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Medicare: Home Oxygen Program Warrants Continued HCFA Attention

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Report Type Reports and Testimonies
Report Date Nov. 7, 1997
Report No. HEHS-98-17
Subject
Summary:

In fiscal year 1996, nearly 480,000 Medicare beneficiaries received supplemental oxygen at home at a cost of about $1.7 billion. GAO found that Medicare pays about 38 percent more for home oxygen supplies than the competitive marketplace rates paid by the Department of Veterans Affairs (VA). In some cases, Medicare obtains even fewer oxygen benefits despite paying higher prices. The Balanced Budget Act of 1997 includes provisions that should bring Medicare's reimbursement rates more in line with the competitive marketplace rates paid by VA. The act also requires developing service standards for home oxygen suppliers that serve Medicare patients, as well as monitoring patient access to home oxygen equipment. However, concerns have been raised that these rate reductions could reduce Medicare beneficiaries' access to portable units, which do not offer suppliers the attractive profit margins associated with lower-cost oxygen concentrators.

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