Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

OXYGEN CONCENTRATOR SERVICES


F* SERVICtt 

~+ 6*V + 

~v JUNE GIBBS BROWN 

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2 Inspector General


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NOVEMBER 1994


OEI-O3-91-O171O
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OFFICE OF INSPE~OR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services’ (HHS) 

programs as well as the health and welfare of beneficiaries served by those programs. This 

stat utory mission is carried out through a nationwide network of audits, investigations, and 

inspections conducted by three OIG operating components: the Office of Audit Sefices, the 

Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs 

the Secreta~ of HHS of program and management problems and recommends courses to 

correct them. 

OFFICE OF AUDIT SERVICES 

The OIG’S Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors in 

carrying out their respective responsibilities and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the Department. 

OFFICE OF INVESTIGATIONS 

The OIG’S Office of Investigations (01) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 

unjust enrichment by providers. The investigative efforts of 01 lead to criminal convictions, 

administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 

control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AND INSPECTIONS 

The OIG’S Office of Evaluation and Inspections (OEI) conducts short-term management and 

program evaluations (called inspections) that focus on issues of concern to the Department, 

the Congress, and the public. The findings and recommendations contained in these inspection 

reports generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, 

and effectiveness of departmental programs. This report was prepared in the Philadelphia 

regional office under the direction of Joy Quill, Regional Inspector General and Robert A. 

Vito, Deputy Regional Inspector General. Principal project staffi 

REGION


Robert A. Katz, Rroject Leader


Donna M. Millan, Lead Ana(yst


Cynthia R. Hansford


Daniel Brooks


Dianne Griffiths


Leslie Grossman


Craig Feinberg


HEADQUARTERS


W. Mark Krushat, SC.D.


Brian Ritchie


Tom Noplock

Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

OXYGEN CONCENTRATOR SERVICES 
EXECUTIVE SUMMARY 

PURPOSE 

This report describes the services provided to Medicare beneficiaries who rented 

oxygen concentrators in 1991. We conducted this study to determine the nature and 

extent of these sewices. 

BACKGROUND 

Medicare coverage of home oxygen care 

Medicare allowances exceeded $660 million in 1991 for oxygen concentrator rentals. 

Nationally, the average monthly allowance for stationary equipment including 

concentrators was approximately $273. 

Section 1861(S)(6) of the Social Security Act prescribes coverage of durable medical 

equipment (D ME) including home oxygen equipment and supplies under Medicare. 

Medicare covers home oxygen care for beneficiaries who suffer from significant 

hypoxemia (a deficiency in the amount of oxygen in the blood). The Health Care 

Financing Administration (HCFA) manages the Medicare program. 

@gen systems 

The three primary oxygen systems are (1) oxygen concentrators, (2) liquid oxygen, and 

(3) gaseous systems. Liquid and gaseous systems are administered directly to patients 

using conventional tanks or cylinders. 

Designed primarily for home use, oxygen concentrators are electrically powered 

devices which provide long-term, life-sustaining supplemental therapy for patients with 

inhibited pulmonary function, such as chronic obstructive pulmonary disease. The 

devices provide a richer concentration of oxygen to the patient by separating 

atmospheric gases from room air. 

Concentrator require maintenance 

The delivery of effective therapy embodied in home oxygen equipment implies that 

suppliers perform services on an initial as well as a continuing basis to assure the 

delivery of therapeutic care. Generally, patients using items such as wheelchairs and 

hospital beds require little monitoring. In contrast, oxygen therapy patients typically 

require more attention in the form of periodic services from the oxygen supplier. 

Such services may include equipment monitoring and maintenance, emergency service, 

and patient instruction and assessment. 

i 
The HCFA implemented changes in the processing of DME claims (including claims 

for oxygen concentrator rentals) effective October 1, 1993. Under the new system, 

suppliers must meet certain standards to obtain a billing number. However, the new 

standards did not delineate minimum service requirements for beneficiaries receiving 

home oxygen care. 

Methodology 

Using a 2-stage random sample, we selected beneficiaries in 8 Medicare carrier service 

areas. The 8 service areas (referred to as States in this report) were Arkansas, 

Georgia, Kentucky, New Jersey, North Carolina, Oklahoma, Pennsylvania, and 

Wisconsin. Our beneficiary sample represents the total population of 220,371 

Medicare beneficiaries who received oxygen concentrator therapy for at least 3 months 

in 1991. 

FINDINGS 

Home Ozygen Concentrator llerapy Neceiwitata Support Se@es. 

�	 Oxygen concentrator usage necessitates that suppliers deliver services 

periodically. 

�	 A number of national organizations have established service standards for home 

oxygen care. 

�	 Standards implemented by national organizations detail specific practices 

suppliers should meet, including guidelines for equipment and patient care. 

Some Benejiczhia Receive Extensive Services while Ohm Receive Few Services. 

k	 About 77 percent of beneficiaries do not receive equipment monitoring services 

every 30 days. 

�	 Nearly half of all beneficiaries--47 percent--do not receive any patient care 

evaluations or assessments from suppliers. 

Many Benejkiaria Did Not Receive Services Endked @ National (hganizations. 

�	 Many of the beneficiaries did not receive the recommended selvices endorsed 

by two national organizations involved in respiratory treatment--the Department 

of Veterans Affairs and the American Association for Respiratory Care. 

Medicare Poticiix Contribute To The W& Variation In Suppti Sem”ces. 

�	 Current Medicare policies do not delineate specific service requirements for 

suppliers providing home oxygen therapy. 

ii 
b	 Beneficiaries may not be knowledgeable enough to select suppliers who provide 

appropriate ongoing services. 

RECOMMENDATIONS 

We recommend HCFA produce a strategy to ensure that Medicare beneficiaries 

receive necessary care and support in connection with their oxygen therapy. We offer 

a range of options for HCFA to consider which include (1) educating providers and 

beneficiaries about the kinds of services available and recommended by national 

organizations, (2) promoting industry standards to ensure better and more consistent 

supplier practices, and (3) setting minimum service standards by requiring suppliers to 

meet accreditation, certification, or licensing requirements. 

COMMENTS 

We solicited and received comments on our draft report from HCFA and other 

concerned organizations, which included the National Association for Medical 

Equipment Services (NAMES), the Health Industry Distributors Association (HIDA), 

the Health Industry Manufacturers Association (HIMA), and the American 

Association for Respiratory Care (AARC). The full text of their comments can be 

found in Appendix H. 

The HCFA generally agreed with our recommendation, but preferred the first option 

we presented. The NAMES, HID& and AARC agreed with our recommendation 

and supported the establishment of more explicit service standards. 

We appreciate the positive responses we received to our recommendation. Of all the 

reviewers who commented on our recommendation, HCFA was the most cautious in 

considering options for promotion of standards or setting minimum requirements. 

The HCFA believes that supplier business standards, newly in place, will address some 

of the problems we identified. While supplier standards can be used as a foundation 

for required services, they are neither explicit nor comprehensive in adressing the 

needs of beneficiaries on oxygen therapy. 

The HCFA also expressed concerns about resources required to promote or set 

standards. While we appreciate these concerns, we believe that innovative approaches 

may be possible if HCFA pursues a productive partnership with concerned 

organizations, such as those which commented on our report. The HCFA may wish to 

explore these options in more detail with such organizations before committing to a 

specific course of action. 

We also encourage HCFA to consider ideas beyond those which we have laid out, 

which might also accomplish the objective of ensuring beneficiaries receive needed 

services. Again, collaboration with industry and beneficiary organizations might 

identifj some of those other approaches. 

... 

111

TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

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


FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


Home Oxygen Therapy Necessitates Support Selvices . . . . . . . . . . . . . . . . . . . . 6


Beneficiaries Receive Varying Levels of Care . . . . . . . . . . . . . . . . . . . . . . . ...8


Beneficiaries Did Not Receive Recommended Care . . . . . . . . . . . . . . . . . . . . 12


Medicare Policies Contribute to Variation in Support Services . . . . . . . . . . . . 13


RECOMMENDATIONS AND COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . ...15


APPENDICES 

A Medicare Supplier Standards.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l 

B: One Supplier’s Monthly Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-l 

c:	 Examples of Classification of Monitoring Services . . . . . . . . . . . . . . . . . . C-1


D: Calculations and Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . D-1


E: NAMES’ Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..E-l


F: Manufacturer’s Maintenance Procedures . . . . . . . . . . . . . . . . . . . . . . . . . F-1


G: Typical VA Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..G-l


H: Comments from HCFA and Concerned Organizations . . . . . . . . . . . . . . H-1

INTRODUCTION 

PURPOSE 

This report describes the services provided to Medicare beneficiaries who used oxygen 

concentrators in 1991. We conducted this study to determine the nature and extent of 

these services. 

BACKGROUND 

Section 1861(S)(6) of the Social Security Act prescribes coverage of durable medical 

equipment (DME) including home oxygen equipment and supplies under Medicare. 

Medicare covers home oxygen care for beneficiaries who suffer from significant 

hypoxemia (a deficiency in the amount of oxygen in the blood). The Health Care 

Financing Administration (HCFA) manages the Medicare program. 

The three primary oxygen systems are (1) oxygen concentrators, (2) liquid oxygen, and 

(3) gaseous systems. Liquid and gaseous systems are administered directly to patients 

using conventional tanks or cylinders. 

On June 1, 1989, HCFA implemented a fee schedule reimbursement system for 

oxygen equipment. This replaced the customary, prevailing, and reasonable charge 

methodology process which governed DME reimbursements previously. The fee 

schedules set reimbursement rates in four categories: stationary equipment, oxygen 

contents, portable contents, and portable equipment. Within a carrier’s service area, 

all items in each of the categories are reimbursed equally. The carriers developed the 

rates (subject to yearly updates) based on 1986 supplier charge data. Medicare 

allowances exceeded $660 million in 1991 for oxygen concentrator rentals. Nationally, 

the average monthly allowance for stationary equipment including concentrators was 

approximately $273. 

Designed primarily for home use, oxygen concentrators are electrically powered 

devices which provide long-term, supplemental oxygen therapy for patients with 

inhibited pulmonary function, such as chronic obstructive pulmonary disease. The 

devices provide a richer concentration of oxygen to the patient by separating 

atmospheric gases from room air. Generally, patients qualify for oxygen concentrator 

therapy if they have reduced pulmonary function measurable by blood gas analysis or 

pulse oximetry testing. 

Oxygen concentrators, unlike some other types of DME, deliver supplemental oxygen 

therapy directly to the patient. Patients using home oxygen may be too ill to leave 

their homes; many literally survive from day to day because of the therapy delivered 

by their oxygen equipment. Generally, patients using items such as wheelchairs, 

walkers, and hospital beds require little monitoring once their equipment has been 

delivered. In contrast, oxygen therapy patients typically require more attention, 

1 
Although HCFA states that these services are “an integral part of oxygen and DME 

suppliers’ costs of doing business,” the specific nature of these services is not 

delineated. The HCFA also states, “Such costs are ordinarily assumed to have been 

taken into account by suppliers (along with all other overhead expenses) in setting the 

prices they charge for covered items and services.”l 

Changes in CZaims I%xrsing Environment 

There have been concerns about past practices by some DME suppliers since 

Medicare’s inception. Such practices include (1) carrier shopping (essentially, billing 

the carrier which has the highest reimbursement even though patients reside in a 

different area), (2) using multiple supplier billing numbers to disguise unethical 

billings, and (3) using telemarketing techniques to solicit supplies and equipment. 

The HCFA implemented sweeping changes in the processing of DME claims 

(including claims for oxygen concentrators) filed on or after October 1, 1993. The 

changes were designed to counter abusive practices and streamline claims processing. 

The changes included the following: 

b	 All existing suppliers had to reapply for Medicare billing numbers to a new 

entity known as the National Supplier Clearinghouse (NSC). Among other 

functions, the NSC investigates to assure that suppliers have only one billing 

number. 

�	 The phasing in of four DME regional carriers (known by the acronym 

DMERCS) to process all DME claims as well as claims for orthotics and other 

medical supplies. 

F	 Suppliers must meet specified standards to obtain a billing number, such as the 

repair and maintenance of rental items. (See Appendix A for a list of the 

standards.) 

�	 Suppliers found not meeting standards could have their billing numbers 

revoked. 

At the end of 1993, the supplier enumeration process under the new system was 

incomplete. About 75 percent of an estimated 120,000 DME suppliers had been 

enumerated, according to a HCFA representative. 

Rew”ous Ojjke of Inspector General (OIG) Work 

In 1987, we conducted a study comparing Medicare reimbursement for home oxygen 

and oxygen equipment with amounts paid by non-Medicare payers, We found non­

] Medicare Carrier’s Manual, Section 5105. 

2 
Medicare payers haddeveloped cost-effective reimbursement methods for home 

oxygen which resulted in monthly payments as low as one-quarter the amount paid by 

Medicare. 

One of the non-Medicare payers mentioned in the report was the Department of 

Veterans Affairs (VA). We contacted 122 VA hospitals and found all paid 

substantially less than Medicare for home oxygen concentrators. 

We found that VA hospitals have independent authority to decide which 

reimbursement options are the most economical. About 73 percent of the hospitals 

contacted provided home oxygen services through a competitive acquisition process. 

We completed a study in 1990 centered on the medical necessity of oxygen 

concentrators for Medicare beneficiaries. Entitled “National Review of the Medical 

Necessity for Oxygen Concentrators,” we reported that one-third of the sample 

beneficiaries in the study either did not need oxygen or did not need oxygen to the 

extent billed.


A follow-up study completed in 1991, “Oxygen Concentrator Reimbursement:


Medicare and the Veterans Administration,” revealed that Medicare pays more than 

twice as much for oxygen concentrators as the VA. 

In another 1991 study entitled “Trends in Home Oxygen Use,” we found that oxygen 

concentrators were the most frequently used home oxygen delivery system during 1989. 

Specifically, concentrators represented approximately 80 percent of Medicare 

payments for oxygen therapy semices. 

METHODOLOGY 

Using a 2-stage random sample, we selected beneficiaries in 8 Medicare carrier service 

areas. The 8 service areas (referred to as States in this report) were Arkansas, 

Georgia, Kentucky, New Jersey, North Carolina, Oklahoma, Pennsylvania, and 

Wisconsin. Our original sample consisted of 275 Medicare beneficiaries representing 

212 suppliers. These beneficiaries received oxygen concentrator therapy for at least 3 

consecutive months in 1991, the most recent year available. Due to lack of supplier 

documentation, the final sample includes 183 suppliers representing 244 beneficiaries. 

This sample size allows us to project our results within +/- 1.2 percent to 12.3 percent 

at the 90 percent confidence level, with the great majority of estimates made within 

+/- 5 percent. Our beneficiary sample represents a total national population of 

220,371 Medicare beneficiaries who received oxygen concentrator therapy for at least 

3 months in 1991. 

After we identified the suppliers who provided the oxygen concentrators, we wrote to 

them requesting copies of their records for the 1991 rental periods for the sample 

beneficiaries. We requested a copy of the original physician’s prescription and copies 

of any written instructions supplied to the beneficiaries. We also asked each supplier 

3 
to complete -a questionnaire detailing their company’s background, staff qualifications, 

and practices on patient and equipment care. 

Some beneficiaries received services from multiple suppliers during 1991. In these 

cases, we decided to use the information from the suppliers with the longest rental 

periods in our calculations. We did not attempt to determine why these beneficiaries 

had more than one supplier. 

We accepted written evidence of home services rendered. When a supplier did not 

provide written evidence of services performed, we recontacted them to ask for such 

documentation. Twenty-nine suppliers representing 31 beneficiaries were unable to 

provide documentation. Reasons for lack of documentation include (1) no records 

could be found, (2) records were lost or destroyed, and (3) failure to document 

services performed. Since we were determined to use a conservative approach, we 

excluded these cases from our sample. Their exclusion reduced our sample size to 183 

suppliers representing 244 beneficiaries. Still, our reliance on documentation is a 

limitation of our study since it is possible in some cases that semices were rendered 

but not recorded. Likewise, semices which were documented may not have been 

actually performed. Through follow-up calls with suppliers, visits with suppliers, 

classifications of services, and removal of suppliers with no documentation from our 

analyses, we attempted to minimize error in both directions. 

