Report 101-391 (I), accompanying 
the Omnibus Budget Reconciliation Act of 1987. It states that this class of items would 
include those that are technologically sophisticated and require frequent monitoring or 
adjustment in order to make sure that they are functioning properly or being properly utilized by 
the patient. 
Payment for equipment under this classification is made on a monthly rental fee schedule 
computed as set forth in Section 1834(a)(3) of the Social Security Act. Payment continues as 
long as the equipment is medically necessary.  Maintenance to the equipment and any 
accessories to the equipment are considered to be covered under the monthly rental fee. It is 
the suppliers responsibility to assure that an appropriate level of servicing is provided by 
appropriately trained personnel. 
There are currently eight items in the frequent and substantial servicing category, including 
volume ventilators, negative pressure ventilators, ultrasonic nebulizers, intermittent positive 
pressure breathing (IPPB) machines of all types, infusion pumps for uninterrupted administration 
of epoprostenol, and bi-level respiratory assist device with a back-up rate. 
Under the frequent and substantial payment category, the Medicare reimbursement for the bi
level respiratory assist device with a back-up rate has shown a continuous increase since 
19966. In 1996, Medicare allowed $34 million for bi-level respiratory assist devices with a 
back-up rate. Our estimate of total allowed amount for 2000 is $147 million. This represents 
more than a 300 percent increase over 5 years. 
Capped Rental Payment Category

Payment for capped rental items, as established in the Social Security Act, is made on a 
monthly fee schedule.7  This fee schedule is equal to 10 percent of the purchase price for the 
first 3 months and 7.5 percent of the purchase price for each remaining month.8  In addition to 
the monthly capped rental fee, Medicare will pay for accessories to the CPAP and bi-level 
respiratory assist device without a back-up rate, such as a nasal application 
5  Section 1834(a)(3)

6  Our review of Medicare reimbursements for this device only went back to 1996. 

7  Section 1834(a)(7)

8  The purchase price is based on a national limited payment amount.

3 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  device, headgear, chin strap, tubing, and filters. During the 10th month of continuous rental, the 
supplier must offer a purchase option to beneficiaries who then have 1 month to make their 
decision. 
If the beneficiary opts not to purchase the equipment, monthly rental payments continue through 
the 15th month.  After 15 months, the supplier must continue to provide the item to the 
beneficiary without charge to Medicare. The Durable Medical Equipment Regional Carriers 
will reimburse the supplier a maintenance and servicing payment computed as the lower of a 
reasonable and necessary maintenance fee established by the Secretary or 10 percent of the 
total purchase price for that item. This fee is payable every 6 months, whether servicing is 
provided or not, beginning 6 months after the 15th rental month. 
If the beneficiary accepts the purchase option, Medicare rental payments end after 13 months, 
and the supplier must transfer the title of the item to the beneficiary. For items that are 
purchased, payment for maintenance and servicing are made when repairs are necessary to 
make the equipment serviceable.9  This payment is made on the basis of reasonable charges 
in the locality for maintenance and servicing.10 
Reclassification of Respiratory Assist Devices

The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) amended the Social Security 
Act to exclude certain DME items from the frequent and substantial servicing payment 
category.  While IPPB machines and ventilators remained in this category, ventilators that are 
either continuous airway pressure devices or intermittent assist devices with continuous airway 
pressure devices were excluded from the frequent and substantial servicing payment 
category.11  As a result, HCFA reclassified both the CPAP and the bi-level respiratory assist 
device without a back-up rate in the capped rental payment category.  However, the bi-level 
respiratory assist device with a back-up rate continues to be reimbursed using the frequent and 
substantial servicing payment methodology. 
The HCFA has proposed that the bi-level respiratory assist device with a back-up rate be 
reassigned to the capped rental category in accordance with the exclusion under Section 
1834(a)(3) of the Social Security Act.  The HCFA maintains that this type of device was 
inappropriately classified as an item requiring frequent and substantial servicing. Apparent 
concerns regarding the impact the exclusion of this item might have on beneficiaries have 
prompted certain members of Congress to request that HCFA examine 
9  HCFA DME Carrier Manual 
10  Social Security Act, Section 1834(a)(7) 
11  Public Law 103-66, Subpart D Sec. 13543 
4 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  the accuracy of the payment category and, in the interim, maintain the current reimbursement 
methodology for this device. 
On June 25, 1999, HCFA sponsored a Public Town Hall Meeting to discuss the exclusion and 
implications of moving the device to capped rental.  At this meeting, industry representatives 
argued that changing the payment category of this device would significantly reduce the 
frequency of contact between the provider and the patient and that such a reduction would 
compromise the quality of care and clinical benefit that patients receive from noninvasive 
positive pressure respiratory assistance therapy.  They argued that the capped rental payment 
category does not adequately cover the patients home-care needs for frequent and substantial 
servicing of equipment and the routine in-home patient care needed for successful therapy.12 
Further, some physicians expressed that the successful implementation of noninvasive ventilation 
requires close monitoring by a respiratory therapist and that reimbursement under the capped 
rental category will not allow vendors to provide such necessary care. 
HCFA Coverage of Other Services

