HCFA will immediately begin developing a rule to allow Medicare carriers to reduce excessive bills for home oxygen concentrators for beneficiaries, Administrator Bruce Vladeck said.
Mr. Vladeck pledged to develop the new rule during a hearing before the Senate Appropriations Committee's HHS subcommittee, at which HHS Inspector General June Gibbs Brown released a report detailing waste and inadequate service of oxygen concentrators issued to Medicare beneficiaries.
Medicare now pays an average of $280 a month to rent home oxygen concentrators for more than 200,000 Medicare beneficiaries, more than 21/2 times the $107 a month the Department of Veterans Affairs pays.
Sen. Tom Harkin (D-Iowa), chairman of the subcommittee, pressed Mr. Vladeck to take regulatory action to reduce the government's payments for oxygen concentrators. In 1994, Medicare paid $750 million to lease the home oxygen machines to people with lung disease.
Mr. Harkin said instituting adequate reforms could save about $300 million a year.
Mr. Vladeck, however, initially resisted. He said developing a rule to allow carriers to reduce the rental payments would take too long and asked instead for legislation that would allow HCFA to take quicker action. In the end he agreed to Mr. Harkin's request.
Mr. Vladeck said it could take 18 to 24 months to implement the new rule.
He also sought authority to seek competitive bids from suppliers of the oxygen devices, as the VA does, in order to keep costs down and quality high.