We analyzed the information to determine the nature as well as the extent of services 

rendered in 1991. We classified the services as either an equipment or a patient 

monitoring service. Where documentation existed, we classified equipment set-ups as 

equipment monitoring services. (An example of one supplier’s monitoring procedures 

is contained in Appendix B.) 

Many suppliers submitted documentation on services which did not involve equipment 

or patient monitoring, such as disposable equipment drop-offs and equipment pickups. These services were not included in our classifications of equipment and patient 

monitoring services. (See Appendix C for examples of monitoring services.) 

Patient education and training could be classified as either an equipment or a patient 

monitoring service. Since we found this semice typically contains elements relating to 

patient care, such as assessing the patient’s capacity to operate the device, we 

classified it as a patient monitoring service. 

We contacted the oxygen supplier for clarification when we had questions about the 

type of service rendered. We gave suppliers the benefit of the doubt by giving them 

credit for performing a service if unresolved questions existed. A registered nurse with 

an extensive background in pulmonary care acted as our consultant and assisted us 

with the analyses. 

We initiated the data calculations with a database of 244 beneficiaries. We divided 

the beneficiaries into two subsets of data: (1) those who had zero monitoring services, 

4 
and (2) those with one or more services. We then grouped beneficiaries by the 

number of billing months during 1991, from 3 to 12 months of service. 

Some findings, such as the minimum and maximum number of days between sewices, 

are based upon the number of days between monitoring services. These findings could 

then be reported for those beneficiaries who had two or more services. 

We based our analyses on a 30-day standard of service provision because suppliers bill 

Medicare and receive reimbursements on a monthly cycle. Therefore, the 30-day cycle 

with 60 and 90-day projections was both a logical and convenient standard to use to 

assess services provided to beneficiaries. (See Appendix D for an illustration of the 

calculations, statistical projections, and confidence intervals for percentages of 

beneficiaries.) 

We visited a number of suppliers in different States to verify the validity of 

documentation and the credentials of supplier staff. We also contacted 22 

beneficiaries to veri~ the type and frequency of services provided. 

We contacted other third-party payers in the selected States, including VA hospitals, 

Medicaid State agencies, and private payers, to obtain their policies on setices 

provided to oxygen patients. We also obtained information from the DMERCS and 

the NSC. 

We met with a number of organizations, including the National Association for 

Medical Equipment Services (NAMES)2, the American Association for Respiratory 

Care (AARC), the Health Industry Distributors Association (HIDA), the Health 

Industry Manufacturers Association, the National Board for Respiratory Care, ECRI 

(an organization which tests medical equipment and supplies), and the National 

Association of Medical Directors of Respiratory Care. The Food and Drug 

Administration provided additional expertise on pertinent pulmonary equipment and 

accepted respiratory care protocols. 

our review was conducted in accordance with the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

2Formerly known as the National Association of Medical Equipment Suppliers 

5 
FINDINGS


HOME OXYGEN CONCENTRATOR THERAPY NECESSITATES SUPPORT 

SERVICES. 

Oxygen concentrator usage in the home necessitates that suppliers deliver a wide array 

of services on a recurring basis. Oxygen use obligates suppliers to perform these 

services because of its relatively complex, clinical, and life-sustaining nature compared 

to most other DME devices. 

The importance of support services, such as equipment and patient monitoring, for 

oxygen concentrator patients is critical for the proper functioning of the equipment as 

well as the effectiveness of the therapy it provides. 

National accrediting bodies eistabhkh serw”ce standards for borne oxygen care. 

Accrediting bodies such as the Joint Commission on the Accreditation of Healthcare 

Organizations (JCAHO) and the Community Health Accreditation Program (CHAP) 

outline equipment and patient care standards. The JCAHO has accredited oxygen 

suppliers since 1988. In its 1993 manual, JCAHO requires oxygen suppliers to 

perform ongoing routine and preventive maintenance with qualified staff. Such 

maintenance must be documented. Approximately 27 percent of the responding 

suppliers maintained JCAHO accreditation. About 50 percent of the suppliers stated 

they were planning to seek accreditation in the future. 

The CHAP also surveys and accredits home medical equipment companies. The 

CHAP stipulates that suppliers must utilize qualified individuals to provide patient 

education and training as well as periodic assessment of the equipment. 

I?of&nal organizations endcme senice standmd for home oxygen care, 

Professional organizations such as the American Association for Respiratory Care 

(AARC) advocate specific guidelines in patient and equipment care. For example, 

one patient care guideline recommends that credentialed personnel: 

� visit/monitor patients at least once a month, and 

b assess patients, recommend changes in therapy, and instruct caregivers. 

Equipment care guidelines recommend credentialed personnel: 

�	 reinforce appropriate practices and performance by the patient and caregivers, 

and 

6

F	 assure that the oxygen equipment is being maintained in accordance with 

manufacturers’ recommendations. 

The National Association for Medical Equipment Services (NAMES), which


represents more than 2000 home medical equipment suppliers, has been active in


promoting service standards for the oxygen therapy industry. In a Consensus


Conference on Home Medical Equipment Services sponsored by NAMES in 1993, the


attendees stressed the desirability of frequent, “regularly scheduled visits” for home


oxygen patients. The workgroup advocated visits to stabilized concentrator patients


every 30 to 60 days. The NAMES’ Code of Ethics relating to services is in


Appendix E.


Equipment manufacturers issue service manuals containing recommended


maintenance activities for suppliers to perform at specified intervals. For example,


DeVilbiss (model MC44-90) advises suppliers to check audible alarm systems and


oxygen concentrations on a monthly basis. (See Appendix F for an example of


maintenance recommendations.) Healthdyne (models H-300 and BX-5000) prescribes


which maintenance functions should be classified by daily, weekly, monthly, and semi-


annual time intervals.


Some organizations support the use of concentrators equipped with indicators or


monitors. The indicators are warning systems to alert patients when the purity of the


concentrator output falls below therapeutic levels. These groups include the American


Society of Testing and Materials, a voluntary group which evaluates standards for


medical equipment, and ECRI, an organization which tests medical devices.


Payem rnunal.zte service requirements for beneficimies. 

Payers, including the Department of Veterans Affairs (VA) and Medicaid State 

agencies, also delineate service requirements. The VA hospitals enter into legally 

binding contracts with their suppliers. The contracts set clear standards for items such 

as required equipment and accessories, patient education and training, frequency of 

visits, emergency care, documentation of services, and patient assessment by qualified 

staff. A typical example of required services is contained in Appendix G. (A separate 

report will compare Medicare reimbursements and standards to the VA as well as 

other third-party payers.) Georgia State Medicaid prescribes specific services which 

suppliers must provide at no additional reimbursement. Georgia Medicaid 

reimbursement for rental of concentrators includes disposable equipment necessary for 

operation, a monthly trip for checking the equipment, and patient training and 

instruction. 

Some third-party payers (such as the Minnesota Medicaid program) mandate that 

suppliers only use concentrators with an indicator to monitor the concentrator output. 

Medicare has no policy on oxygen concentrator indicators or monitors. 

7

SOME MEDICARE BENEFICIARIES RECEIVE EXTENSIVE SERVICES 

WHILE OTHERS RECEIVE FEW SERVICES. 

We found variation in the delivery of equipment and patient services to beneficiaries. 

Some beneficiaries received extensive and periodic services, while other beneficiaries 

received services on an erratic basis. 

E@ipment monitoring services 

Equipment monitoring services include checking concentration levels, changing and 

cleaning filters, and assuring the integrity of alarms and back-up systems. 

Oxygen equipment must be maintained regularly to ensure the effectiveness of home 

oxygen therapy. Unclean filters, for example, can affect the purity of a concentrator’s 

output resulting in less than therapeutic or even harmful therapy for the patient. 

Moreover, prolonged delivery of less than therapeutic levels of concentrator output 

can result in hypoxia (a reduction of oxygen in body tissues below normal levels). In 

severe cases, hypoxia leads to death of tissue cells. In less severe degrees, hypoxia 

causes depressed mental activity and muscle weakness. Clinically, such a patient 

exhibits decreased energy, shortness of breath, and cyanosis or a bluish skin 

discoloration. 

As Table 1 indicates, 8 percent of the sample beneficiaries did not receive any 

equipment services. We projected this figure to the number of beneficiaries 

nationally. Of the 18,024 beneficiaries who did not get any equipment services, 

65 percent had been renting oxygen concentrators for 6 months or longer. 

Percent of Beneficiaries Receiving Equipment SeMces in 1991 

Table 1. 

Beneficiaries Wzth O Services 8% 

18,024 

I Beneficiaries With One or More Services 92% 

— 202,347

Ii Total Beneficiaries Nationally 100% 

IL 220,371 

For the remaining 92 percent of sample beneficiaries who got one or more equipment 

services, we conducted further analyses. We calculated how often they received one 

service based on 30, 60, and 90-day cycles. These cycles correspond with the 30-day 

billing periods and various standardized time periods as advocated by many 

organizations involved in respiratory care. 

8

As Graph 1 illustrates, about 25 percent of these beneficiaries received an equipment 

service every 30 days. Almost 47 percent received a service every 31 to 60 days. 

Another 18 percent got one service every 61 to 90 days, while 10 percent received an 

equipment service every 91 or more days. 

Graph 1. 

How Often Beneficiaries 

Received One Equipment Service* 

A6.9 

24.6 

18.1 

10.3 

I every 31-60 days I every 91 + days 

every 30 days every 61-90 daYs 

‘*Benefi-ciarieaWhoReceive-Oneor Mo;eServices 

To display the variation in the amount of time between equipment services, we 

examined the number of days between services for beneficiaries who had two or more 

services. We grouped the beneficiaries by the number of months they had been using 

oxygen therapy. As Table 2 indicates, a wide range in the number of days between 

services exists in each billing category. For example, one beneficiary who used oxygen 

therapy for 12 months waited 223 days between equipment services, while another 

beneficiary who also used oxygen therapy for 12 months received an equipment service 

2 days following a previous service. This variation exists in each of the billing 

categories. 

9

Maximum and Minimum Number of Days Between Equipment Sefices* 

Table 2 

Number of Billing 

Months for 

Beneficiaries u 

Highest Number of 58 62 108 84 109 91 237 153 136 223 

Days Between 

Equipment Servkes 

Lowest Number of 5 3 1 10 10 

Days Between 

IIEquipment Services 

�lnclu&!sOnlyBeneficiariesWhoReceived‘llvoorMoreEquipmentSeMces 

Patient monitoring services 

Although Medicare does not provide additional reimbursement for clinical patient 

services in home oxygen care, many suppliers provided these setices and evaluations 

along with equipment monitoring services. Examples of patient monitoring services 

include taking vital signs, testing pulse oximetry, instructing the patient in proper selfcare as well as routine equipment care, and evaluating symptoms such as breath 

sounds, sputum production, and skin color. 

Nearly half (47 percent) of the sample beneficiaries received no patient services, as 

shown in Table 3. This percentage represents 102,665 beneficiaries nationally. of 

these beneficiaries, almost three-quarters were on oxygen therapy for 6 to 12 months. 

Percent of Beneficiaries Receiving Patient Services 

Table 3. 

Beneficiaries With O Services 47% 

102,665 

Beneficiary= With One or More Servkes 53% 

[ 117,706 

Total Beneficiaries Nationally 100% 

–..--–,. ___ 220,371 Il... 

10

For the remaining beneficiaries who got one or more patient semices, we calculated 

the frequency of services based on 30, 60, and 90-day cycles (refer to Graph 2). 

About 15 percent of these beneficiaries received onesemice eve~30 days. Forty 

percent of these received one patient service every 31t060 days, while about19 

percent had one patient service every 61t090 days. Approximately 26 percent 

received one patient service every91 days or more. 

Graph2 

How Often Beneficiaries 

Received One Patient Service* 

‘“~ 

“i I I 

I every3140 days I every91 + days 

every30 days every61-90days *ReneficisriesWhoReceiveOneorMoreServices 

As with equipment services, the time between patient services varied widely. We 

ca Iculated the amount of time between patient services for beneficiaries who received 

two or more services. We arrayed these beneficiaries according to the number of 

months they had been using oxygen therapy. As Table 4 shows, a wide range in the 

number of days between services exists within each billing category. One beneficiary 

who had been on oxygen therapy for 12 months waited 334 days between patient 

services, while another beneficiary, who had also used oxygen for the entire year, 

received a service one week following the previous service. 

11

Maximum and Minimum Number of Days Between Patient Semkes” 

Table 4. 

~ 3 4“ 5 6 ‘7”” i 9“’”I”lU”” ““~= 

Highest Number of Days 49 55 51 82 106 92 190 86 111 334 

I Between Patient Services 

~ Lowest Number of Days 5 12 1 7 4 2 6 25 22 7 

,1Betsveen Patient Semkes 

“Includes Only Beneficiaries Who Received‘l’% or More Patient SeMctx 

MANY BENEFICIARIES DID NOT RECEIVE SERVICES ENDORSED BY 

NATIONAL ORGANIZATIONS. 

Many beneficiaries in our sample did not receive equipment or patient care as 

specified in guidelines advocated by national accrediting bodies, professional 

organizations, and third-party payers. 

Equipment service guidelines for 77 percent of the sample beneficiaries did not meet 

the standards set by the VA and AARC, both of whom recommend monthly 

equipment monitoring services. 3 We found 34 percent of the sample beneficiaries did 

not receive services according to NAMES’ standard, which advocates one equipment 

service every 60 days. As Table 5 indicates, the percentages represent a projected 

number of beneficiaries in the nation who did not receive equipment services 

according to national standards set by these organizations. 

Ninety-two percent of the sample beneficiaries did not receive the patient care 

services recommended by the VA and AARC, which advocate a patient monitoring 

service every 30 days. About 70 percent did not meet NAMES’ guidelines, which 

recommend a patient service every 60 days. 

3 To calculate the figures for Table 5, we first added the number of projected 

beneficiaries who received zero services and the projected number of beneficiaries 

with one m- more services who fell into appropriate 30-day cycles. We then divided 

this sum by the total beneficiary population. 

12 
Percent of Beneficiaries Whose Oxygen Therapy SeMces 

Did Not Meet Recommended National Standards* 

Table 5. 

Equipment Patient services 

~ ‘mdad ‘GMDepartment of Veterans 1 service every 77.4% 92.1% 

Affairs 30 days 170,535 202,911 

American Assoeiatkm for 1 service every 77.4% 92.1910 

, Respiratory Care 30 days 170,535 202,911 

34.3% 70.5% 

75,602 ~ ~ lse~~a~~v 155,412 

*Totalpopulation of Medicarebenefieiarks nationallywho use oxygenconcentratorsin 1991=220s71. 

Many suppliers cited various reasons for not providing semices. One supplier reported 

that he occasionally “overlooks” patients. He encouraged patients to contact his 

company if no visits had been made for a couple of months. We contacted another 

supplier who had not submitted any documentation and asked if this was an 

inadvertent omission on his part. The supplier said the beneficiary lived too far away 

to visit and stopped by occasionally to pick up filters and tubing to do his own 

maintenance. These practices conflict with JCAHO guidelines which recommend 

periodic maintenance services conducted and documented by a qualified person. 

MEDICARE POLICIES CONTRIBUTE TO THE WIDE VARIATION IN 

SUPPORT SERVICES. 

We believe that the lack of standards or financial incentives for support services in 

1991 contributed to the wide variation in services which our analysis found. Since 

there were no mandato~ standards for suppliers set by Medicare and no payment 

consequences for different levels of service, both the quality and quantity of services to 

Medicare beneficiaries differed from one supplier to another. 

Even though HCFA implemented business standards as part of its new claims 

processing system, they have not detailed specific service requirements for 

beneficiaries receiving home oxygen therapy. There are no provisions regarding type 

or frequency of services that should be rendered, record-keeping practices, emergency 

care, patient education, home safety assessments, or infection control practices. 

Further, neither the supplier nor the supplier’s staff are required to meet minimum 

licensing, certification, training, educational, or credentialling standards. 