Reimbursement for maintenance and servicing of a rented item is considered to be part of the 
rental fee. This is true regardless of DME payment category. Suppliers are allowed to charge 
a separate maintenance and servicing payment under capped rental, only after the item is 
purchased or the rental period ends but usage continues. 
The HCFA defines routine periodic servicing as testing, cleaning, regulating and checking of 
the beneficiarys equipment which is not [separately] covered.13  The HCFA explains that such 
routine maintenance should be the responsibility of the owner of the equipment, rather than by 
a retailer or some other person who charges the beneficiary, and included in the rental fee. 
Normally purchasers of DME are given operating manuals which describe the type of servicing 
an owner may perform to properly maintain the equipment. Hiring a third party to do such 
work for the convenience of the beneficiary is not covered. 
12  Comments from the Public Town Hall Meeting on medicare Payments for RADs, June 25, 1999 
13  DMERC Carriers Manual, Part 3, Chapter II: Coverage and Limitation, Section 2100.4-B. 
5 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  METHODOLOGY

Sample Selection

Using the Medicare Part B National Claims History data, we selected a stratified random 
sample of 300 Medicare claims (corresponding to 300 beneficiaries) for this device billed to 
Medicare during September 1999. The sample was categorized into two strata. 
<  Stratum 1: beneficiaries only using the bi-level respiratory assist device with a back-up 
rate = 150 claims 
<  Stratum 2: beneficiaries using the bi-level respiratory assist device with a back-up rate 
and oxygen = 150 claims 
The two strata were developed to determine if servicing of the equipment and patient 
monitoring varied between beneficiaries who use only a respiratory assist device and those who 
use both the device and oxygen. 
We excluded 21 suppliers from our sample as advised by the Office of Investigations, reducing 
our sample to 279 beneficiaries who received services from 229 suppliers. 
Data Collection

We collected data from various sources including Medicare beneficiaries, DME suppliers, 
DME manufacturers, and national organizations. Data collection occurred from May to June 
of 2000. 
Supplier Surveys.  We mailed surveys to the suppliers that provided respiratory assist devices 
to the beneficiaries in our sample. This survey requested information regarding the frequency 
with which they visited beneficiaries and the type of service they provided. We requested that 
suppliers supplement the survey by providing copies of their protocols for equipment servicing 
and beneficiary monitoring. 
To accurately determine the frequency of supplier visits, we requested suppliers provide 
documentation of all beneficiary contact from January 1999 to the time they received our 
survey (roughly May 2000).  We logged the dates of each contact and whether it was a home 
visit or performed over the phone. Since it was often not possible to determine the actual 
services provided during the visits, we were unable to capture the type of service provided 
during supplier visits from this data source. 
Data regarding visits to beneficiaries was linked to the corresponding beneficiaries in our 
sample. Accordingly, all of the information regarding the frequency of actual supplier visits can 
be projected to the population. Similarly, the information contained in supplier protocols 
outlining the expected frequency of visits was linked to the appropriate beneficiaries.  The 
estimates regarding expected patterns of visits have also been  projected to the universe. 
6 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  However, we did not attempt to generalize, to the population of suppliers, data in the supplier 
survey that was specifically about suppliers. This supplier specific data was not projected since 
suppliers were not randomly selected, but rather contacted on the basis of their connection to 
the sampled beneficiaries.  In the report, we reference the sample whenever our estimates 
pertain only to our sample. 
Beneficiary Surveys. We completed telephone surveys with 235 of the sampled beneficiaries 
for an initial response rate of 84 percent.  In most cases, we spoke with the sampled beneficiary 
directly; however, in some situations we spoke with the beneficiarys spouse, family member, 
or caretaker. Ten of these beneficiaries used DME equipment other than the respiratory assist 
device under study, decreasing the total to 225 completed beneficiary surveys (81 percent 
response rate). 
The beneficiary surveys inquired about the frequency of equipment usage and supplier home 
visits. Beneficiaries also were asked to describe the specific services provided during the 
supplier home visits.  In addition, we asked the beneficiaries if they were satisfied with the 
equipment and whether using the device had improved their quality of life in order to assess 
whether frequency of visits impacted beneficiary satisfaction or quality of life. 
Manufacturer Surveys. We conducted telephone surveys with representatives of the three 
respiratory assist device manufacturers. The surveys included questions on whether the 
equipment needs to be serviced, the type of service required, and whether servicing protocols 
have been established.  Our survey also included questions about the content of servicing 
protocols, the maintenance of equipment servicing records and the existence of protocols 
regarding patient monitoring services. We requested that manufacturers provide supporting 
documentation where appropriate. 
Accreditations Agency Surveys.  We interviewed, via telephone, representatives from the 
Joint Commission for Accreditation of Healthcare Organizations, the National Association of 
Home Care, the American Association for Home Care, the American Association for 
Respiratory Therapy Care, and the Advanced Medical Technology Association. We discussed 
whether these organizations have established standards or policies regarding the level of 
servicing for the respiratory assist devices under study and the monitoring of patients who use 
this equipment. 
Final Sample used for Analysis

