Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JUNE 2001 

OEI-07-99-00440 

Respiratory Assist Devices 

With Back-up Rate 
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 

Tim Dold, Project Leader

Ann Maxwell, Lead Analyst

Ianna Kachoris, Program Analyst

Linda Paddock, Program Analyst

Michael Barrett, Program Analyst

Elander Phillips, Program Assistant

Margarita Rodriguez, Program Assistant

Erin Bliss, Intern

HEADQUARTERS 

Alan Levine, Program Specialist 

Stuart Wright, Director, Medicare and 

Medicaid 

Brian Ritchie, Director, Technical Support 

Staff 

Barbara Tedesco, Mathematical Statistician 

Scott Horning, Program Analyst 

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 
EXECUTIVE SUMM ARY 

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 equipment’s accessories, and 

monitoring the patient’s interface with the machine. None of the suppliers or manufacturers 

indicated internal servicing as part of the regular servicing protocol. 

Bi-Level Respiratory Assist Device with a Back-up Rate i 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 HCFA’s 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 

Bi-Level Respiratory Assist Device with a Back-up Rate ii 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate iii OEI-07-99-00440 
TABLE OF CONTENTS 

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

Bi-Level Respiratory Assist Device with a Back-up Rate iv OEI-07-99-00440 
INTRODUCTION 

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 patient’s 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 

Bi-Level Respiratory Assist Device with a Back-up Rate 1 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 

Bi-Level Respiratory Assist Device with a Back-up Rate 2 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 patient’s 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 patient’s 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 supplier’s 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 bilevel 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.

Bi-Level Respiratory Assist Device with a Back-up Rate 3 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 

Bi-Level Respiratory Assist Device with a Back-up Rate 4 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 “patient’s 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 beneficiary’s 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 5 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 6 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 beneficiary’s 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 

Bi-Level Respiratory Assist Device with a Back-up Rate 7 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 

Incorrect durable medical equipment 

10 

Completed Beneficiary Surveys without 

Corresponding Supplier Service Records 

19 

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 President’s Council on Integrity and Efficiency. 

Bi-Level Respiratory Assist Device with a Back-up Rate 8 OEI-07-99-00440 
FINDINGS 

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 HCFA’s definition of “routine maintenance” which is “testing, 

cleaning, regulating and checking of the beneficiary’s 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 equipment’s accessories, and monitoring the 

patient’s 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 9 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 beneficiary’s 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 10 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 

beneficiary’s 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 beneficiary’s home. An additional 28 percent of suppliers in 

our sample indicated that their on-going schedule of visits consists of monthly visits to the 

beneficiary’s home. A few suppliers indicated that their on-going schedule of visits is 

conducted based on the patient’s 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 11 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, ongoing visits stipulated in supplier protocols. While the median number of days between a

beneficiary’s 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 

1 to 2 

Visit 

2 to 3 

Visit 

3 to 4 

Visit 

4 to 5 

Visit 

5 to 6 

Visit 

6 to 7 

Visit 

7 to 8 

Visit 

8 to 9 

Visit 

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 

Bi-Level Respiratory Assist Device with a Back-up Rate 12 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. Thirtythree 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 13 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 beneficiary’s 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.” 

Bi-Level Respiratory Assist Device with a Back-up Rate 14 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 15 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. Sixtyfour 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 16 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 17 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 18 OEI-07-99-00440 
RECOMMEND ATIONS 

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 HCFA’s 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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 19 OEI-07-99-00440 
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. 

Bi-Level Respiratory Assist Device with a Back-up Rate 20 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 

equipment 

5 5 10 

No Supplier Surveys 12 7 19 

Completed Surveys used for Analysis 98 108 206 

Bi-Level Respiratory Assist Device with a Back-up Rate 21 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 

Supplier Sample 

182 

Bi-Level Respiratory Assist Device with a Back-up Rate 22 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. 