The variation in levels of services to beneficiaries also demonstrates a payment 

inequity among suppliers. Some suppliers provide regular ongoing service, while 

others do not. Although Medicare reimburses fixed payments to oxygen suppliers 

13

within designated geographic areas, the levels of services provided to beneficiaries 

residing in these areas varies considerably. Thus suppliers providing necessary 

services, as delineated by national accrediting bodies, professional organizations, and 

many third-party payers, are placed at a competitive disadvantage. Beneficiaries may 

not be knowledgeable enough in many cases to distinguish between “high sexvice” 

suppliers and “low service” suppliers, For example, one DMERC official reported that 

some Medicare beneficiaries believe they have to assemble the oxygen concentrator by 

themselves. The HCFA has no recourse against a company providing minimal or 

sp{~radic services because it has not adopted semice standards against which to 

measure supplier practices, 

14

RECOMMENDATIONS 

We recognize that ourdata represents thestate ofcareprotided by suppliers to 

Medicare beneficiariesin 1991, and concerned organizations have implemented 

improved standards of care since then. Nonetheless, itseems clear that Medicare 

policies could better support those efforts. 

WE RECOMMEND THAT HCFA PRODUCE A STRATEGY TO ENSURE 

THAT MEDICARE BENEFICIARIES RECEIVE NECESSARY CARE AND 

SUPPORT IN CONNECTION WITH THEIR OXYGEN THERAPY. 

We offer several options for HCFA to consider when developing this strategy: 

educating providers and beneficiaries, promoting standards, or setting minimum service 

requirements for Medicare suppliers. These options are not meant to be exhaustive 

or prescriptive; rather, they serve as an indication of the range of possibilities available 

to HCFA in developing its strategy. 

Educating l?ovidim and Beneficiaries 

The HCFA could initiate a program to educate providers and beneficiaries about the 

kinds of services available and recommended by national organizations for patients 

receiving oxygen therapy. Such an educational initiative might be most effective if 

undertaken in partnership with relevant professional associations. This could include 

these options: 

1.	 Educating health professionals (physicians, hospitals, etc.) to question, seek out, 

and refer patients to suppliers providing recommended services. This could be 

accomplished through articles in intermediary and carrier newsletters and 

bulletins directed towards providers. 

2.	 Informing beneficiaries of the kinds of services they should look for from their 

suppliers. This could be achieved by including a section in HCFAS Medicare 

Handbook on oxygen services, inserting educational messages on the 

Explanation of Medicare Benefits (EOMB) form, or using the expertise of Peer 

Review Organizations or Information Counseling and Assistance Grants to 

reach out to beneficiaries receiving oxygen therapy. 

Educational initiatives directed to providers and beneficiaries would likely be the least 

onerous option available to HCFA. With consumer education, suppliers providing 

higher levels of service should receive more Medicare business. As a result, more 

beneficiaries would receive higher levels of care and their oxygen therapy would likely 

be more effective and therapeutic. 

15

--

--

timoting Standimh 

The HCFA could promote standards foro~gen therapy setices which suppliers 

should provide to Medicare beneficiaries. For example: 

1.	 The HCFA, perhaps with the assistance of the DMERCS, could take a 

leadership role in promoting the standards endorsed by JCAHO, CHAP, 

NAMES and other concerned organizations to the Medicare supplier 

community. 

2.	 The HCFA could develop payment policies which provide financial incentives 

for suppliers meeting specified standards. This could be accomplished in a 

number of ways. Suppliers who are not accredited, for example, could receive 

a different reimbursement from Medicare from those which are not accredited. 

Another option could be to designate accredited suppliers as “preferred 

providers” for purposes of referrals for Medicare business. 

Promoting industry standards is just another way to encourage better and more 

consistent practices among suppliers. This is more likely to be effective if linked to 

Medicare reimbursements or the flow of referrals in some way; however, this approach 

would add a layer of administrative responsibility for the program. 

Setting Afininuun Requirements 

The HCFA could establish a minimum level of service requirements for suppliers. 

This could be accomplished and enforced through a number of mechanisms. For 

example, any one or a combination of the following strategies could be used: 

1.	 Accreditation -- The HCFA could require suppliers to become accredited by a 

nationally recognized organization such as JCAHO or CHAP. 

2.	 Certification Many suppliers meet accreditation requirements but, for 

financial or other reasons, have not undergone an inspection process to become 

officially accredited. In these cases, suppliers could certify (see below) that they 

meet all such requirements. 

3.	 Licensure We have not surveyed States to determine what licensing 

requirements might be placed on DME suppliers in certain States. We do 

know, however, that in some States suppliers must be licensed by the agency 

which regulates pharmacies. It may be that State licensure could be a vehicle 

to derive minimum standards, although a model licensure law developed by the 

Federal government might be necessary for this approach to be effective. 

Suppliers could certify annually to their DMERCS that they meet one or more of the 

proposed alternatives--accreditation, certification, or licensure. Suppliers found to be 

misrepresenting information in their certifications would have their billing numbers 

16 
suspended. The HCFAcould ensure compliance through random checks, beneficia~ 

surveys, and investigations of beneficiary complaints. 

Although this is the most demanding of the options we present, we believe it provides 

HCFA with the most assurance that standards are being consistently met by all 

suppliers. Additionally, it gives HCFA authority to require corrective action from 

suppliers found to be providing substandard or inappropriate care. 

COMMENTS ON OUR REPORT 

We solicited and received comments on our draft report from HCFA and other 

concerned organizations, which included the National Association for Medical 

Equipment Services (NAMES), the Health Industry Distributors Association (HIDA), 

the Health Industry Manufacturers Association (HIMA), and the American 

Association for Respiratory Care (AARC). 

The full text of their comments can be found in Appendix H. A summary of 

comments and our response follows. 

HCFA 

The HCFA agreed that suppliers should provide necessary services in connection with 

the oxygen equipment and supplies they furnish. The HCFA concurred with our first 

option to educate providers and beneficiaries about the kinds of services available and 

endorsed by national organizations. They also provided examples as to how the 

education could be implemented. The HCFA felt our other options would not be 

feasible because of anticipated administrative burdens. Rather than promoting new 

standards and accreditation, however, HCFA indicated that the existing supplier 

standards could be used to ensure improved setice to beneficiaries. As an example, 

HCFA said that a supplier that does not follow the equipment manufacturer’s 

maintenance procedures would be in violation of the standards. The HCFA will 

continue to encourage the DMERCS to review suppliers for compliance with Medicare 

requirements and standards. 

NAMES 

The NAMES supports our recommendations for increased supplier and beneficiary 

education along with industry standards to enhance the level of services. The NAMES 

a km stressed its commitment to promoting service standards in the indust~, 

encompassing minimum supplier service standards and supplier and beneficiary 

education. Further, NAMES volunteered to work with HCFA to develop specific 

supplier standards. 

The NAMES questioned some of the findings based on the age of the data and the 

supplier sample. They believe the industry has moved consistently and aggressively to 

becoming more service oriented. According to NAMES, JCAHO accreditation was in 

17 
its infancy in 1991; relatively few suppliers had been accredited at that time. Today,


more than 1400 suppliers have received JCAHO accreditation.


The NAMES also took the position that our inclusion of past industry abuses and


prior studies was not relevant to the purpose and objectives of the current study. The


NAMES also made a number of technical comments.


HIDA


The HIDA agreed with our conclusions concerning inconsistency among suppliers with


respect to the level of services provided to oxygen patients. In addition, HIDA voiced


support for our recommendation option to establish strong supplier standards. The


HIDA said that defining standards of service would result in the provision of the


highest levels of service and care for Medicare beneficiaries. The HIDA advocates


different levels of standards based on the type of services a supplier provides, such as


basic standards for traditional DME or more stringent standards for patients receiving


ventilator care or home infusion therapy. The National Supplier Clearinghouse could


be the entity to develop and monitor stronger standards, according to HIDA.


The HIDA felt our recommendation option relating to different payment amounts tied


to which suppliers who do or do not meet standards requires further analysis. In


particular, HIDA thought that we should consider levels of service from the patients’


needs in addition to suppliers’ capabilities. Additionally, HIDA made a number of


technical comments.


HIMA


The HIMA provided brief comments on the draft report. Oxygen therapy should be


characterized as “supplemental” oxygen rather than “life supporting,” according to


HI MA. The HIMA pointed out that FDA considers oxygen concentrators to be “non-


life” support devices which provide supplemental oxygen. In our recommendation


option on establishing minimum requirements, HIMA felt that HCFA should also


require monitors or indicators which are devices which signal concentrator failure.


Furthermore, the absence of monitors or indicators should result in less


reimbursement than units which include such devices. Some industry equipment


standards require that monitors or indicators be included as part of concentrator


equipment, according to HIMA.


AARc 

The AARC agreed with our findings and recommendations. The AARC stated that 

support services, in particular, patient assessment, is a key element of home oxygen 

therapy. Furthermore, inconsistencies in providing such services among suppliers 

cannot be permitted. Until minimum setice standards are mandated by HCF~ 

inappropriate care will abound, AARC added. 

18

The AARCexpressed concern about some aspects of the report. For example,


AARC felt the sample size was too small and could affect the statistical validity of the


report. Furthermore, they said that broad comparisons are made between Medicare


and the VA. They suggested that we emphasize the differences between the Medicare


program and the VA program instead of broad comparisons. The AARC also


included some technical comments in their response.


OIG RESPONSE


Recommendation 

We appreciate the positive responses we received to our recommendation. of all the 

reviewers who commented on our recommendation, HCFA was the most cautious in 

considering options for promotion of standards or setting minimum requirements. 

The HCFA believes that supplier business standards, newly in place, will address some 

of the problems we identified. While supplier standards can be used as a foundation 

for required services, they are neither explicit nor comprehensive in addressing the 

needs of beneficiaries on oxygen therapy. The HCFA also expressed concerns about 

resources required to promote or set standards. While we appreciate these concerns, 

we believe that innovative approaches may be possible if HCFA pursues a productive 

partnership with concerned organizations, such as those which commented on our 

report. The HCFA may wish to explore these options in more detail with such 

organizations before committing to a specific course of action. We also encourage 

HCFA to consider ideas beyond those which we have laid out, which might also 

accomplish the objective of ensuring beneficiaries receive needed services. Again, 

collaboration with industry and beneficiary organizations might identi@ some of those 

other approaches. 

Technical Comments 

In response to questions about the size of our sample, we have expanded on our


explanation of the confidence intervals for the sample and also refer readers to


Appendix D, which provides more details on our projections and their precision. We


also have acknowledged in this final report, as we did in the draft, that the data is


based on 1991 claims and services and that our findings relate to Medicare


beneficiaries’ experiences in that year. In fact, we have prominently acknowledged


that concerned organizations have worked to develop guidelines and standards since


that time. Nonetheless, Medicare policy could better support these efforts.


While we understand NAMES’ comment that prior work on the general topic of


oxygen therapy might not be of specific relevance to these findings or


recommendations, we believe that many readers will be interested in the prior work of


the OIG on this general subject. As a result, we have retained this discussion.


Likewise, while we understand AARC’S concerns about broad comparisons between


the VA and Medicare and agree that there are certainly differences between the


19 
programs, the scope of our inquiry is necessarily at a more general level. In this study, 

the VA standards represent one of several points of comparison to Medicare 

experience. Consequently, we have also retained this discussion. 

Finally, in response to other technical comments we received, we have made a number 

of changes in the report to clarify or correct the use of terms. 

20

APPENDIX A


1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

MEDICARE SUPPMER ST~ARDS 

In response to orders which it receives, a supplier must fill those orders from its 

own inventory or inventory of other companies with which it has contracted to 

fill such orders or fabricates or fits items for sale from supplies it buys under a 

contract. 

A supplier is responsible for delivery of Medicare covered items to Medicare 

beneficiaries. 

A supplier honors all warranties, express and implied, under applicable State 

law. 

A supplier answers any questions or complaints a beneficiary has about an item 

or use of an item that is sold or rented to her or him, and refers beneficiaries 

with Medicare questions to the appropriate carrier. 

A supplier maintains and repairs directly, or through a service contract with 

another company, items it rents to beneficiaries. 

A supplier accepts returns of substandard (less than full quality for particular 

item) or unsuitable items (inappropriate for the beneficiary at the time it was 

fitted and/or sold) from beneficiaries. 

A supplier discloses consumer information to each beneficiary with whom it 

does-business, which consists of a copy of these supplier standards to which it 

must conform. 

A supplier complies with the disclosure provisions cited on the HCFA-192 

form.* 

* Refers to the disclosure of ownership and control information by the supplier 

business entity on the enrollment and application form for a Medicare billing number. 

A-1

APPENDIX B


ONE SUPPLIERS MONTHLY CHECKLIST FOR OXYGEN CONCENTRATORS


‘J 

c1


‘i-l 

a 

u 

c1 

El 

n 

L1


c1 

rJ 

id 

Clean exterior of unit 

Clean or replace filters 

Clean interior of unit 

Check for signs of overheating* 

Check foam for proper placement and deterioration 

Check fan for proper operation 

Check unit for leaks 

Check system pressures 

Check cycle time 

Check outlet pressures and temperatures 

Check unit for proper air flow


Read concentration at maximum liter flow


Read concentration at prescribed liter flow


* Signs of overheating can be heat dots on sieve beds, changing color, yellowing and cracking of 

finings warpage of plastic parts, etc. 

B-1


-1 
APPENDIX C 

EXAMPLES OF CLASSIFICATION OF MONITORING SERVICES 

Examples of Equipment Monitoring Services: 

Changing Filters


Cleaning Filters


Checking the Oxygen Flow Rate


Checking the Back-up System


Cleaning the Cabinet


Checking the Concentrator Purity (percentage)


Concentrator Service/Check


Service Call


Examples qf Patient Monitoring Services: 

� Reports on the Condition of the Patient


. Pulse, Blood Pressure, etc.


� Patient Checklist to Ensure Understanding of Equipment and Care


� Phone Calls to the Patient Which Include In-Depth/Comprehensive Patient


Care Questions 

Equipmeru Set-Ups Classified as an Equipment Monitoring Service: 

Included When:


Clear Set-Up Documentation/Matches with Billing Start Date


Not Included When:


No Set-Up Documentation is Found


Already Classified as a Separate Equipment


No Documentation of Any Sefice, Despite


Examples of Equipment Drop-Ofls: 

� cannulas


� humidifiers


� tubing


� water-traps


� trachea trays


� E-tanks


� D-tanks


� H-cylinders


� Refills (liquid)


� Portable Equipment Not Counted


� Nebulizers and Drugs Not Counted


Service 

Billing Dates 

c-1

APPENDIX D 

CALCIZLAITONS z4ND CONFIDENCE lN1’ERVXLS 

-tionsofthe Number of Sewices Every 30, 6Q and90Daysj andtheM~ 

and Maximuni N&w of Days Beiween Skrvkes: 

Bene 1:


Start Date


Jan. 1 Feb. 1 Mar. 1


x 31 dys X 28 dys x 31 dys 

Total of 2 Services: (Feb. 1, Mar. 1) 

Bene 2 

Start Date 

Jan. 1 Feb. 21 Apr. 4 Jun. 1 

x 51 dys X 42 dys X 58 dys X 75 dys 

Total of 3 Services: (Feb. 21, Apr. 4, June 1) 

NUMBER OF SERVICES EVERY 30 DAYS: 

End Date 

Apr. 1 

x 

End Date 

Aug. 15 

x 

STEP 1: Find the total number of days between the start and end dates: 

Bene 1: 90 total days between the start date and end date 

Bene 2: 226 total days between the start date and end date 

STEP2	 Calculate the number of 30-day periods in which the 

beneficiary could have received a semice based on the 

total number of days between the start and end dates: 

BENE 1: 90/30= 3 

BENE 2: 226/30= 7.53 

STEP 3:	 To find the proportion of services every 30 days that the 

beneficia~ actually did receive, divide the actual number 

of semices by the number of services the beneficiary could 

have received given the total number of days between the 

start and end dates (from STEP 2): 

BENE 1: 2/3= .66 services every 30 days 

BENE 2: 3/7.53= .39 semices every 30 days 

D-1

APPENDIX E


J!!& mu.,”.