Analysis relies upon data concerning 206 beneficiaries (74 percent of sample) for whom we 
could incorporate both the beneficiaries survey responses and corresponding supplier service 
records.  Supplier service records regarding visits to beneficiaries are used as the primary data 
source. Information gathered from beneficiary surveys is used to enrich information gathered 
from suppliers and manufacturers. 
All of the data, gathered from various sources, is linked back to individual beneficiaries as the 
primary sampling unit. Accordingly, beneficiaries serve as the unit of analysis for 
7 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  all projected figures.  All estimates regarding beneficiaries are projected to the population of all 
beneficiaries using bi-level respiratory assist devices with a back-up rate. 
The 206 beneficiaries used in the final analysis were served by 182 suppliers. As previously 
stated, 10 of the 235 beneficiaries we were able to interview over the phone were not using, 
nor had they ever used, the bi-level respiratory assist device with a back-up rate.  They were 
excluded from our analysis.  Further, 19 beneficiaries were eliminated from the analysis because 
their suppliers did not return surveys, failed to submit service records, or provided only 
protocols. 
The table below illustrates the final sample. For more detail of beneficiary and supplier samples 
see Appendix A. 
Table 1: Final Sample 
Completed Beneficiary Telephone Surveys  235 
Completed Beneficiary Surveys with  10 
Incorrect durable medical equipment 
Completed Beneficiary Surveys without  19 
Corresponding Supplier Service Records 
Beneficiary Surveys Used for Analysis  206 
Supplier Responses Used for Analysis  182 
We conducted our review in accordance with the Quality Standards for Inspections issued 
by the Presidents Council on Integrity and Efficiency. 
8 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  F I N D I N G S  
Supplier services consist primarily of routine maintenance 
and patient monitoring 
According to our analysis of industry publications, there are two types of equipment servicing 
potentially required by this device: internal equipment servicing and external equipment 
servicing. Further, suppliers may provide patient monitoring to ensure proper utilization of the 
equipment. 
Internal equipment servicing requires servicing the internal components of the device to insure 
proper functioning of the device. We have interpreted this to fall within the definition of 
extensive maintenance that is performed by authorized technicians based on manufacturers 
recommendations for broken down components or specialized tests.  The HCFA covers such 
extensive maintenance as repairs. 
External equipment servicing consists of cleaning and replacing device accessories. This type of 
servicing is encompassed by HCFAs definition of routine maintenance which is testing, 
cleaning, regulating and checking of the beneficiarys equipment.  The HCFA description of 
routine maintenance indicates that maintenance should be the responsibility of the owner of 
the equipment, rather than of the retailer or some other person who charges the beneficiary. 
Patient monitoring includes instructing the patient on the safe and effective use and maintenance 
of the equipment, including precautions to avoid equipment contamination and patient infection. 
It may also include diagnostic activities such as obtaining blood samples to determine blood gas 
values, oximetry, and pulmonary function measurements. 
Manufacturers, suppliers, and beneficiaries all report that the services provided to beneficiaries 
consist of routine maintenance, mainly of the equipments accessories, and monitoring the 
patients interaction with the machine. 
Manufacturer and supplier protocols stipulate external equipment servicing and 
patient monitoring, not internal servicing 
All three manufacturers of the respiratory assist device under study report that the equipment 
itself does not require periodic internal servicing. They do indicate that external servicing is 
required. These manufacturers define external servicing as changing or cleaning the face mask, 
filter, or hose. All three manufacturers also indicate that beneficiaries interface with the 
equipment should be monitored on a periodic basis. 
9 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  The supplier protocols we reviewed follow the guidelines set forth by the manufacturers. They 
too indicate the device requires external and not internal servicing. Further, most suppliers have 
adopted the definition of external servicing established by the manufacturers.14  Ninety-six 
percent of beneficiaries have suppliers who indicate that this device requires servicing.  When 
asked to explain what type of services they provide, 63 percent of suppliers in our sample 
indicate that they service the accessories (i.e., check/clean the filter, mask, or tubing) when 
visiting the beneficiary. Seventy-six percent of suppliers in our sample report checking settings 
