New rates fuel ‘engine’ of HME industry

YARMOUTH, Maine – An increase in oxygen reimbursement is a shot in the arm for the HME industry, say providers.

CMS in March released an updated fee schedule for oxygen that will result in an increase in fee schedule amounts ranging from $6.72 to $8.19 in former competitive bidding areas; $5.17 to $5.43 in other non-rural areas; and $4.14 to $6.82 in non-contiguous and rural areas, according to the VGM Group.

“This is a big thing for our industry, and it needs to be celebrated,” said Josh Britten, owner of BritKare in Amarillo, Texas. “With this first step, we can hopefully regain our industry.”

The updated fee schedule was in response to a COVID-19 package, passed in December, that removed the budget neutrality requirement for oxygen therapy in rural areas.

Britten sees the reimbursement increase as potentially fueling new growth in the HME industry, something he says is sorely needed after the past several years of business closings due to competitive bidding, audits and heavy consolidation.

“We need to have more young people get into the business and if you are looking at starting up a DME, oxygen has been the engine that supports the one-stop shop,” he said. “Every industry needs that engine.”

The removal of the budget neutrality requirement, which the industry had long fought for, is a hopeful sign that the HME industry is finally getting its due, says provider Josh Marx.

“It’s encouraging and it shows that the work AAHomecare is doing, along with some of the other groups, is paying off,” said Marx, vice president of business development and managing director for sleep at Cleveland-based Medical Service Company. “We certainly have earned some street credit over the last 12-plus months.”

In the day-to-day, the reimbursement increase provides breathing room, says provider Robyn Parrott, whose territory includes both rural and non-rural areas.

“Every little bit helps – it’s better than cutting more (services),” said Parrott, president of Detroit, Mich.-based Sleep Solutions. “In oxygen, the profit margin is so small we really have to stay tuned into it.”