NAMES 

. . 

CODE OF ETHICS 

Ha+ngbeen aixeptedinto membership in the NationalAssoUa~ ofM-@-~t 

Suppliets.we do hereby subsonbe whout resenmnon to the A~ ‘s Code of Ethics. 

7%epurpose of the tie of Euks shd be to set end impfova ~ ~in tie 

ptztcfice of protding home medid equipmmt anti services. To maintainthe efhkfil oonduct 

and integrdyofth&AaaooWon. a member pkdges to abide by the fOff1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

To render the highest Ievei of cam pmmpdy and competenffy - ~~ a~ tie 

health and safety of tie patient. 

To serve a4 pm”enta ragacdless of face, crwd, nationaf origin ormm ofiJ/nessTOprotkfe tviaMyhome medicd equ$nnent end servioes whkh sss wPW@@ ~r 

the patients’needs. 

To hsbuct the patients antior care givers m the proper use of the we~ 

TO- fWY and acuuately to patients an~or cam ghws patiWS rights and 

ob@stions mgafdrng me ~nw$ sale and sefvice of home meokzd -enc 

TO ~ me &d~f&/ na~~ of tie pa~~&’ ~~ and not ti dkdosS SIKh 

it)hmadm witho~ p~~r a~o~, ~pt ss ~iti by hW. 

To ~ to expand and impnnfeprvfeasiondknowledge and @@ssOas to 

/VOtddePstfentsw“thequipment and senioes which are ooflfilWSdY -. 

TO ~ ~ bo~ F@e~/ and /@ &ws and ~@ations Whti govern the home 

medical equipment industry. 

TO ati ~’sating, di~ or ~~, wi~ a sou~ of pati8nt &Olds /h a 

“- mfemtl arrangement” whereby patien~ are direoted to - a SW@er of 

~ m- equipment in derogation of the patients’ rights to se&ot the sup@e= of meir choice. 

To act in good faith:@ be honest. Wand far to #/ Wnoemd. 

E-1

APPENDIX F 

MANUFACTURER% MAINTENANCE PROCEDURES 

Every OeVCVMC44 is thoroughly tested and 8. Routine Maintenance


‘burned-in” at the fa~ory to make sure that all 1, Humidifier - The humidifier (6 Fig. 3)
 of the produ~ specifications are being met, To should be cleaned daily or as recom­
 assure continued trouble-free petiormance vari - mended by the manufacturer. It should
 OUS maintenance procedures sbouid be per- be washed in warm soapy water,rinSed
 formed on a regular basis by a qualified OeVilbiss thoroughly, and refilled. Be CarefUl not to
 dealer. The foll~ing maintenance instructions overfill. The tubing and prescribed
 are provided as a guideline. canmda or mask should aiso be cleaned


A. Testing and Calibration according to $SIanUfaCtUrer’S
 recommendations. 1. Turn the power switch to the ‘ON- posithtt and dowfy turn the flow meter con- 2. Gr~ particle Fiiter - The gross particle 

Vd knob (6 Pig. 2) and note that the flow filter (6 Fig. 4) should be removed and 

rate is variable from O to 5 liters per cleaned weekly. 

minute. To remove and clean: 

2.	 When the unit is first turned on (or if not A. Turn the knob counterclockwise t/4 used for an �xtended perid of time) it 

may require up to 30minutesfor the oxyturn and remwe the entire assembly 

gti concentrsnion to stabilize. The fiow (See fig. 5). 

raw may drift stightly during this period B. Wash the assembly in warm soapy 

of tfme and the Oxygen concers~tion wiii water and rinse. Shake excess water 

9Mdually increase to a steady value at a from the filter. 

specific fiow rate. c. Use a lint-free cloth or paper towel to 

3.	 When the oxygen concentration has dry filter. Be sure Tilter is completely 

stabilized. an oxygen analyzer shotdd be dry before repiaang. 

attached to the oxygen outlet fitting (7

fig. 2) to testoxygen concentrations at D. Filter may also be cleaned by 

various fiow rate setdng% The analyzer vacuuming. 

thdd be cdibmted prior to taking an NOTE: The gross padcle filter shouId be 

oxygen percentage reading (See note monitored more closely in enw.ronments 

under 6-6). As the flow rate is increased. with abnormal amounts of particulate tlw percent of omen in the delivered gas matter in the air. Operation of the 

decreases. though the actua~ volume of DeVO/MC44 without the gross panicle 

oxygen delivered per minute ~s greater. filter will prematurely occiude the felt 

The range of oxygen delivered at the pre-fdter and cause a decrease in unit 

OUthM for various flow rates IS shown m performance. the graph beiw for the MC44. 

3. Felt Pm-filter - The felt pm-filter (2 Fig. 7) 

should be changed approximately once a 100 month under normal conditions. 

OXYGEN To repiace the pr&ilteC 

CONCEN- 90 MC44 A Rotate the filter housing (3 Fig. 7)

TR4TION (llSVdt) ccruntercfockwise to remove it from 

(Percent the intake bacteria filter (5 Fig. 7). ~ 3) 80 8.	 RemH the cap ( 1 fig- 71 on *e filter 

housing and pull out and discard the m used filter pad (2 Fig. 7). 70 ~ 

01234S c. Insen a new felt prefilter pad into 

the housing and replace the cap on FLOW (Liters per Minute) the housing. 

D. Place the filter housing on the bac- Oxvoen Production w Flow Rate teria filter and turn clockwise until 

snug. 

F -1

4. Intake eaaerta Filter - The Intake bacteria 

filter (S Fig. 6) should be !nspected at the 

same time the felt pre-fdter is inspected 

and changed when needed (approximately every SIXmonlhs). 

To replace the intake bacteria filtec 

A.	 Pull the bacteria filter out of the 

rubber grommet (See Ffg. 6). 

B. Remove the felt pm-filter assembly 

c	 Place the felt pre-filter assembly on a 

new bacteria filter. 

o.	 The complete filter assembly can then 

be insemcf into the rubber grommet. 

. . 5.	 Audible Alarm - Testing the audible alarm 

system should be included in a routine 

maintenance program. Itshould be 

checked on a manthfy basis. 

A	 To test the audible alarm system, 

renwve the line cord from thel 1S voit 

AC outfet and turn the power switch 

to the ‘ON- position. If the alarm is 

not heard or soundsweak. rep(ace the 

9 W battefy (6 Fig.14)located on 

the �ccumulator shelf next to the 

fi&mssesntsly. 

B. Plugtheunithttoa 115va4t ACoutfet 

a-- turn the power switch to the 

“ON” pti~ The aiarm wiii sound 

munentarily. If the alarmis not heard 

or sounds weak replace the 9 volt 

battery. 

NOTE: Replacement batteries can be 

purchased Iocdly and should be alkaline 

bamecies or equivalent. 

6.	 02 Concentrations - Oxygen concentrations should be checked monthly in 

accordance with the �stablished test 

procedures (Section 4, A). 

NOTE: Before checking concentrations, 

the oxygen analyzer sftasdd be property 

calibrated using � 100% pure oxygen 

source. It should �lso be rtoted that 

chngee in tempemtwa. 8kitud& or isu. 

- -Y ~ the oxygen concen­ tsdonraedmgasshown bythea~. 

Tlterebre. the analyzer should be 

~ in simi&r conditions to witera 

theconantnmr is located. 

c Periodic Maintenance 

1	 Final Eacterla Ftlter - The final bacteria 

filter [3 Fig. 12) shou~d be changed a$ 

needed (approximately once a year under 

normal condnions). 

To replace the final bacteria filter: 

A. Loosen the cabinet fasteners on the . top ana sfdes of zhe umt. 

8. Swing the front cover to the right. 

c.	 Remove hose clamp and hose from 

�ach �nd of filter and discard filter. 

o.	 install new bacter]a filter and secure 

with hose clamps. 

E.	 Reptace aver and secure with cabinet 

fasteners. 

2.	 Compr-r filter. The comoressar HEPA 

filt~ ( 13 Fig. 14) should be changed at or 

before 25.000 hours of unit operation. 

To replace compressor filtec 

A	 Refer to Setvice htruction 8 to Open 

@zinet covers. The back cover should 

be completely removed. 

B.	 Cut plastic cable tie that holds HEPA 

filter in piece. 

c	 Loosen hose ciamps and remove bfack 

rubber hose from both ends of filter. 

0.	 Install new HEPA filter with air flow 

directiort?d arrow pointing d~ 

and secure with plastic cable tie. 

NOTE: Holes for cable tie --—- ar@ located 

directly behind left sieve bed. Thumb 

screws and bracke~ that secure beds to 

unit must be removed so that cable tie 

can be ihsemed into holes. 

E.	 Attach black rubber hoses to each end 

of fifter and secure with hose ClamPS. 

F.	 Replace cabinet covers and secure 

with cabinet fasteners. 

3.	 Compressor - Inspect and change if 

neceesaq the internal component at 

10,OOQhour intervals of unit operation. 

Seaservice ~nstrucdon ~. 

NOTE: All routine and periodic 

maintenance should be recorded by 

listing the date and hour re8diftgS in a 

maintenance schedule iike the one 

shown on the following page. 

F -2

, 1 I i I 

. . 

o 

z 

< 

z 

UJ 

VI 

-

F -3 
APPENDIX G 

TYPICAL VA CONTRACT 

Oxygen Concentrator Requirements 

Contractor to furnish all labor and equipment required to provide rental service of 

oxygen concentrators for VA beneficiaries in their homes within geographical 

jurisdiction of the VA Medical Center (city, state). 

Contractor will be responsible for providing the VA beneficiary with all disposable 

such as nasal cannulas or masks, tubing, connectors, nebulizers, humidifiers and bottles 

(Aquapak, or equal substitute). Also, the contractor will be required to furnish 

emergency back-up systems: “E’ size cylinder or “H’ size cylinder as appropriate, cart, 

fk~wmeter/regulator, wrench, etc. and will also provide the vendor service for the refills 

of these cylinders. 

MONTHLY RENTAL COST FOR HOME USE WILL INCLUDE THE 

FOLLOWING: 

o	 02 concentrator and necessary disposable equipment, i.e., nasal cannulas or mask, 

humidifiers, nebulizers, extension tubing, etc. Replacement of disposable PRN. 

o Initial set-up and education of patient by qualified respiratory therapist. 

o	 All equipment and supplies necessary for back-up 02 to cover response time in 

case of equipment or power failure. 

o Monthly equipment maintenance and inspection visits. 

o	 Monthly monitoring visits by a registered or certified respiratory care practitioner to 

evaluate all aspects of the services being provided to the patient. 

o Equipment must be cleaned and semiced on a regular basis. 

(~ Delivery within the VA facility’s jurisdiction service area to include the counties 

shown on Page_. 

o Contractor will provide service 7 days a week, 24 hours a day. 

o	 Concentrators furnished under this rental agreement shall be covered by U.L. 

Listed Reference No. E71727, grounding required, be double insulated with an 

operating pressure of 25 psi - compressor thermally protected. The concentration 

shall be 9394 to 100% plus or minus 3%, oxygen at all flows and flowrate shall be 

G-1 
sufficient to provide 1, 1.5, 2, 3, or 4 liters/minute. Unit shall be equipped tith an 

audible alarm and warning lights for signaling concentrator failure. The unit shall be 

sufficient to require only minimum semice by VA beneficiary; i.e., twice weekly 

external filter cleaning, etc. 

o	 Rental price indicated shall include VA beneficia~ and family training, observation 

in use, follow-up service on rental unit every 6 to 8 weeks and 24-hour emergency 

service coverage 7 days a week. Contractor to provide each VA beneficiary with the 

telephone number for obtaining such service. 

o	 All units currently in use as stated in the requirements must be installed and 

operating inthe VA beneficiary’s home within forty-five (45) calendar days after 

award of contract. The successful bidder will be required to coordinate exchange with 

the present contractor for the transition (in the event the present contractor is not the 

successful bidder). 

o Contractor will be responsible for providing patient with all disposable and backup systems as appropriate. Copy of all documentation of service calls and routine and 

emergency visits to the VA beneficiary’s home, and visit assessments will be sent to 

Chief, Prosthetic Service. 

o	 Because of the age, condition, etc., of the VA beneficiary for whom the service is 

being provided, it is recommended, particularly in cases where a unit is being 

exchanged due to equipment failure, that the exchange be accomplished with a unit of 

the same type to avoid unnecessary confusion. 

() SPECIAL NOTE: Descriptive literature must be furnished with offer on the unit 

he/she proposes to furnish under this contract. Please indicate below nomenclature of 

this proposed unit (Brand, Model#) . 

G-2

APPENDIX H


Comments from the Health Care Financing Administration


Comments from the National Association for Medical Equipment Services


Comments fkom the Health Industry Distriiutom Association


Comments from the Health Industry Manufacturers Association


Comments from the American Association for Respiratory Care


H-1

-----

10/25/94 13:42 =410 966 5305 HES OIGOASKCFA 

13EP.%RT}lEXTOFHE.%LTH& HUMAN 5ERWCES 

— 

Qloo2/oo5 

- Health Care 

Flnar:.ac Adm-.sva:.ofi 

— .— — —— -. —----

Memorandum - ,. 

OCT 201998 

Bruce C. Vladec 

Administrator w

O* of hspector General (OXG) Draft Report “C)xygen Qmcermator Sefi-” 

@ 

(OEI-O3-91-O171O) 

June Gsbbs &own 

We revimmd the above-re~ced report which found that some M-c 

benties who use home qgem m~n~toy meqq remdve extensive semkes 

while others meek few. 

We agree with the report’s reeomrnendatiou that educating providers and 

beneficiaries about standards for necessq and standard care is impo-~ ~~ever~ 

we believe that options 2 and a uy nd b &adble because of the ixih~~t ,. dmmstrative burdens 

Our detailed mmmem on the report’s fidings and recommendation are attached 

f= your cwnsiclcratiom tile ym f~ & ~~ni~ to fiew and comment on 

this draft repor& Please contact us if you would like to disouss our ~nts and 

response. 

Attachment 

. 
--

10/25/94 13:42 S41O 966 5305 HES OIG OAS HCFA 5 003/005 —.. ,.. -

~ 

on Office of ]mmector General (OIG) Draft ReJOrK 

mGxwen CXmcentrator Services” 

PE 1-03-91-01710 

Wcormnendation 

HCFA should pdum a strategy to emre that Mcdicarc kte&iaries re4w 

necemary care and support in eonneotion with their cqgm therapy. 

We agree that suppliers should puvfde ~~ services in cmrxxtion with the 

oxyga qdprneat and supplies they fIUIL@Land that HCF’A should be doing more 

to ensure that Medicare benefioktrjes -tie the appropriate level and quali~ of 

qgen smvices that they require. 

Ra*er than promoting new standards and accreditation, however, we belhwe that tbe 

existing supplier ~ could be used to improve service to beneficiary FOT 

qlq if ~ppker practices today are the same as those ~rted in 1991, itwould 

P that tbe supplien are violating the recently irnpiernented Medicare au~lier 

standard% 

A suppiier that does not follow the maintenance procedures of the 

equipment’s manufacturer would be in violation of standard t3vcx ‘A 

supplier mrktains and repaim. . . items it has rented to beneficki=.” 