and pressures to ensure beneficiary compliance with respiratory therapy. 
Beneficiaries report that supplier visits include routine equipment servicing and 
patient monitoring, not internal servicing 
The majority of beneficiaries report that their equipment was serviced during supplier home 
visits.  When asked to describe the service performed, beneficiaries report that servicing 
typically includes maintaining or replacing the accessories and adjusting the setting on the 
respiratory assist device.  In particular, beneficiaries who reported that they knew what 
equipment servicing was performed, indicated the following: 
<  75 percent of beneficiaries indicated suppliers brought new supplies, 
<  62 percent indicated the suppliers replaced the filter, 
<  50 percent indicated suppliers adjusted the equipment based on oxygen saturation test 
results, 
<  17 percent indicated suppliers cleaned the filter, and, 
<  15 percent indicated suppliers cleaned the face mask and hose. 
Twenty-nine percent of beneficiaries indicated suppliers performed other services such as 
checking the hours of usage and the settings.  One beneficiary indicated that the supplier had 
visited in order to replace a broken machine. Three other beneficiaries indicated suppliers had 
performed requested repairs. 
Beyond servicing the equipment, almost all beneficiaries report that the supplier representatives 
provided patient education and orientation to the equipment when the machine was first 
delivered.  This education and orientation includes how to turn the machine on, how to wear the 
face mask, and how to clean the accessories.  Most beneficiaries also report that the supplier 
representative followed-up with them after the equipment was first delivered. These follow-ups 
consisted mainly of ensuring that the face mask fit properly, inquiring whether the machine has 
been helpful, determining the beneficiarys oxygen saturation level, and checking beneficiary 
vitals. 
14	 Eighty-six percent of the suppliers reported that they had used the manufacturer manual in 
developing their service protocols. 
10 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  For most beneficiaries, visits do not meet supplier protocols 
for frequency 
We assessed the frequency of supplier visits15 in relation to the visit schedules established in 
supplier protocols since no definition of what constitutes frequent servicing exists in the law. 
Suppliers establish own protocols defining frequency of visits to beneficiaries 
In the absence of official policy guidance, individual suppliers have established their own 
protocols outlining the frequency and content of visits to beneficiaries using the device.16 
Generally, supplier protocols outline a separate initial visit schedule for a specific period of time 
from the date of delivery. Visits during this initial period are more frequent in order to instruct 
the patient on how to properly use, care for and clean the equipment.  At the end of this period, 
presumably the patient is comfortable with how to clean and care for the equipment and the 
supplier transitions into an on-going visit schedule that is less intense. A few suppliers have 
established a visit schedule that is consistent from the date of delivery. 
The supplier protocols we examined reflect a range of frequency for initial contacts made to the 
beneficiarys home immediately after delivery of the equipment. One supplier merely requires a 
follow-up phone call to the beneficiary; whereas another protocol requires daily visits for the 
first week, three visits the second week, two visits the 3rd week and one visit the 4th week. 
The duration of the initial visit schedule also varies by supplier.  For almost half of the suppliers, 
the initial visit schedule continues for 3 months from the date of delivery before an on-going 
schedule is implemented.  An additional third of suppliers indicated that their initial visit schedule 
continues for one month from the date of delivery. 
The majority of suppliers in our sample (60 percent) indicated that their on-going schedule 
consists of quarterly visits to the beneficiarys home. An additional 28 percent of suppliers in 
our sample indicated that their on-going schedule of visits consists of monthly visits to the 
beneficiarys home.  A few suppliers indicated that their on-going schedule of visits is 
conducted based on the patients needs. 
15  While the vast majority of these visits were home visits, a few were performed over the phone. 
16	 Ninety-one percent of suppliers indicate that they have protocols that cover the frequency and 
type of servicing for the device. A slightly higher percentage of suppliers indicate that they have 
protocols that address the education and monitoring of the beneficiaries using this device. 
11 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  Supplier records revealed inconsistent visits from the supplier that do not reflect 
supplier protocols 
The variation in the number of days between visits does not reflect a pattern of consistent, on-