Statistic Estimate 

Point 

n Interval 

Confidence 

90 Percent 

Percentage of beneficiaries that indicated suppliers 

brought new supplies during their visits 

75.4 % 120 68% to 83% 

Percentage of beneficiaries that indicated suppliers 

replaced filter 

61.9% 120 54% to 70% 

Percentage of beneficiaries that indicated suppliers 

adjusted the equipment based on oxygen saturation 

test 

50.4 % 120 42% to 58% 

Percentage of beneficiaries that indicated suppliers 

cleaned the filter 

16.8 % 120 11% to 23% 

Percentage of beneficiaries that indicate suppliers 

cleaned the face mask and hose 

14.7% 120 9% to 20% 

Percentage of beneficiaries that indicated that the 

supplier visited more frequently initially 

48.4 % 197 42% to 55% 

Percentage of beneficiaries reporting quarterly visits 26.7 % 197 21% to 33% 

Percent of beneficiaries reporting visits less than 

quarterly 

31.5 % 197 26% to 37% 

Percent of beneficiaries reporting monthly visits 33.1% 197 27% to 39% 

Bi-Level Respiratory Assist Device with a Back-up Rate 23 OEI-07-99-00440 
APPENDIX B 

Confidence Intervals for Selected Statistics (cont.)

Statistic Estimate 

Point 

n Interval 

Confidence 

90 Percent 

Percent of beneficiaries who did not receive a single 

visit the entire nine months 

7.6% 89 3% to 12% 

Percent of beneficiaries who did not receive a visit the 

month following their start date 

32% 89 23% to 41% 

Percent of beneficiaries receiving visits in the first 

quarter after their start date 

85.4% 89 78% to 92% 

Percent of beneficiaries receiving visits in the second 

quarter after their start date 

58.9% 89 49% to 69% 

Percent of beneficiaries receiving visits in the third 

quarter after their start date 

51.9% 89 42% to 62% 

Percent of beneficiaries receiving bi-level RAD in 1999 

with no visits in the 6 month th 

76.8 % 89 69% to 85% 

Percent of beneficiaries receiving bi-level RAD in 1999 

with no visits in the 9 month th 

77.3% 89 69% to 85% 

Percent of beneficiaries who utilize bi-level RAD for 

less than 15 months. 

56.9% 206 50% to 63% 

Percentage of beneficiaries, using the bi-level RAD 

beyond 15 months, who did not receive a visit after 15 

months. 

76% 94 68% to 84% 

Percentage of beneficiaries, using the bi-level RAD 

beyond 15 months and receiving visits after 15 months, 

who are also on oxygen. 

83.3% 21 74% to 93% 

Bi-Level Respiratory Assist Device with a Back-up Rate 24 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 

More than 

Monthly 

Visited 

Monthly 

Visited 

Quarterly 

Visited Less 

than 

Quarterly 

Don’t Know 

how often 

visited 

Without 

Oxygen 

0% 21.5% 19.3% 57% 2.1% 

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 

More than 

Monthly 

Visited 

Monthly 

Visited 

Quarterly 

Visited Less 

than 

Quarterly 

Don’t Know how 

often visited 

Less than 65 

years old 

8.3% 23.9% 39.5% 24.7% 3.7% 

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 

or equal to 85 

12.0% 39.9% 36.0% 12.0% 0% 

Significant at the .05 level, DF = 4 

Bi-Level Respiratory Assist Device with a Back-up Rate 25 OEI-07-99-00440 
APPENDIX C 

Results of Hypothesis Testing

Frequency of Visits by Medicare Status 

Visited 

More than 

Monthly 

Visited 

Monthly 

Visited 

Quarterly 

Visited Less 

than 

Quarterly 

Don’t Know 

how often 

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 

Bi-Level Respiratory Assist Device with a Back-up Rate 26 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.

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

Agency Comments 

Bi-Level Respiratory Assist Device with a Back-up Rate 28 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) 

Bi-Level Respiratory Assist Device with a Back-up Rate 29 OEI-07-99-00440