- In addition, standard four, “Answering any questions or complain~ ffOUI 

benefiti standard tiq “Requiring suppliers to be responsible for 

delivery of ~ and standard seve~ “Requiring disclosure of consumer 

tif-ti to beneficiaries,” require ovemll education of the patient end 

family regarding the use of the equipment 

HCFA will conthwe to eneonragc the tile ~edicid equipment (DME) regionai 

carriers to review suppliers for WXOpiiMlcem“thMedicare rcquksnents and 

standards. The DME regional cam”ersare required to folhw IIpon beneficiary 

complaints that they or the Nationai Sq@ier Clearinghouse (NW) reoeim In 

additi~ one of the tions for obtaining a supplier mnzber reqnhes each 

applicant to nti any liceq axtifkatio~ Or~tion required by the State 

where the supplier does business. The NSC is Imfldinga data base of StitC 

requirements end wiU rendmrdyselect applicants fcx veri6c-ion. 
10/2s/94 13:43 =410 066 630S HES OIG OAS ECFA ktl004/005 

. Page 2 

We will also pursue pruviding further specificatioIM k manual instructions to state 

exacdy what is re@rcd under the cunent supplier standards for oxygen *NFor the other patient monitoring services described in the report that am not 

encompassed in the current standards, H(XA W ~mider whether it would be 

4T-K ~ - nppliem to provide such semioes 

F~, weagreewitbthe rceommendatfon to educate prcwiders and benefkiarie% 

-d m inchk Mdkare snpplier standards information in our beneficiary ~d 

prcwikr echmation -~ 

HCFA could initiate a prognnn to educate p~~ and beneficiaries abcmt the 

kinds of services available and Tecommended by national organization for patienti 

_ qen therapy. Such an educational initiathw might be most effective if 

Unhtakell in partnemhip W“threlew%lntpmkssional associations 

HCFA Remmse 

We concur with the reeommendation of an initiative to eduoa+ providers and 

btIIcficMes which vvdl enable Medicare bin-es to make informed deoisions 

about their health care needs and help health ~ pmfcsaionals provide or mange 

for the best possible medkd care for bend- The i)ME qional carriers can 

me carrier newslettma to advise health professionais and providers about the 

importance of senkin g -CD equipmmt and meting the supplier standards 

Additionally, bene&iarks should be eneourag~ by their provider, to select $upp~e~ 

who are in the “Participating SuppIier Direetory.e 

We further belkve that physicians w&o od~ qgen for benefiariea have a 

respomibil.ityto advise them on the uso ad be maintEIUUE of the quipmcn~ 

We do not believe that usc of the Medicare ~@mok to educate bcdkhk$ *mt 

theapecifkaervicu suppliers alwdd offerwuuld be cost-effective bccanse I- -

1 perwmt of bendckriea use cxygen. ~, wu will wnsider sending out a 

special mailing to Medicare bene~ or drafting a notice for providm to -d tO 

their Medicare patiem who need oqgen thq ti~ listing the standards or 

sezvicc requirements for Medkam auppk 
-----

--

10/25/04 13:43 B41O 966 S305 HES OIG OAS HCFA 

. . 

. . —. ..-

Giloo5/oo6 

.— 

. . Page 3 

Qu?i!2d 

HCFA couldpromotestandards for -en therapy services which suppliers shouId 

provide to Medicare benefiohies 

We am withtheiutent ofthe recommcadatkm. mwcvcr,as mated abow$ rather 

than promoting new standards foraccreditati~ m
 baeve that the -g supplier

atmuhmk should be used to improve cncygenservicas provided to beneficiary=


ID*tfOmwa beliCvC thti-~hm*timem@mU

readt ma kavy a~ative burdenforthe Medicare program. (Please note tbai 

making differential payments to - suppliers that arc wxzedhed would require a 

“ IEgishltiveehan~e.) 

HCFA could establish a minimum level of se* requirements for supplie= 

HCFA Ramonse 

wedo nut concur. setting miainmm requirements for purposes ~ -=di~tio% 

cedficati~ or liccnsure is a process generally resewed for entities that furnish 

direct patient care and not for suppliers of medical equipmen~ Again, as *X 

befcma we believe that tbe eximing supplier standardsshould be nsed to improve 

axygen scMccs provided to benefidaries. 
NAMES


National Association fOr 

Medical Equipment Services 

September 30, 1994 

HAND DELIVERY 

The Honorable June Gibbs Brown 

Inspector General 

Office of Inspector General 

Department of Health and Human Services 

330 Independence Avenue, S.W. 

Cohen Building 

Room 5250 

Washington, D.C. 20201 

Re:	 Comments on Draft Report


Oxygen Concentrator Services


OEI-O3-91-O171O 

Dear Ms. Brown:


IG


SAIG


PDIG 

DIG-AS 

DIG-EI 2


DIG-01


liiC-CFM


AIC-MP


OGC/IG ~


The National Association for Medical Equipment Services 

(“NAMES”) appreciates very much the opportunity to provide


comments on t~e draft Department of Health and Human Services,


Office of Inspector General (“OIG”), inspection report entitled,


“Oxygen Concentrator Services. ” The report discusses the nature


and extent of services provided to Medicare beneficiaries who use


oxygen concentrators.


I. General Comments


NAMES concurs with the OIG’S conclusion that the use of 

oxygen concentrators in the home requires a high level of service


for oxygen-dependent individuals, and it endorses the OIG’S


recommendations for increased education and industry standards to


enhance the level of services. As the draft report recognizes,


NAMES has been active in promoting service standards to its


members for many years. NAMES, therefore, supports the OIG’S


recommendation to the Health Care Financing Administration


(“HCFAI’)to consider various strategies, including .supplier and


beneficiary education and establishing minimum supplier service


standards for the provision of oxygen concentrator services to


Medicare beneficiaries.


As set forth below, however, NAMES believes that some of


the language of the draft report, and the underlying data used by


,.,, 
The Honorable June Gibbs Brown


September 30, 1994


Page 2


the OIG to develop its findings, misrepresent the current state of


oxygen supplier senices and care for oxygen patients. In


particular, the draft report fails to provide a complete picture


of the scope and nature of accreditation within the home medical


equipment (“HME”) industry by the Joint Commission on


Accreditation of Healthcare Organizations (“JCAHO”) . While the


draft report acknowledges that its findings are based upon 1991


data, and that “concerned organizations have implemented improved


standards of care since then” (Report, p. 15) , NAMES strongly


believes that further caveats axe necessary to provide a complete


and accurate picture of the industry. During 1991, JCAHO


accreditation -- which mandates specific equipment service


requirements -- was still in its infancy. Few suppliers had been


accredited, simply because of the newness of the process, the


considerable cost, and JCAHO’S preliminary delays in scheduling


surveys of those suppliers which had sought accreditation.


Today, 1,420 suppliers have been JCAHO accredited. Many


of these accreditations have taken place during the last three to


four years -- subsequent to the time of the study. Moreover, the


industry has seen some degree of consolidation during that time


period, increasing overall the percentage of accredited suppliers.


NAMES, of course, is understandably concerned with findings of the


draft report chat some of the Medicare beneficiaries surveyed


received ~ patient care or equipment monitoring services


whatsoever. Nonetheless, NAMES believes it is critical to place


these findings in the proper historical context. NAMES urges that


the report specifically identify JCAHO accreditation as a


relatively new option for suppliers, and also note that the 1991


data sample occurred prior to the accreciitation movement within


the industry being fully underway.


II. SPecifiC COmmentS on the Draft Rf3DOrt 

Specific comments on the draft report by page number are


detailed below:


Executive Summary, D. i, Report, P. 1. 

The draft report states that patients using items such


as wheelchairs and hospital beds “require little monitoring. ”


NAMES believes this sentence to be both unnecessary and


inadvisable. For example, severely disabled patients (especially


children) utilizing custom wheelchairs, and ventilator-dependent


patients and others whose health is severely compromised, require


substantial patient and equipmelltmonitoring. NAMES certainly

The Honorable June Gibbs Brown


September 30, 1994


Page 3


concurs that oxygen therapy patients require attention, but would


avoid making sweeping comparisons which may be of limited


applicability.


Executive Summary, D. ii


NAMES recognizes that an Executive Summary is designed 

to provide a snapshot of a larger document. At the same time, 

NAMES is concerned that the specific findings which the OIG has 

chosen to include in the Executive Summary paint the HME services 

industry in the worst light possible. NAMES has worked very hard 

to improve the image of the industry as a whole, and while there 

is no desire to state the results of the study inaccurately, NAMES 

is concerned that findings of the Executive Summary taken out of 

context will undermine NAMES’ efforts to improve the industry 

image as a whole. For example, the draft report states on p. ii 

(and on page 10 of the report in substantially similar language)


that “Nearly half of all beneficiaries -- 47 percent -- do not


receive any patient care evaluations or assessments from


suppliers. “ Stated another way, over half of all beneficiaries ~
 receive such services. Similarly, one other pertinent finding


from the report should be included in the Executive Summary:


Ninety-two percent of Medicare beneficiaries


received one or more equipment services and,


of these, 71.5 percent of patients received


services every 60 days, in accordance with


NAMES’ standard, which advocates one equipment


service every 60 days.


Executive Summarv, Paqe ii


NAMES does not believe it correct to state that the


Department of Veterans Affairs (“V.A”)has “endorsed” a set of


“recommended services. “ As discussed below, there are significant


limitations with trying to compare services provided to veterans


under VA contracts and those provided to Medicare beneficiaries,


in part because there is no uniform standard of required services


under VA contracts, nor any review to assess what services are


actually performed.


Re~ort, P. 2


The section entitled “Changes in Claims Processing


Environment” incorrectly states that these changes were based on


the Omnibus Budget Reconciliation Act of 1990 (“OBRA ‘90”). In

The Honorable June Gibbs Brown


September 30, 1994


Page 4


fact, these changes were implemented as a result of


HCFA initiative permitted by provisions of OBRA ’87


subsequently codified into statutory language.


More importantly, the report alleqes that


an independent


and


there have


been concerns about abusive practi&es by HM~ suppliers “since


Medicare’s inception.” The report enumerates carrier shopping,


multiple supplier billing numbers, telemarketing, and the like.


NAMES believes this introductory provision to be unduly negative


and irrelevant to the report itself. There is no need to include


this background in a discrete study of services provided for one


type of equipment. Again, NAMES is very concerned that gratuitous


comments like this will undermine NAMES’ efforts to improve the


quality of its members, and will serve to frustrate even further


legitimate, ethical suppliers who maintain honest business


practices.


including


equipment


Re~ort, D. 3


Previous Office of Ins~ector General (OIG) Work


NAMES is concerned about the appropriateness of


findings from past OIG studies on home oxygen and oxygen


in this report. As discussed below, qiven the serious


methodological-problems with several of these studies, and the


negative and gratuitous comments about their conclusions, NAMES


recommends that this section be deleted, particularly because it


does not provide any insight into the objectives, findings or


recommendations of this report.


The OIG references two studies conducted in 1987 and 

1991, respectively, in which the OIG attempted to compare oxygen 

concentrator payment levels by Medicare and the VA. As NAMES has 

commented previously, this is an I’apples to Orangesll Comparison, 

because Medicare oxygen concentrator payments are not structured 

the same way as VA payments. For example, most VA contracts have 

separate payments for portable oxygen contents, while the Medicare 

payment includes portable contents. Even the OIG’S own study


indicated that VA disbursements for oxygen contents may not be


retrievable, thus preventing a meaningful comparison to the


Medicare stationary fee which includes portable contents.


Further, while VA contracts typically enumerate certain service


requirements, the VA has no post-contract review, audit, or


similar survey process to determine whether these services are


actually provided. Thus , cost breakdowns -- comparing what is


actually provided by a Medicare supplier in a sample study with

The Honorable June Gibbs Brown


September 30, 1994


Page 5


what a VA contractor is required to provide -- are not necessarily 

reliable. Finally, Medicare suppliers are required to incur 

considerably more administrative costs, such as monthly Clairn.s 

submission, obtaining from physicians properly completed 

certificates of medical necessity, and the like. Thus , NAMES 

believes there are serious limitations to the usefulness of such a 

comparison, and the reference to these studies in this report. 

The OIG also references a 1990 study entitled “National


Review of the Medical Necessity for Oxygen Concentrators, ” which


reported that one-third of the sampled beneficiaries in the study


“did not need oxygen or did not need oxygen to the extent billed. ”


NAMES questions how the OIG could have concluded that these


patients did not need oxygen, since medical necessity for oxygen


therapy is determined by objective standards for partial pressure


of oxygen (P02) in arterial blood or oxygen saturation levels by


ear or pulse oximetry. These had to have been documented in order


for Medicare payment to be made. NAMES also questions the 1990


report’s language with regard to patients not needing oxygen “to


the extent billed, ” since there is only one flat monthly fee that


may be billed to the Medicare program.


Methodoloqv


In ~he section entitled “Methodology,” the report 

discusses the sample used to conduct this study. AS discussed 

above, data drawn from 1991 is not representative of the industry 

today. Accredited organizations represent an ever increasing 

share of the HME industry. Further, it is unclear whether 183 

suppliers selected for this study represent distinct corporate 

entities, or whether individual branches of the same company are 

counted as separate suppliers. This is significant because, to 

the extent this represents individual corporate entities (rather 

than branches of the same organization) , the data would be skewed 

to representing smaller suppliers which may, in the past, not have 

had the resources to seek JCAHO accreditation or to provide 

enhanced levels of service. Accordingly, the size and resources 

available to the suppliers in the study needs to be clarified. 

Also, we understand that one of the suppliers in the sample was 

sold during the period in question. As a result, the OIG was 

evaluating u paperwork, while patients were actually being 

served by a w supplier under new protocols. Thus , beneficiaries 

may have actually been receiving’ considerably more services than 

were documented by the predecessor supplier. Finally, we question 

whether a 0.1 percent beneficiary sample size is statistically 

significant . At the initial meetings on this study, the OIG 

— 
The Honorable June Gibbs Brown


September 30, 1994


Page 6


assured NAMES that the groups chosen were statistically valid. 

That proof should be appended to the final report. 

Report, D. 4


Paragraph four on this page indicates that disposable


equipment drop-offs were not included in the classification of


equipment and patient monitoring services. It is likely that


equipment monitoring or clinical visits were made in conjunction


with some disposable drop-offs, particularly where registered


therapists made these deliveries, even if these services were not


properly documented. This is because most suppliers attempt to


coordinate such deliveries with other services as a means of


achieving higher cost efficiency. Without JCAHO accreditation,


suppliers may have been less likely to record the services


performed in a service file or comparable patient record. Thus ,


the exclusion of these services (due to lack of documentation) may


have unduly skewed the results towards a finding of a lower amount


of supplier services.


Re~ort, D. 5


In paragraph four, the report does not indicate whether


the documentation requested and credentials of supplier staff were


found to be valid. In paragraph six, the full names of NAMES is


written incorrectly. The correct name of the association is the


National Association & Medical Equipment Services.


Report, D. 6


The third full paragraph on this page discusses JC7U+0,


but fails to include the details noted above. Further, not onlY


has the number of suppliers who are accredited increased


substantially since 1991, but the number of beneficiaries


receivinq services from accredited suppliers has increased as


well . This is due in part to the increased number of accredited


suppliers, as well as other forces resulting in patients obtaining


services from accredited suppliers, such as consolidation within


the industry, competition and the increased emphasis on standards


by industry associations.


Report, D. 7


In the section entitled “Payers mandate service


requirements for beneficiaries, “ the OIG discusses contracts which


the VA and state Medicaid agencies enter with suppliers, and goes

The Honorable June Gibbs Brown


September 30, 1994


Page 7


on to use provisions of some of those contracts as “standards”


which have been “endorsed.” NAMES does not believe this to be an


accurate characterization. Moreover, as discussed above, NAMES


urges that the report point out an inherent limitation in its


analysis: namely, that no survey was undertaken to determine


whether the requirements set forth in these contracts in fact were


being carried out, or whether these requirements achieve


efficiency and cost-effectiveness. NAMES members provided OIG


representatives with numerous specific examples of instances in


which entities which were awarded VA contracts in fact provided no


services whatsoever, or provided only some services or different


services. NAMES believes that this type of “anecdotal


information” with respect to limitations in the report’s


methodology should be included to the extent that the draft report


itself includes “anecdotal information” with respect to individual


suppliers (see page 13) .


ReDOrt, D. 8 

Table 1 purports to project the findings of the study to


all beneficiaries nationwide. Once again, as the sample does not


accurately represent the characteristics of the overall HME


supplier industry, it is not appropriate to project the findings


across the na$ional pool of beneficiaries. This table, as well as


Tables 3 and 5, should therefore be eliminated (or at a minimum,


only show the percentages and not the national beneficiary


estimates) .


Report, DD. 9-12


As discussed above, the findings as displayed in Graph


1, Table 2, Graph 2, and Table 4 may be significantly skewed by


the types of suppliers in the study and the data irregularities


cited earlier. The level of services provided by suppliers m the


1991 sample cannot necessarily be extrapolated to a “typical”


Medicare beneficiary.