going visits stipulated in supplier protocols. While the median number of days between a

beneficiarys first visit and their second visit is 45 days, the number of days between these two

visits ranges from 1 to 468 days. This variability appears throughout the time frame captured in

our analysis. For example, the number of days between the third and fourth visit ranges

between 1 and 352 days. The range between the seventh and eight visits is from 1 to 215

days. 

The extreme variability in the frequency of visits makes it difficult to provide an aggregate

picture of the services being provided to beneficiaries. Table 2 offers a glimpse of actual visit

schedules for 10 randomly selected beneficiaries, providing a sense of how visit schedules differ

from beneficiary to beneficiary and for an individual beneficiary over time. This table lays out

the number of days between each visit received by the beneficiary. For example, beneficiary

one received three visits.  There were 468 days between the first and second visit and 13 days

between visit two and three. 

Table 2: Number of Days Between Visits for a Random Selection of Beneficiaries 
Visit  Visit  Visit  Visit  Visit  Visit  Visit  Visit  Visit 
1 to 2  2 to 3  3 to 4  4 to 5  5 to 6  6 to 7  7 to 8  8 to 9  9 to 10 
Beneficiary #1  468  13 
Beneficiary #2  52  35  74  32  2 
Beneficiary #3  32  30  32  60  38  82  33  77  77 
Beneficiary #4  98  88  14  71  85 
Beneficiary #5  91  75 
Beneficiary #6  3  5  54 
Beneficiary #7  3  10  12  21  58  8  46  11  143 
Beneficiary #8  5  2  91  133  82 
Beneficiary #9  93 
Beneficiary #10  54  25  18  53  47  7  15  39  28 
12 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  Column one of Table 2 represents the number of days between the beneficiaries first visit, 
typically when the machine is delivered and the patient is educated as to its use and care, and 
the second visit. As previously stated, most supplier protocols indicate that this second visit 
should occur very soon after the first visit since the introductory period often requires significant 
beneficiary support to ensure that they are receiving the maximum benefit from the machine. In 
Table 2, only three beneficiaries receive a follow-up visit within a week. Only four beneficiaries 
received a visit within a month. Beneficiary one does not receive a follow-up visit for over a 
year. 
Table 2 also accurately demonstrates that different beneficiaries receive different levels of 
service.  Three beneficiaries appear to be receiving very regular visits, either monthly or 
quarterly. Other beneficiaries receive much more sporadic visits, and, some beneficiaries stop 
being visited after 3 or 4 visits.  This termination of visits is not due to the fact that the 
beneficiary stopped using the machine. The average number of months that this sample of 
beneficiaries used the machine was 15 months. Beneficiary one, for example, has only three 
visits despite the fact that Medicare records show the beneficiary was using the machine for 24 
months and Medicare reimbursed the supplier a monthly rental fee for each of these months. 
Majority of beneficiary survey respondents report inconsistent visits from the 
supplier that do not reflect supplier protocols 
Based on the frequency outlined in supplier protocols, we would expect 85 percent of 
beneficiaries to be visited more frequently initially.17  Only 48 percent of beneficiaries indicate 
that the supplier came more often right after the ventilator was first delivered than they do at 
present. An almost equal number indicated that they did not receive more intense visits initially. 
For on-going visits, we would expect, based on an analysis of supplier protocols, that the 
majority of beneficiaries (60 percent) would be visited on a quarterly basis.  However, only 27 
percent of beneficiaries reported that they were visited quarterly by the supplier.  Although we 
would expect, at most, 12 percent of beneficiaries to be visited on a less frequent basis than 
quarterly, more than double that number (30 percent) were visited less than quarterly. Thirty-
three percent of beneficiaries reported that they were visited monthly. This is in line with 
expectations based on supplier protocols. 
Beneficiaries visited frequently are more likely to be using oxygen 
Beneficiaries receiving more frequent visits are more likely to be on oxygen as well as using the 
respiratory assist device. Forty-three percent of beneficiary survey respondents 
17	 5.8 percent of protocols called for only 1 follow up visit or phone call, 4.4 percent of initial visits 
were based on patient needs, and 4.4 percent of protocols made no distinction between initial and 
on-going schedules. 
13 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  with oxygen indicated that they were visited on a more than monthly or monthly basis, whereas 
only 22 percent of beneficiaries not using supplemental oxygen indicated that they were visited 
on a monthly basis.18  Only 24 percent of beneficiaries with oxygen were visited less than 
quarterly, compared to the 57 percent of beneficiaries not on oxygen that reported less than 
quarterly visits. 
For beneficiaries on oxygen, it is difficult to ascertain whether their frequent visits are due to 
their respiratory assist device or the oxygen equipment. Individuals on oxygen are potentially 
more likely to receive regular visits because they have two pieces of equipment.  Oxygen 
equipment is rented on a monthly fee schedule similar to the respiratory assist device.  Two 
pieces of equipment can mean two different suppliers performing home visits or one supplier 
checking both pieces of equipment. Sixty-two percent of beneficiaries on oxygen indicated that 
the supplier serviced their oxygen equipment at the same time they came to service the 
ventilator. Eighty-six percent of suppliers in our sample indicated that they serviced other types 
of equipment at the same time they visited the beneficiarys home to service the respiratory 
assist device.19 
Beneficiary satisfaction or quality of life not dependent on frequency of visits 
The frequency of supplier visits does not seem to significantly impact beneficiaries levels of 
satisfaction with the machine or their sense as to whether the respiratory assist device has 
improved their quality of life. Overall, 82 percent of beneficiaries believe the bi-level 
respiratory assist device with the back-up rate has improved their quality of life.  This high level 
of satisfaction remains even when beneficiaries are receiving infrequent visits.  Eighty percent of 
beneficiaries report being either satisfied or very satisfied with their bi-level respiratory assist 
device despite the fact that they are receiving supplier visits less than quarterly. 
Contrary to Supplier Protocols, the Number of Beneficiaries 
Receiving Visits Declines Over Time 
In order to review the pattern of service delivery from the date the beneficiary received the 
respiratory assist device under study, we reviewed the supplier service records of the 89 
beneficiaries who received their device in 1999. For these beneficiaries, we had 
18  No beneficiaries that were without oxygen were visited more than monthly. 
19	 Thirty-three percent of suppliers specified that the other equipment was for oxygen. However, 44 
percent of suppliers did not specify the type of other respiratory equipment serviced. 
14 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  service records20 from the day they received their equipment through, at least, the subsequent 9

months from their start dates. 

We found that the number of beneficiaries receiving visits drops over time, even though

suppliers continued to receive monthly rental reimbursements during this time. While a

decrease in the number of visits per beneficiary is expected based on supplier protocols, a

decrease in the number of beneficiaries receiving services is not. 

Almost half of the beneficiaries received their last visit from their supplier within 6 months of

receiving their machine. Twenty-one percent of beneficiaries received their last visit from the

supplier 3 months from their start date. Eight percent of beneficiaries never received a single

visit. Further, 32 percent of the beneficiaries did not receive a visit in the month following their

start date.