Report, D. 13


The draft report includes several anecdotal comments


about suppliers who did not provide services, but includes no


comparable descriptions of the many suppliers who have gone out of


their way -- for example, during Hurricane Andrew and the


devastating floods in the Midwest and Georgia -- to service the+r


patients. NAMES urges that “equal time” be given to a description

The Honorable June Gibbs Brown


September 30, 1994


Page 8


of suppliers providing patient and equipment monitoring services,


as well as those who did not.


ReDort, w. 14


The draft report states that “[suppliers providing


necessary services. . .are placed at a competitive disadvantage. ”


NAMES questions this statement. At least in some markets,


competitive forces will drive (and have clearly driven) some


suppliers not providing the necessary services out of business.


The respirator care industry is driven bv service.


The report goes on to explain that HCFA has no recourse


against a company providing minimal or sporadic services because


it has not adopted service standards against which to measure


supplier practices. This is essentially correct. While HCFA has


adopted minimal standards relating to more generic requirements


for HME (e.q., responsibility for delivery of items to Med+care


beneficiaries, honoring warranties, maintaining and repalrlng


equipment, and the like) (42 C.F.R. s 424.57(c)), and,HCFA may


revoke a supplier’s Medicare supplier nufier for faillng to adhere


to these standards, HCFA, regrettably, has not yet adopted, nor


endorsed accrediting bodies’ or other organizations’ standards,


for equipment ,and patient monitoring. As discussed beiow, NmES


endorses the recommendations made by the OIG in the final section


of the report to encourage higher levels of service.


Report, D. 15


At the top of the page, the draft states:


We recognize that our data represents the


state of care provided by suppliers to


Medicare beneficiaries in 1991, and concerned


organizations have implemented improved


standards of care since then. (Emphasis


added. )


NAMES believes it appropriate to note specifically that


numerous HME suppliers in fact have been accredited since that


time.


ReDort, D. 15


The draft report provides several recommendations under


the rubric of “Educating Providing and Beneficiaries. “ NAMES

The Honorable June Gibbs Brown


September 30, 1994


Page 9


urges that the report note that NAMES in fact has already


undertaken some of these efforts, i.e., “informing beneficiaries


of the kinds of services they should look for from their


suppliers. “ NAMES of course would be happy to work with the OIG


and HCFA to undertake further efforts, including, for example, a


section in HCFA’S Medicare Handbook.


Re~ort, D. 16


NAMES has been a longstanding advocate of promoting


standards for the provision of HME services, including the


requirement for supplies “to render the highest level of care


promptly and competently taking into account the health and safety


of the patient.” See Attachment E to the draft report. NAMES is


committed to working with the OIG and HCFA for development and


adoption of such standards.


The OIG has recommended three different approaches for


setting minimum requirements: (1) accreditation by a nationally


recognized organization, such as JCAHO or the Community Health


Accreditation Program (“CHAP”); (2) certification by suppliers


meeting accreditation requirements if, for financial or other


reasons, the supplier has not undergone an inspection process to


become officially accredited; or (3) state licensure.


Because most states do not license HME suppliers, NAMES


does not believe this approach alone is an effective means tO


ensure minimum requirements. Additionally, because many suppliers


do not have the resources tobecome accredited by JCAHO or CHAP,


NAMES endorses the option of allowing suppliers either to become


accredited or to certify annually to their Durable Medical


Equipment Regional Carriers (“DMERCS”) that they meet one or more


of the proposed alternatives.


NAMES believes the preferred approach is for HCFA, in


consultation with NAMES, to develop specific supplier standards


for the provision of equipment monitoring and patient care


services to add to the existing supplier standards. These


standards should encourage high quality beneficiary outcomes, as


well as efficiency and cost-effectiveness, in today ‘s marketplace.


Such standards should be reviewed periodically to ensure that they


reflect current techniques and technological developments.


Suppliers found to be out of compliance with these requirements


would then be subject to having their supplier number revoked or


other appropriate corrective action.

--

The Honorable June Gibbs Brown


September 30, 1994


Page 10


Whatever option is adopted, NAMES strongly urges that 

consideration be given to the recommendation of the Business 

Roundtable’s newly published “white paper” Toward Smarter 

Recmlation that “paperwork burdens caused by regulatory programs 

should be expressly assessed and substantially reduced.” While 

NAMES shares the OIG’S concerns that Medicare beneficiaries 

indeed, all patients -- receive regular, high quality services, it 

urges caution in mandating any extensive new paperwork 

requirements. 

III. Conclusion


NAMES supports the OIG’S conclusion that the provision


of home oxygen concentrator services requires an intensive service


component, and appreciates the OIG’S consideration of this


important issue. At the same time, NAMES questions some of the


findings in this study, based on the age of the data and the


supplier sample. NAMES believes the industry has moved


consistently and aggressively to becoming more service oriented,


as evidenced in the December 1993 Report entitled “NAMES Consensus


Conference on Home Medical Equipment Services. ” This is reflected


by the increasing number of suppliers who have obtained JCAHO and


CHAP accreditation. NAMES requests that the draft report be


revised to ref,lect the comments provided herein, including in


particular avoiding references to the negative image of the HME


industry which NAMES has fought so hard to dispel.


Should you or your staff have any questions on these


comments, we would be happy to discuss them with you at your


earliest convenience.


Respectfully submitted,


-\ ,/--

(A’’”+ 2“-’ 

Corrine Parver


President

Ml:!.?


HEALTHINDUSTRY 

DIS1”RIBUTORS 

ASSOCIATION 

BY HAND DELlVERY 

Se@emberQO, 1994 

225 Reinekers Lane, Suite 650 

Alexandria, VA 22314-2875 703-549-4432 FAX 703-549-6495 

IG 

SAIG


DIG-As 

DIG-E1 I/ 

DIG-01 

AIGCMA _ June Gibbs Brown, InspectorGeneral AIGMP 200 Independence Avenue, SW 

Department of Health and Human Semites OGC/Ic 

Washington, DC 20201 EXSEC ? 

DATESENT q 0 

Dear InspectorBrown: T


This letter containsour comments on the Office of InspectorGeneral’s dralt report on Oxygen


ConcentratorServices (July 19$4, OEI-O3-9I-O171O). Thank you for the opportunityto


comment, and we look forward to our continued dialogue on this report and other issues that


impact HIDA members.


L Introduction


HIDA is the nationaltrade association of health and medical productdistributionfirms.


Created in 1902 by a group of medical productsbusiness people, HIDA now represents more


than 1000 wholesale and retail distributorswith approximately2000 locations. HIDA members


includea broad range of health and medical productdistributors— billiondollar multi-location


nationalcompanies and neighborhoodstores, chains, and independents. HIDA members


providevalue-added distributionservices to virtuallyevery hospital,physician’soffice, nursing


home, clinic,and other health care site in the country,and to a growingnumber of home care


patients. We are writingon behalf of our members who provideMedicare Part B home oxygen


sewices to Medicare beneficiaries pursuant to a physicianprescription.


Il. General Comments


HIDA applauds the IG’s effortsto study the level of services supplierscurrentlyprovide to


Medicare beneficiaries receiving home oxygen therapy. We agree W-ththe IG’s findingsthat


there is a tremendous amount of inconsistencyamong suppliersin terms of the level of


servicesthey provideto their home oxygen customers. We therefore stronglysupportthe IG’s


recommendationto establish supplier standards. We believe that defining standards of


semice willresultin suppliersprovidingthe highestlevel of service and care to Medicare


beneficiaries. We also stronglysupportextending the standardsto non-participatingsuppliers


in additionto those who take Medicare assignment. The National Supplier Clearinghouse,


which receives informationabout all sup~iiers’sewices throughthe Form HCFA-192, is an


ideal mechanismfor establishingsetvice level requirementsfor suppliers. Attached are


Consensus Conference recommendationswe developed in 1992 to achieve this objective.


While we are very pleased at the progressive nature of the IG’s recommendationto establish


separate payment amounts based on service levels, we are unable to fully commit HIDA

supportto this recommendationuntilfurtherpolicyanalysis, and importantly,the administration 

(e.g. DMERC) implicationsare explored. The policyanalysis needs to consider patient 

outcomesdriven levels of service rather than only supplier company capability. While 

traditionallycompetitive market forces have caused high service levels balanced by regulatory 

drivenfee schedules, the emergingintegratedmanaged care markets are changing these 

incentivesand restrahts. Thus, any linkingof reimbursementto service levels needs to 

considerthe emerging operatingenvironmentfor home health delivery. 

[11. Specific Comments 

Althoughwe are generally pIeased with the IG’s findingsand recommendations,we have 

several specific commentswhichwe believe would improvethe report. 

On page 4, the last paragraph’sthirdsentence states that the IG consultedwith a “registered 

nurse with an extensive backgroundin pulmonarycare”for assistance with the report’s 

analyses. We questionwhether yourregisterednursewith a backgroundin pulmonarycare 

has the necessary qualificationsor experience in home care to evaluate home oxygen 

seivices. We believe itwould have been more appropriateto have consultedwith a health 

care professionalwith specifichome care expertise for a more accurate evaluation. The 

operating experience in an institutionalsettingis notthe same as experience in the home and 

is therefore not intuitivelytransferable. 

on page 5, the sixth paragraph,we questionwhy the organizationsthe IG met with are not 

listed alphabetically. We also requestthat HIDA’s acronym- HIDA - please be added after 

the spelling out of the Health IndustryDistributorsAssociationas is done with other 

organizations mentioned in the list. 

On page 6, the third paragraph describesthe nationalaccreditingbodies which establish 

service standards for home oxygen care. The last two sentences in the paragraph describe 

the number of supplierswho have maintainedJCAHO accreditationand the number planning 

to seek accreditation in the future. We believe more useful informationwould be the number 

of beneficiaries who were served by those supplierswho maintained accreditation. 

On page 7, the report neglectsto mentionHIDA’s recommendationsto the IG about supplier 

service standards. HIDA has recommendeddifferentlevels of standards depending upon the 

type of sewices the supplierprovides,such as basic standardsfor traditionalDME, higher 

standards for oxygen (e.g., respiratorycare), and even more stringentstandards for higher 

care patients on ventilatorsor those receivinghome infusiontherapy. HIDA continuesto fully 

supportthese standards and would appreciate mentionas suchin the report. 

On page 12, the repoti describesthe number of beneficiarieswhose supplierfailed to meet 

service standards set by the VA and AARC. The section shouldalso evaluate which suppliers 

whkh are JCAHO accredited failed to meet JCAHO setvice standards. 

On page 16, “PromotingStandards,’ the repofi recommends HCFA promotingstandards 

endorsed by several organizations,includingNAMES. To identifystandards, we believe a 

consensus process such as JCAHO is preferable to a narrowerindustrydevelopment such as 

NAMES. 

2

On page 16, “SettingMinimumRequirements,- the report describes several mechanisms to 

establisha minimumlevel of service requirementsfor suppliers. HIDA recommends that the IG 

considerthe National SupplierClearinghouse(NSQ as a mechanism throughwhich to 

establishservice level requirementsfor suppliers. All suppliersmust complete a Fom HCFA192 and submitit to the NSC. The form couldincludequestionsabout services provided to 

establish sewice level requirementsfor that supplier. Please see our attached 1991 

Consensus Conference recommendationsfor more details on supplier requirements. 

IV. Conclusion 

HIDA supportsmany of the findingsand recommendationsin ttis report. Unlike other items of 

durable medical equipment, home oxygentherapy is life-sustainingand therefore requires 

regular equipment and patient monitoringservices. Unfortunately,current Medicare policies 

have not recognized that services shouldbe provided,which has resulted in variation among 

service levels for beneficiaries. 

Home care dealers would benefit from supplierservice standards for oxygen therapy. Patients 

who depend on home oxygen therapy to functionwould benefit from a more consistent level of 

service rather than their random selectionof a supplier. HIDA supportshaving Medicare 

educate providersand beneficiariesaboutthe kindsof serviceswhich should be providedto 

home oxygen patients. HIDA suppofis promotingindustryservice standards and recommends 

that the NSC be used as a mechanismfor evaluatingwhich suppliers (depending on their level 

of care patients) should be requiredto meet whichstandards. Finally, HIDA supportsrequiring 

suppliersto meet accreditation,certification or licensing requirements. 

Thank you for the opportunityto comment. Please contact me or Cara Bachenheimer, HIDA’s 

directorof government relations,for further information. 

Sincerely, 

/’d. Wayn ay $T

CEO a reside 

.

Attachment 

K

Penny Thompson, OIG 

HCMG, HCGRTF 

Cara Bachenheimer 

Craig Jeffries 

3


cc 
EXECUTIVE SUMh4ARY 

1991 HIDA Claim Efficiency 

Consensus Conference 

(May 13-14, 1991) ! 

OVERVIEWO 

As thenation, and Congressional and Administration leaders focus on the costs of 

the health care delivery system and particularly the growth of Medicare expenditures, it is 

important to look for areas of inefficiency. One particularly inefficient area is the 

administration of third party claims by Medicae carriers, home medical equipment 

setice and long term care suppliers, and beneficiaries. 

The 1989 HIDA Home Care Financial Sumey reported that home medical 

equipment(llME)industry resources wereincreasin#y beingdiverted tiompatientcare


services to the administration
f thirdpaw clams. Moreover,the hl~h COS~of


administering thirdpartyclaimscouldnotbe reducedwithouttheactive
and focused


attention ad supportoftheHealthcareFinancing Administration
 (HCFA). Therefore


[he 1990 HIDA Claim Efficiency ConsensusConferenceideniifted
 key areasfor


improvement.


The 1991 Conferencerecognized theimportant stridescongressand HCFA made


toaddressthe1990recommendations, addressed further implementation issues
forold


issues, andidentified certain new issues. Importantly, legislationntroduced
 inthe102nd


Congresswillfurther theimplementation
 ofmany of the 1991HIDA ClaimEfficien~ 

ConsensusConferencerecommendations.


P~TRPOSE 

HIDA initiated the Claim Efficiency Consensus Conference to identify problem 

areas in claim processing and to recommend specific changes that will allow HME and 

long term care suppliers to operate more efficiently and reduce their costs of third party 

administration. The Consensus Conference recommendations also recognize benefits to 

HCFA and Medicare carriers through greater system standardization, accountability and 

enhanced communication. 

Finally and most important, the Consensus Conference recommendations highlight 

eme~ging risks to Medicare beneficiaries of not receiving needed HME services due to 

barriers or inconsistent interpretations created by the probiems in third party 

administration. 

The 1991 HIDA Claim Efficiency Consensus Conference recommendations are 

attached and reflect the discussion of the conference participants, recorded and drafted 

by workgroup leaders. The recommendations have been reviewed by a broad sweep of the 

HME services and long term care supply industry, including participants in the 1991 

conference, state association leaders and other industry representatives, and HCFA and 

General Accounting Office officials. Final policy recommendations emer~ed from this 

review and consensus process, and suggest cooperative action involving Medicare carriers, 

HCF& and industry. Some recommendations may be implemented administratively. In 

some cases recommendations may require Congressional consideration and legislative 

action. 
MAIOR RECOMMENDATIONS: 

Sur)r)lier Number Qualification and Review 

The HIDA Claim Efficiency Consensus Conference recommends that Medicare 

require SU pliers (through an application process) to meet national standard criteria for 

issuance o Fsupplier numbers, and periodically renew the supplier number. The standard 

criteria are intended to establish basic business standards that suppliers must meet (e.g., 

maintain inventory; FDA OS~ DOT compliance) and provide information suppliers 

would disclose to allow the carrier to monitor the supplier for potential abusive activity 

(e.g. telemarketing physician self-referraI). The renewal process would allow HCFA 

carriers and the Inspector General to more actively monitor changes in business practices. 

Beneficial Verification Svstem 

The HIDA Claim Efficiency Consensus Conference recommends a point of service 

system to allow a beneficiary to veri& his or her eligibility for Medicare services. his 

verification would include non-medical necessity elements, e.g., Part B eligibility, HIC 

number, address, MSP types. Such a system would be available to qualified suppliers and 

would be s;w~!~- to the verification svstem currently in use by.-hospitals under Part A- . 