An analysis of the number of beneficiaries being visited quarterly, reflecting the predominate

supplier protocol, also shows that the number of beneficiaries receiving services drops over

time. Eighty-five percent of beneficiaries received a visit in the first quarter after they started

using the machine. The number of beneficiaries receiving a visit within the second quarter drops

to 59 percent.  The third quarter only 52 percent of beneficiaries received a visit.

Not only do the number of beneficiaries receiving services drop over time, but the visits these

beneficiaries receive do not correspond to suppliers protocols. Based on our analysis of

supplier protocols, 87 percent of these 89 beneficiaries should have been visited in the 6th and

9th month from their start dates. However, less than 25 percent of beneficiaries received visits

at these times. The total number of visits received by beneficiaries was also 20 percent below

the expected number of visits based on supplier protocols.  On average, beneficiaries receive a

total of six visits. 

One reasonable explanation for the declining number of beneficiaries visited is that over time

beneficiaries learn how to properly maintain the respiratory assist device and its accessories, no

longer requiring the assistance of a professional.  Thus, the supplier may not need to continue

visiting these beneficiaries. The Medicare population receiving this device is disproportionately

young as compared to the entire Medicare population, and may need less assistance than more

elderly beneficiaries. Twenty-seven percent of the users of the respiratory assist device under

study are less than 65 years old as compared to 13 percent for the overall Medicare

population. On the other end of the spectrum, only 6 percent of respiratory assist device users

are 85 years old or older compared to 10 percent in the overall Medicare population. 

20  Suppliers provided service records from January 1, 1999 through May, 2000. 
15 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  Our data indicates that beneficiaries who are less than 65 years old and qualify for Medicare 
based on disability rather than age, are more likely to be visited on an infrequent basis. Sixty-
four percent of younger, disabled beneficiaries were visited quarterly or even less frequently. 
Fifty-eight percent of disabled beneficiaries indicated that they receive extremely infrequent 
visits. In comparison, only 28 percent of aged Medicare beneficiaries (65 years old and older) 
indicated that they received extremely infrequent visits. Beneficiaries 85 years old or older are 
the most likely to indicate that they are receiving monthly visits. 
For beneficiaries that did receive visits, the use of oxygen might explain why they continue to 
receive services.  Of the beneficiaries who continue to receive visits 6 months after their start 
date, 84 percent are also receiving oxygen.  As previously stated, the use of oxygen makes a 
beneficiary more likely to be visited more frequently. This analysis indicates that the use of 
oxygen also makes a beneficiary more likely to continue to receive service over time. 
However, the purpose of these visits may be more about servicing the oxygen equipment than 
the respiratory assist device. 
Covering the respiratory assist device under capped rental 
could save Medicare $11.5 million annually 
Between January 1996 and September 1999, the Medicare program allowed $160 million for 
the respiratory assist device under study. We estimate that, if these devices were reimbursed 
under capped rental methodology, Medicare would have only allowed $117 million. This 
yields a savings of $43 million for this 45 month period, or $11.5 million annually. This 
represents approximately 27 percent of the total Medicare allowed payments for this device. 
This estimate of savings is extremely conservative. In determining how much Medicare would 
have been reimbursed under the capped rental category, we used the highest known purchase 
price for a bi-level respiratory assist device with back-up rate to determine the monthly 
payments. This price, $6,750, represents the most expensive and least purchased respiratory 
assist device. We also assumed that no beneficiaries choose to purchase the machine, but 
rather rented it for the full capped rental period of 15 months. For beneficiaries who do not 
choose the purchase option and continue to rent the device on their own after the 15 months, 
the supplier is allowed a semi-annual maintenance fee.  This fee was also factored in to our 
calculations. 
The average number of months a beneficiary used the device between January 1996 and 
September 1999 was 16 months. This is 1 month beyond the length of the allowed rental 
period under capped rental. In fact, 57 percent of beneficiaries rent the respiratory assist 
device for less than 15 months. The number of rental months ranged from 1 to 45 months. 
16 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  On average, the total allowable charge per beneficiary, under the frequent and substantial 
payment methodology, was $8,557, which is higher than the most expensive retail price for a 
bi-level respiratory assist device of $6,750.  In fact, half of the beneficiaries had allowable 
charges that exceeded this retail price.  These beneficiaries allowable charges represent 85 
percent of the total allowable charges. 
Services would be covered under capped rental for the majority of beneficiaries 
With both the frequent and substantial servicing payment category and capped rental, the 
supplier is paid a monthly rental fee for, at least, the first 13 months. Thus, for the first 13 
months, suppliers are receiving similar reimbursement with equivalent expectations and should 
provide service to beneficiaries with respiratory assist equipment in the same manner. 
After the 13th month (or the 15th month if the beneficiary chooses not to purchase the 
equipment under capped rental), the two payment methodologies diverge. Items in the frequent 
and substantial payment category would continue to be reimbursed a monthly rental fee until 
such time as the medical necessity ends. Reimbursement for servicing is covered within that 
fee.  Under capped rental, if a beneficiary opts not to purchase the equipment at the end of the 
capped rental period but rather continue to rent it on their own, the carrier will reimburse the 
supplier a maintenance and servicing payment. This fee is payable every 6 months, whether 
servicing is provided or not. For purchased respiratory assist devices, maintenance and 
servicing payments are made when repairs are necessary to make the equipment serviceable. 
Given the continued ability of suppliers to bill for periodic servicing, we believe the divergence 
in payment after the 13th or 15th month should not alter the frequency of contact between the 
provider and the patient. Fifty-seven percent of beneficiaries utilize a bi-level RAD for less than 
15 months.  One study found that, on average, beneficiaries utilize respiratory assist devices for 
less than 12 months. 
For those beneficiaries who continue to need the machine beyond the 15 months, our analysis 
reveals that 76 percent of them did not receive a visit after the 15th month. Of those who 
continued to use the bi-level RAD and receive visits after 15 months, 83 percent of them were 
also on oxygen and would be receiving home visits to monitor their oxygen usage. 
Beyond the ability to bill for periodic servicing under capped rental, suppliers would also be 
able to bill separately for the accessories that must be periodically replaced.21  Currently, they 
cannot bill for these items under the frequent and substantial payment 
21	 Special exception was made for accessories for RADs that were reclassified from frequent and 
substantial servicing to capped rental under OBRA 1993. 
17 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  category. The necessary accessories (i.e., face mask, hose, and filter) for the device also are 
used for other respiratory assist devices and thus already have their own HCPC codes with 
which to bill HCFA. 
18 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  R E C O M M E N D  A T I O N S  
HCFA should move the bi-level respiratory assist device with 
a back-up rate from the frequent and substantial servicing to 
the capped rental payment category 
The HCFAs intention to move the bi-level respiratory assist device with back-up rate from the 
frequent and substantial payment category to the capped rental payment category appears to be 
justified. Beyond capturing savings, our findings indicate that the bi-level respiratory assist 
device with back-up rate primarily requires routine maintenance and patient monitoring. 
Further, this level of servicing is not performed frequently, often stopping after a short period of 
time. 
The servicing that is being provided does not exceed the monthly coverage that would be 
covered under capped rental for the first 13 or 15 months. The minimal level of servicing paid 
for after the 15 months or purchase of the machine corresponds with our finding that visits to 
beneficiaries drop over time, with almost half of beneficiaries receiving their last visit within 6 
months of equipment delivery. 
19 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  A G E N C Y  C O M M E N T S  
The HCFA concurred with our recommendation, stating that they plan to move the bi-level 
respiratory assist device with a back-up rate from the frequent and substantial servicing 
payment category to the capped rental payment category. They believe this change is needed 
to accurately reflect the requirements of Section 1834(a)(3) of the Social Security Act. 
20 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX A 
Sample Data