ENIC Standardization lm~lementation 

HCFA developed a standardized electronic media claim (EMC) format in part 

based on the 1990 HIDA Claim Efilciency Consensus Conference recommendations. The 

1991 Conference recommendations address implementation issues to support I-lCFA 

carrierand suppliergoalsin achievingan EMC capabili~,includingsyst~rn~


standardization adequatecarrier supportsystems, crossover clams processing, que~


capability, standardization of EOMB messages, code and medicalpollcles­me

recommendations alsoaddress problemsofaccesstoEMC bysmallvolumesuppliers.


h’ational Standard Coverage and Utilization 

The HIDA Claim Efficiency Consensus Conference recommends the establishment 

of national standard Medicarecoverage criteria andutilization guidelines
 tocurbabusive

carrier
 shopping.


Carrier Consolidation 

The HIDA Claim Efficiency Consensus Conference reconfirms the 1990 

recommendation to consolidate the number of carriers to achieve better carrier 

management and carrier claim processing expertise on HME and long term care supply 

claims. 

Carrier Jurisdiction Rules 

The I-IIDA Claim Efficiency Consensus Conference recommends that claims must 

be submitted to the carrier with jurisdiction where the patient resides except that HCFA 

may allow carriers to exempt suppliers that semice patients residing within 60 miles of the 

carrier area, “snowbird” beneficiaries, and for other reasons with no potential for abuse. 

I-iIDAHome Care 

~ 225 Reinekers Lane, Suite 650 

Ala, VA 22314 

(703] 549-4432 
HIDA Claim Efficiency Consensus Conference 

Conference tiaders: Craig Jeffnes, HIDA 

Cullcn Murphy, Wasserotts 

Cara Bachenheimer, HIDA 

May 13-14, 1991 

WorkwouD To~ics 

insurance Verification 

Leaden: ha Thomas-Payne, Medical Reimbursement Systems; Jo~a 

Augst-Johnso~ Redline. 

Participants: Stephaniel%omto~ ADMEA, Dawn Wrigh~ Stein Medical;Tins 

Morrelh,HCF~ Melanie Combs,HCFA 

Carrier Performance; hfedicare Carrier Reform: Regional Carriers; Clean Claim 

Reforms, TAG. 

Leuders.- Lynn Snyder, Epstei~ Becker& Green;Tlm Redmor+ NARD 

Participants: Al Schnupp,GAO; Ann Berrim~ Ober,Kaler& Grimes;Susan 

Kladiv~GAO; Geraldine Wnuk, Buffalo HospitalSupply.


EMC/Paper Processing 

Leaders: Maureen Hanrq AbbeyHome Healthcare;QnthiaBendey,Homedco


Participants: Max Buffington, HCFA; Jim Kral,HCFA; CarolynI-Iarrk,
 ~lasIock;

GordonHilton,
 AbbeyHome Hea]thcare.


Supplier hTumber and Carrier Shopping 

Leadem: Rita Hill, American Home Patient Centers; Dan MoskowiK ASCO. 

Ptiicipants: JaneHerlocker, HCFA; Mike DeCarlo,
NAMES; CaraBachenheimer,

HID.4.


— 
KSDA ~NSENSUS CO~m 

May 13-14,1991 

TOPIC SUPPLIER VERIFICATION 

ISSUE 

In the r&dst of ever evolving media reports portraying negative HNfE sefi=, brought on 

in pan by the etistence of no bam”ers to entry to becoming an HME suppbe r, the I-ME 

Industry clearly reco-gnizes the need to’ move in the direction of licensure and wrtification 

to differentiate qualiiy and to consider other barriers to entry that establish basic business 

criteria. 

in’thecurrentenvironment, suppLier numbersareissued withlittle
 to no scrutiyof the


applicant’s basicbusinessqualifications. Addi~ionally,
 I+= companiesusuallyare Rot


subject tostate iicensurt laws,quality assurance s!andards orothersimilar criteria
 typically


rtquired ofhta![hor:atizations
 and professionals.


TRe following iecomnendations resulting from this conference focus on a iron: e:, d 

screening program to es:ablish baseline business s:zndzrds as prerequisites to en:r< Q;< 

involvement in the Sfedicare program. 

RECDMkZENDA’T’’fON: 

Recommended soIutions createdfrom a consensus
of[heworkgroupincludethefollo~in~:


Stated criteria which must be met to both become and remain q-d as an I-Lw 

supplier. 

The criteria, along Mti a brief explanation of how the info~ation ~ be uSc~~ 

should be available to all suppLier candidates prior to completion of an application 

for enroUmcnt in the program, perhaps in the form of a Supplier Qualification 

packet. The supplier will be asked to attest to the information in the application and 

compliance with all stated criteria by completion of the enrollmcntirenelval 

application. 

L 
HIDA CONSENSUS CONFEREN= 

May 13-14, 1991 

Page 2 

Suggestedcriteria forenrollment
areasfollows:


A	 No prior exclusions ‘horn the Medicare/Nfedicaid program as a result of civiI 

or criminal actions. 

B.	 CompliancewithaI.I applicable stateand federallicensure and regulatory


agencies. 

c. The supplier must maintaina physical
facihy, With both inventory and

personnel
on site. 

D. Proof of adequateproducdprofessiona] habiliry insurance.

E. 1~’ri[[tn r.~!ntenance and seniceproceduresand protocols.


F. \t”ritten yrsonnel/staffing standards and protocols. 

G. );’ritten procedures and protocols regarding record tmanagementH. Jf’ritten szfery and ir.fection control protocols. for both ernplo:ces ?fic 

patients. 

IL	 Re@d disclosure of information that will tit b carrier in mcmitofig for 

potentially abusive pmctia~ 

Suggested information disclosure includes: 

� Physician, hospital, nursing home owmership interests. 

� Type of producu and sewices offered. 

� Sales/Marketing inforrnation/practims. 

� Pricing practices/poliq. 
HIDA CONSENSUS CONFERENCE 

May 13-14,1991 

Page 3 

IIL	 A rigorous appli~tion to be dm.inistered uniformly for both ncw supplier 

applications a.s well as on an established renewal cycle. 

Recommended content for development of a standardized supplier application is 

included as Attachment A 

This application should be administered uniformly for all HME companies tha~ w+sh 

to become or remain a Medicare supplier. 

The Workgroup recommends that each approved supplier be required to reapply on 

a cyclical basis IO remain qualified for participation in the program. A minimum r~o 

vear renewal term is recommended for all suppliers, with the carrier maintaining lh.e ., rl~~iLto r~auir~ mare frequentren~wa]sfrom Se!tCI sup Dliers based on ~ h]g,n !C<.el 

oi abusive petiarrnance or alleged problems. a: Z[ the re~uest of HCFA or the OIG. 

Signed at:esta[:cn as to the accuracy and thoroughness of the submitted in formzt:on. 

as well as sier,ed ameement with stated critetia and conditions for appro~al. IS 

xcarnmended as an adjunct to the ,Applica:iori. 

W.	 Required vefication procedures to be performed routinely and u.n.i.fo-rrniy prior to 

approvzd of both initial and renewal applicauonsEqually as imponant as expanding the deiyee of information requued to becornt 

qualified as an I-HIvE supplier, verification of the submitted data is absolutely 

imperative. Therefore, it is recommended that minimum verification proc-cdures and 

protocols be established and compliance monitored to ensure validiry of the screening 

process. This proc-ess could be administered by each carrier, by a national contractor 

or by HCFA 

IdealIy, a system of cross referencing information among all program earners is 

recommended. A program like LJPIN “could be used for administration of Ihe 

application process on a national basis. 

Recommended minimum verification procedures are also outlined in Attachment A 

These procedures are not intended to be all inclusive and arerecognized(orequire


subjective
 rviewinsome cases.

--

HIDACO~ CONFERENCE


May 1314, lm 

Page 4 

It is recommended that consideration be given to mandatory on-site imqxction based 

on the level of negative or questionable responses which cannot be ve fied otherwise, 

or based on randorniy selected applications. 

Per the attestation section of the application, it is recommended that the applicant 

attest to their understanding that the can-ier (or other approval organization) has the 

right to require or perform on-site inspection at their discretion. 

The above recommended barriers to entry represent a first step in the direction of puri$ing 

the HME marketplace both in terms of legitimizing competition and competitors, as well 

as stabilizing the reimbursement en~ironment adverselv impacted bv. svswm . abuse. Coupled

perhaps with additional standards of quality and accreditation oppofiunities, the H>lE 

Industry will become postured among its counterparts within ~he healthcare system, to pay 

a recognized si-gtif!carit role in the future of healthcare delivery in this count~. 
:NO1.LV3CYl (lNV~WVt’J 

——. 

.. ....... . 

.. . ... .. 

LN3WVd03/ NOl.Lv31dll]ll A 
suI’1’LIEK VERIFICATION 

I IIDA CONSENSUS CONFERENCE 

May 13-14,1~1


R[;@MMENDED suppL]~R APPLl~TJON CO W1’l;Nl’ 

AND VERIFICATION PROCEDURES 

oTIIER CARRIERS BILLED: 

1.	 LA any o(hcr Mcdicarc carriers which arc 

currently billed [or any SCMCC..(include mm 

o[arricr, supplier number and primary i(cms 

for which (hey arc hilled). 

TYPES OF PRODUCX’WSERvlc=: 

1.	 Which of the following produc[.tiscticcx 

do you provide: 

Durable Medical Equipmcnl 

— Oaygcn 

—	

— Vcntilalors

_ Apnea Monitoring 

PEN 

— —o&P

2.	 A(c Mcdicarc Ilems ordered by Ihc bcncficinry 

prior 10 lhc prescribing physician’s prcscrip[iml’t 

If so, arc Ihcsc incxpcnsivc rcluil ilcms 

bought across the txn.mlcr? 

V[;RIFICATION /COhi MENT ................... ......... . 

Inquire (II C:ICII Iislcd ~rncr status of suppiicr performance and 

cl;till! Iypc I(I dc(crmincc ornpliancc with carricr jurisdiction rul~$. 

Cross rcfcrcncc cxch inrlicxtd prcxlucllscmicc [o: 

- subnlillcd hc-Jllh pro[cxional liccnsurc information. 

- c(mlpliancc will} sppli~~blc stale rcgulatoq’ rquirmcnLs, 

(e.g. [’DA). 

If rmptmsc i(idiCRIC$ bcncflciary 4Jlrcclcd order, mcxdlor 

for Irn)ssihlc lclcnmrkcling abuses. 
sljl’1’i,llil{ VL!I{II;I(X’I’ION 

111I)A CONSENSUS CONF13RI?NCE 

May 13-14, 1~1 

I{i.XOMMENDED SUPPLIER APPLICATION CO N1’I;NI’ 

AND VERIFICATION PROCEDURES 

v[IRIFIMTION /COMM~~ —............. ......... 

SALES/ MARK~ING: 

1. Arc ph@ians, nurm, IhcrapisLs or Dcfcrminc il na(urc O( rnarkcling slralcgy needs [o be 

bcncficiancs used for markcling purpose..? m(milorml for possible abuse. 

If yes, describe. 

2. If Ihcse individuals provide markcling 1[ rc.slxmsc is Iwrccrilagc hmis, warranls a(ldiliorml invcsligalion 

scMca under coniract, how arc lbcy 01](1Ill(l(lil(ltllll: 

compensated: 

% of Revenue gcncraid 

— % of Collections on Rcvcnuc gcncrntcd 

— Flat Fcc (NoI rciatcd to referrals) 

— 

— Olhcr (pieasc dwcribc)

3. Do you conduct outgoing solicitation to : 1( bcncfi~iilri~$, review wriltcn guide [or inappropriate ICIC. 

rnarkcling pr:lclica (Waiver ofconinsurancc, 

Bcncficiark � n(ln. mcdic:ll nccwsily, clc. ) 

~ Physicians 

— Other Referral Sources

* If yes, please submil a copy of your wril[cn 

soliciladon guide. 
S{ JI’I’LIER VIWII:l CA”~lON 

I{ IDA cONSENSUS CONFERENCE 

May 13-14, 1991 

~p~MMENDED SUPPLIER APPLICATJON CON~l!Nl” 

AND VERIFl~TION PROCEDURES 

4.	 For c-ach salm rcprc..cnlalivc cmployc-d, 

please indicalc: 

- Name and address. 

- Tclcphonc number where can !hcy can bc 

rcachcd. 

- As.signed branch. 

. States served. 

5,	 Arc orders roccived and proccsscd oulsidc O( 

Ibis carrier jurisdiction? 

6,	 Arc sales made through calalogs to 

bcncficiarics outside Ibis carrier 

jurisdiction? 

a. Do you dcllver lhc.sc products from this 

supplier address? 

b. Do you subumtracl with another supplier 

fur delivery of these products? 

VERIFIGITION /CO Mhi E~ 

.. ..... .... .-... ...-— 

(M;ty IN’ IIMJ llurdcnsonlc 10 monilor IllIS) 

.Scc t)cll)w. 

If ym, review claim submission practic~ wilh mulli@c Urncm 10 

dc(crminc compliance wi[h carriem jurisdiction rules. 

. . 

1( yrx, w;lrr:lnls additional Invdga(lcm 10 dclcrmlnc valldily of 

su[lldicr l)illil)~. 
SUI’I’I. I[llL VERII;IWI” ION


II IDA CONSENSUS CONFERENCE


Msy 13-14, 1~]


RKOMMENDED SUPPLIER APPLICATION CO NTl~N’1” 

AND VERIFICATION PROCEDURES 

PATllZ~ SET’-UP/DELlVERY 

1.	 Indicate information given to the bcnctlciary 

prior to or al Ihc lime o{ delivery: 

Teaching and (raining malcrials. 

— COntracls(adng [crms of rcn(al or 

—	 purchase. 

Patient Bill of Riglus. 

— Emcrgcnq contact proccdurm. 

— — Olhcr (please specify).

2. How arc benclkiary signatures oblaind: 

in person — over the phone 

— by mail 

—	

— olhcr (please explain)

3, How are products dclivcrcd 10 bencficiarics: 

commercial or U.S. Poslal scMcc 

~ company delivered. 

_ pickd Up by bencficia~. 

4,	 Who u)mplelcs mcdicai mxxxsity Information 

on the Cxrtificatc of Mtxlical Nccmsity: 

physician or agcnl. � supplier. 

— o!hcr (picasc cxpiain),

5.	 Hmv long arc palienlJlransaclion spczific 

r.locumcnlsrclaincd? 

...----- ........... .......—— 

Ivlwsl h:Ivc WrIllCII poiiciti. 

W;irr~n{s [urthcr invcs(igatbrr if over [he phone. 

Usc inf[)rnl;lliwl to idcnlify p(crrtial earner jurisdiction 

isslJc.$. 

The corrccl rc.sponsc. 

Supplier II(M acccpInblc, (Refine based on currcrrl earner instructions) 

Suspccl . il}vc.sliga[c, 
sIJPPLIIIR VERIFICATION 

II IDA CX)NSENSUS CONFERENCE 

MJy 13-14, 1~1 

RECOMMENDED SUPPLIER APPLICATION CX)W”I{NI’ 

AND VERIFICATION PROCEDURIH 

PRICING: 

Arc Mcdicarc and non-Mcdicarc palicnL$ 

charged [hc same for idcnticd scrviccs. 

If no, explain 

Do you inform the bcncllciary of his/her 

responsibility for coinsurance? 

a, Is this communication wrillcn or verbal? 

b. When dots Ibis communication occur? 

Do you have a Wril[en proccdurc 10 review 

the bcncficiarirx$desire 10 waive coinsurance? 

Pcrcznlagc ofcoinsurancc waived over lhc pwd 

IWCIVCmonths (for renewal applications). 

Do yuu have a syslem in place 10 ndjusl 

billed ulillzallon to actual ulilizz[ion 

for disposable supplies? 

vI; RI FImTION /COMMENT ......-—..-.............-. 

1[ rrspwlsc IS II{), invcsligatc 10 ensure govcrnmcn[ is not charged 

more. 

If no, indi(-:llc.s nofl compliance, 

Require wrillcn proccdurc, 

Exccssivc pcrccnlagc warrants invcs(igalion. 