Beneficiary Sample 
This table provides detailed information regarding the sample of beneficiaries contacted for the 
telephone survey. 
Stratum 1  Stratum 2 
Sample Category  Ventilator  Ventilator And  Total 
Oxygen 
Total Population  4,047  14,288  18,992 
Original Sample  150  150  300 
Excluded by Office of Investigations  9  12  21 
Revised Sample  141  138  279 
Deaths  5  2  7 
Unable To Contact Beneficiary  21  16  37 
Completed Surveys  115  120  235 
Incorrect piece of durable medical  5  5  10 
equipment 
No Supplier Surveys  12  7  19 
Completed Surveys used for Analysis  98  108  206 
21 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX A 
Sample Data

Supplier Sample 
This table lists by category the universe to the total number of completed supplier surveys used for 
analysis. 
Sample Category  Total 
Total Suppliers in Sample  250 
Excluded by Office of Investigations  21 
Revised Total  229 
Did Not Return Surveys  23 
Completed Surveys  206 
No Beneficiary Phone Surveys  24 
Completed Surveys Used for Analysis of  182 
Supplier Sample 
22 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX B 
Confidence Intervals for Selected Statistics

The following table shows the point estimates, sample sizes and 90 percent confidence intervals 
for selected statistics in the order that they appear in the report.  These  calculations account for 
the stratification of the sample as described in the methodology. 
90 Percent 
Point  Confidence 
Statistic  Estimate  n  Interval 
Percentage of beneficiaries that indicated suppliers  75.4 %  120  68% to 83% 
brought new supplies during their visits 
Percentage of beneficiaries that indicated suppliers  61.9%  120  54% to 70% 
replaced filter 
Percentage of beneficiaries that indicated suppliers  50.4 %  120  42% to 58% 
adjusted the equipment based on oxygen saturation 
test 
Percentage of beneficiaries that indicated suppliers  16.8 %  120  11% to 23% 
cleaned the filter 
Percentage of beneficiaries that indicate suppliers  14.7%  120  9% to 20% 
cleaned the face mask and hose 
Percentage of beneficiaries that indicated that the  48.4 %  197  42% to 55% 
supplier visited more frequently initially 
Percentage of beneficiaries reporting quarterly visits  26.7 %  197  21% to 33% 
Percent of beneficiaries reporting visits less than  31.5 %  197  26% to 37% 
quarterly 
Percent of beneficiaries reporting monthly visits  33.1%  197  27% to 39% 
23 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX B 
Confidence Intervals for Selected Statistics (cont.
)