1[nl)l, C:irmt)[ rcccivclmainlain suppllcr number. 
sl)l’1’1,1~~1 VBRIFICATION 

III1)A CONSENSUS CONFERENCE 

May 13-14, 1~] 

R~IM~ENDED SUPPL[ER ~pL[mT10t4 coffl’~~1” 

AND VERIFICATION PROCEDURES 

vliRIFl(%TION /COMME~ 

.-- .................. .. ... 

OWNERSHIP: 

1. ~ 0( Business 

Corporation 

— Parmcrshifr 

—	 — SoIc Propnclorship

2. Ifincorporaled, DaIc and SIatc of Incorporalitm Verify wi{h ;IfJl~lIc:IIJlcstn[c. 

3. Federal Tax Idcnliflca[ion Number Vclify willl ;[l]~dic:lblc govcrnmcn[ agcocy, 

4, Hosphal based or afliliatcd? 

5, Was company purchased? If so: 

a. Were the rweivables purchased. 

b. Name of the former owrrcr(s). Cross rcfcrcncc 10 OIG or @her appkablc databases, 

c. Former name of company and addr=. 

d,	 Indica{c c8rricrs billed with corresponding Ir)quirc M I(I supplier Pcrformandalanding. 

fwovidcr numbcmo 

Please provide a complclc lisl of company Cr(tss rc(crc[~ccwi(h applicable gcrwmmcrrl agcocics, o(hcr 

OITrccm,with corresponding .Social!kzuri!y c;lrlicrs ;IIId OIC~, 

Numbcm for each. 

6 
SUI’I’I.I13R VERIFICATION 

III13A CONSENSUS CONFERENCE 

May 13-14, 19’$J1 

RIIcOMMENDED SUPPLIER APPLICATION CONTII~l” 

ANU VERIFICATION PROCEDURES 

7.	 LA lhc names of each owner, partner or 

olhcr inrlivjclualwho has a financial irrlcrcsl 

in Ihc company. 

a, SIalc the exact nalurc of Ihc irrlcrc-slcoch 

individual holds (e.g. stock, loan), 

h.	 Idcnlify any oflhcsc individuals who is 

or has been a provider of Mcdiurc 

Scticcs. 

- Indicalc exact name and address of Ihc 

provid~r. 

- Indicate the provider numbers under which 

each operates or has opcralcd. 

8, Have any of the following individuals been 

VITRIFICATION / COMMENT 

.. ....... ...... .... ......-——— 

Cross rcfcrcncc 10 OIG or olhcr applicatrlc source. 

W;lrr;lnls invcslign(ion. 

the subject of any civil or criminal action 

with rcspxt 10 scmices billed 10 Mrdicarc, 

Medicaid or’any othcf lnsurancc company? 

— any of UIc Ofllc.cm tis{cd above?

any oflhc Owners, partners or olhcr —. individuals having a financial irr[crcst 

Iistcxlabove? 

any rclalhwa of the Chyncrs, parlncrs or 

‘olhcr individuals having a financial 

inlcrc5t’listal-above? 

_ any cmployccs of the comfmny? 

_ any contract thcrapisls, nums or 

pharmacists? 

I(ycs, provklc cxplanalionl 

II 
sol’1’[.11~1< V~Rli71CA”l’10N 

1I IDA ~NSENSUS CQNI:ENENCE 

May 13-14, 191 

RIKOMMENDED SUPPLIER APPLICXTION CONT1lN1” 

AND VERIFJ~TION PROCEDURES 

(), l[lhc company is rclalc(l (bytmmmon ownership 

{lr managcmcnl) 10 any other organ i7~(ior\ (hi)! 

is also a frruvidcr O(Mcdicarc scrviccis, 

identify: 

n . cxacl name and addrms 0( rclwccl 

organi7,alion. 

b,	 relationship 10 lhc company and [trc 

nature of Medicare scrvicm Ihey provide. 

c.	 name of the Medicare contractors that 

arc billed and the provider numbers used 

for [his purpsc. 

10.� USI name, specialty and liccnsc number 

of any physician, [hcrapisl or other 

Ikcnscd practitioner who is an cmploycc, 

o[kcr, or who has an owrrcrship interest 

in Ihc company, S[a[c cxacl function. 

Il.	 M name, spcdahy and Iiccnsc number 

of any physician, lherapist or other 

Iiccnscd praclilioncr who is used on ii 

consultingkxmtract basis. Spify cxacl 

[unclion, 

vERIFICATION/COMMENT 

...---- ..-----..------— 

Crms rcrcrcncc 10 OIG or o[hcr applicable da[nbascs used 10 

ltl~ulilllr In)(cnli:ll ahusivc rc[crrals,


(bl I151~l($lilt(” “(~II IImr In owmcrship (]r m3nagcrrlcnl”).


Cross rcfcrcncc to OIG or other appl.icablc dalab-.


Monitor for po(cnlial abusive referrals.


Sh:irc inf[lrn~a[iorl ob[aincd wilh OIG as applicable. 

c’ross rcfcrcnu! 10 OIG or cxhcr appkablc da[abiucs. 

M(mil(jr (I)r polcnlinl abuslvc referrals. 

Sh;tru in(or(ll;i[l(m ob[nincd wilt] OIG M appkablc. 
J

SUf’1’Ll13R VERIFICATION


IIIDA CONSENSUS CONFERENCE


May 13-14, !W1


RECOMMENDED SUPPLIER APPLICATION CONTENT’ 

AND Vf3RlFf~T10N PROCEDURES 

{) PI?l{ATIONS: 

1. Is your company accrcdilcd by: 

JCAi-{O? 

“ CliAf’? 

— 

‘“ 01hcr7 (please specify.)

Date of accrcditalion: 

2.	 Do you have writlcn Quality Assurance < 

pro!.ods and proccdurc$? 

-. Is Ihc company in compliance with all 

applicablestale arid federal rcgulalo~ 

requirements: 

DOT 

— FDA 

— OSHA 

— — O[hcr, as appkablc

4.	 Dots [hc company own producl invcnlory. 

1{no, please dcscribc your arrangements for 

producI distribution. 

5.	 Are personnel onsi(c at ihc supplier addrms 

during statal hours of opcralion? 

‘1 If no, plasc explain. 

vI; I{ IFIcATION /COlV4MENT 

-. —.- ....... .. . ... ... ..—. 

[( yes, (I IllI}WIII~ (~uu.$tions warrfint Iil[lc review. 

Must how. 

Cross rcfcrcncc 10 producls4scrvicm 10 dc[crminc applicable 

rcquircmcnts. 

Verify ~mit)lc mm-compliance with applicable slate or [uleral agency. 

If N(I, will II(JI qunli(y [or suppllcr nurnbcr. 

l(m), will II(1I qu:lli(y [or supplier number. 

ii 
sU1’1’Ll13R VERIFICA”[’ION 

tll DA CONSENSUS CON1713RENC13 

May 13-14, 1~] 

REcOMMENDED SUPPLIER APPLIWTION CO NT[?NI’ 

AND VER1FICATION PROCEDURES 

6,	 Do you prcwidc (directly or by contracl) 24 hour 

cmcrgcney Iclcphonc reqmnsc scrvicc? 

7.	 Dots [hccompany have a wrillcn policy 

regarding patient righls and responsibility? 

$+.	 Doa Ihc company have wrillcn infcclion 

conlrol promcols ([or bo[b cm ployccs find 

pa{icnls)? 

9.	 Doe.. Ihc company have wrillcn main[cnancc 

and scticc protocols, including (raining of 

SCMCCmchnicians. 

10.	 Dm Ihc company have willcn personnc~ 

staffing standards and promcols? 

Il.	 Does Ihc company have Writ(cn pro{ocds and 

procedures regarding record marragcmcn$? 

PLIW3E A7TACH COPIES OF: 

1.	 Currenl Professional Liccnsc for each 

hm]lhcarc employee or conlrac{or. 

2 Pharmacy ticcnsc, if applicable. 

.

3. Occupational L.iccnsc, if ilpplkqblc, 

4,	 Certilicalc of Producl/i’rofc2ssional Liabiiily 

Insurance. 

vllRIFl~TION /COMMENT 

-..-.-—- ---------.-—----

Required. 

Required ~ilmc polidcs do no! gcl reviewed by Ihe 

cxrncr, as in accrulita{ion, bul any businas 

requiring it Mcdicarc supplier number must 

I<(”qllltt”d. have Ihc..c wriltcn policies in place. Such 

wrillcrn policy could bc used in a IaWuil IO 

c.si;itllish Ihc slnndard Ihc company should 

Il;lvc IllCl). 

l{cquircd. 

Required. 

Required. 

Cross rc[crcncc 10 produclshcn’ices to ensure all appUcable are 

in pl:lcc. 

Vcri(y Slnndinr wi(h slalc board. 
S~Jf’f’l.liX VERIFICA’I’ION 

t{l DA CONSENSUS CONll?RilNCU 

May 13-14, 1991 

RE@MMENDED SUPPLIER APPLICATION CO N~[; N_f’ 

AND VER[F’l~TION PROCEDURES 

vi2Rl F1(XT10N/ cOMMENT 

-— —.-— .-----------

SIC) NATURES / A77’ESrATION 

1. Owner/Prcsidcnl name and signa[urc, 

2. AllQlalion sta(cmcn( 10 include: 

a.	 undcrs[and all information will remain 

confidcn[ial. 

b,	 understand some or all of the information 

provided w’11bc verified by lhc umicr, 

both prior 10 issuance of a provider number 

aswell as on an ongoing basisasdccmcd 

appropria(c. This mayincludeonsilc 

inspection. 

c,	 altcmalion that information provided is 

accurate and complctc. 

d.	 understand Ihal an updated appiica(ion is required 

whhin 60 dap if change in ownership or for addi!ion 

of products acMcc$ no{ includd on initial or mos[ 

rcccn[ application. 

c.	 undcrs[and lhc suppiicr number mny bc suspended 

or rcpealcxi if false information is provided. 
--

--

10/04/’94 08:39 S41O 966 5305 EES OIG OAS ECFA @oo2/oo2 

Se@mber 26, 1994 

. 

Ma. l?enllymmmpson 

-of Inspector GeLk?nd 

Wallkon & ImqXctions 

K of M& Human sWkcs . . 

6325 Security Blvd., k- 1-D-MOM 

Baltimore, Maryland21207 

13e4UM6wTbOmpaorl: 

Thankyou for sendingus an advancecopy of the &d C)IGreport on oxygen services. We 

sent it to our membexswho manufactureoxygen products. Our commmts are as follows: 

1.	 I%ge 1- Changelibsupporting to su@xnental oxygen(m ~W- OXYWI 

comdmtm ameousidefed non-l@ support dev-im bytheFDA theydo pm* 

OXY= 

2.	 Page 16- Under “Establishing minimum -ems” section, H(2FA may want to 

takeinmaceouot use of oxygen c mmenmtbn status Indieatocs (Osq. Two 

stsmkds (ASTM 1464-93 and ISO 8359) will/do mquke the use of 4XSI’S on all 

concentrators, This may be a minimumrequircmcnt, so that absent m OCSI 

mimhmemcnt foraconcemramr would bek3sthan forth0seuni@ soequippd. 

Plcasecallm cifytmhavcan yquestions cmmxnkg these comments. 

Sincas.i!. 

Marcia Nusgart, R.Ph. 

IM3ct.or,Homo CaIU 

MN/bcj 

Health IIMUSIIY MSIUIfaCMWS ~ 

!200 G STREET. N. W,, SUITE ~oo 

w66HINGTDN, o.c. “2aoa5-ta14 

(20Z) 7es-0700 

FAX (202) 7e3-s750 

., 

‘t 
4P AMERICAN ASSOCIATION FOR RESPIRATORYCARE 

~1030 Ables Lane, Dallas, TX 75229, 214/243-2272, Fax 214/484-2720 

October 3, 1994


June Gibbs Brown


Department of Health& Hiunan Services


OfEce of Inspector General


5250 Cohen Building


330 Independence Awmue S.W.


Washir@q DC 20201


Dear Inspector General Browm


The American Association for Respiratory Care (AARC), a professional association representing

37,000 respiratory care pracl.itioners (RCPS), has reviewed the draft of the Inspector General’s (IG)


repoti “Oxygen Concentrator Services”.


The AARC has, over the years, umsiskntly stressed the critical importance of providing support 

services, in partiouhu patient asseasmm as a key compormt of home o- therapy. We are 

gratifd that the IGs report has reached the same conclusion. Inoonsistenaes in providing support 

services among suppliers can no longer be permittd. The number of patimts requising home oxygen 

therapy is increasing and will continue to inorease as the population agea. l%e advancements in 

medical technol~ coupled with the financial pressures on hospitals to discharge pulmonarycompromised patients earlier results in a more fragile patient receiving oxygen therapy in the home. 

COMMENTS: 

while the AARC supports the recommendations of the IG’s repo~ we are concerned about the 

methodology used in constructing this report. The sample size is very small, i.e., only 244 beneficiaries 

out of 220,371 oxygen therapy patients were surveyed. Such a small sample size could affect the 

statistical validity of the report. Furthermore,no mentionwas made of the geographicaldistributionor 

the “type”(i.e., national &a@ small independmtbusiness,respiratoryonly,home infbsi~ etc.) of the 

183 suppliers used within the report. l%eae types of variations have an afl?ecton survey outcomes and 

data cokctkm. We note that the report acknowledgesthat 1991 data was used and stipulates that 

“concernedorganizationshave implementedimprovedstandards of care since then”. We believeM 

that point should be fkther emphasi~ simply for the fact that so much change has mxurred over the 

last three years in the home health care arena. We are also concerned that broad comparisons are made 

betweenthe Veteran Administration’smethodof providinghomeoxygentherapy and the way Medicare 

program provides these services. Perhaps, the differences between the two programs should be 

emphasized. 

Inthe ExecutiveSummary,respiratorytherapy is incorrectlyreferencedon Page i, paragraph 5, the line 

reading “...life smtaking resoiratorv theraDyfor patient...”. The term “oxygentherapy should be 

substituted. Respiratory therapy compromises more than just oxygen therapy, and can include, but is 

not limited to, such therapies as chest physiotherapy, mechanical ventilation, and aerosol therapy. The 

same incorrect reference is made in the introduction on Page 1, paragraph 5. 
. 

June Gibbs Brown


Office of Inspector General


Page Two


October 3, 1994


Page 13- Third paragrapk last line- “cred4aUing” is misspelled. 

Page 16- Item #1 - we would urge you to specifically ackmvvledge the AARC, along with the 

references to JCAHO, CHAP, and NAMES. Much of the standards these organizations developed were 

based on the AARC’Sstandards. 

A key elemtmt in the education and clinical tdng of a respiratory care practitioner is patient 

assessmeart. RCPS are the only profeasiomds trained in all eiements of respiratory care diagnosis, 

treatmen~ and therapy. Patient assessment of the home oxygen patient is an integml component in the 

delivery of proper therapy, as well as a safkguard in assuring only the appropriate equipment and 

services are rendered. 

The FDA classifies home oxyg= therapy equipment and related accessories as kgend devices. 

Aaxdingly, home medical equipment (HME) providers must have a valid physician’s prescription prior 

to dispensing such equipment. A device requiring a physician’s prescription would likewise require 

consistent and systematically planned follow up to redum the likelihood of compromising the patient’s 

health and/or life through misuse or non-use. \ 

Perhaps, another avenue in reaching the goal of enhanced patient services for home oxygenthqY 

would be to amend the curmt Medicare certificates of medical necessity (CMN) for OXB by 

requiringmore patient assessment procedures. 

It is apparent to us that inconsistencies regarding appropriate patient services for home oxygm patients 

will abound until minimum service standards are required by Medicare. It is inherently unfair and 

medically unacceptable for Medicare beneficiaries to be placed in a situaticm where critical oxygen 

services are left strictly to chance. 

The AARC strongly endorses the recommendations proposed in the K+% repo~ “oxygen Concentrator 

services”. 

Sincerely, 

Deborah L. Cullq EdID,RRT 

Presid~ AARC 

DLC/jr