90 Percent 
Point  Confidence 
Statistic  Estimate  n  Interval 
Percent of beneficiaries who did not receive a single  7.6%  89  3% to 12% 
visit the entire nine months 
Percent of beneficiaries who did not receive a visit the  32%  89  23% to 41% 
month following their start date 
Percent of beneficiaries receiving visits in the first  85.4%  89  78% to 92% 
quarter after their start date 
Percent of beneficiaries receiving visits in the second  58.9%  89  49% to 69% 
quarter after their start date 
Percent of beneficiaries receiving visits in the third  51.9%  89  42% to 62% 
quarter after their start date 
Percent of beneficiaries receiving bi-level RAD in 1999  76.8 %  89  69% to 85% 
with no visits in the 6th  month
Percent of beneficiaries receiving bi-level RAD in 1999  77.3%  89  69% to 85% 
with no visits in the 9th  month
Percent of beneficiaries who utilize bi-level RAD for  56.9%  206  50% to 63% 
less than 15 months. 
Percentage of beneficiaries, using the bi-level RAD  76%  94  68% to 84% 
beyond 15 months, who did not receive a visit after 15 
months. 
Percentage of beneficiaries, using the bi-level RAD  83.3%  21  74% to 93% 
beyond 15 months and receiving visits after 15 months, 
who are also on oxygen. 
24 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX C 
Results of Hypothesis Testing

The following tables show the results of the hypothesis testing conducted in our analysis. We used the 
chi-square statistic to evaluate statistical significance since the variables we were analyzing were 
categorical. 
Frequency of Supplier Visits by Oxygen 
Visited  Visited  Visited  Visited Less  Dont Know 
More than  Monthly  Quarterly  than  how often 
Monthly  Quarterly  visited 
Without  0%  21.5%  19.3%  57%  2.1% 
Oxygen 
With Oxygen  6.7%  36.5%  28.9%  24.0%  3.8% 
Significant at the 0.0000 level, DF=4 
Frequency of Supplier Visits by Age 
Visited  Visited  Visited  Visited Less  Dont Know how 
More than  Monthly  Quarterly  than  often visited 
Monthly  Quarterly 
Less than 65  8.3%  23.9%  39.5%  24.7%  3.7% 
years old 
65- 74  2.2%  38.1%  23.9%  35.6%  0% 
75-84  4.4%  34.4%  17.5%  36.4%  7.3% 
Greater than  12.0%  39.9%  36.0%  12.0%  0% 
or equal to 85 
Significant at the .05 level, DF = 4 
25 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX C 
Results of Hypothesis Testing

Frequency of Visits by Medicare Status 
Visited  Visited  Visited  Visited Less  Dont Know 
More than  Monthly  Quarterly  than  how often 
Monthly  Quarterly  visited 
Aged  6.0%  35.3%  27.5%  27.7%  3.5% 
Disabled  0%  22.0%  16%  58.0%  4.0% 
Significant at the 0.0000 level, DF=10 
26 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX D 
Non-Response Analysis

A consideration in survey analysis is that the results may be biased if non-respondents are

significantly different from respondents. To determine whether a difference exists in this survey,

we compared the two groups, respondents and non-respondents, by age and oxygen usage. 

We chose these variables since our analysis of respondents showed they had an impact on the

frequency of visits, a core concern of the evaluation.

Our analysis showed no statistically significant difference between respondents and 

non-respondents with respect to age.  There was a statistically significant difference between

respondents and non-respondents with respect to oxygen usage.  We found that beneficiaries

on oxygen had a higher response rate (77 percent) compared to non-respondents on oxygen

(68 percent). The computed chi-square statistic (2.78) is statistically significant at the 90

percent confidence level. This indicates a potential for bias in the results. 

In order to ascertain the impact of the response rate on frequency of visits, we undertook an

analysis of the non-respondents.  Assuming that non-respondents would have answered the

same as respondents, we imputed non-respondents likely answers regarding frequency of visits

based on the distribution represented by similar respondents. The inclusion of non-respondents

did not alter the findings presented. For example, we found that 36.54 percent of beneficiaries

on oxygen were visited monthly. Had we included non-respondents, the number of

beneficiaries on oxygen that were visited monthly would have been 36.57 percent.  This

difference is within the confidence interval of our original estimate of 8 percent. Thus, we found

no statistical evidence of bias based on oxygen usage.

27 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX E 
Agency Comments 

28 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440  APPENDIX F 
Related Office of Inspector General Reports

Usage and Documentation of Home Oxygen Therapy (OEI 03-96-00090) 
Medicare Payments for Pressure Reducing Support Services (OEI 02-95-00370) 
Oxygen Concentrator Services (OEI-03-91-01710) 
29 
Bi-Level Respiratory Assist Device with a Back-up Rate  OEI-07-99-00440