Sherri Hiseley, co-owner of DME provider Medic-Aire Inc. on West Okmulgee Avenue, said the first wave of impact will be felt in only six months.

“Anyone on oxygen on or prior to January 2006; that was day one,” she said. “Medicare will pay 36 months and then cap at the beginning of 2009.”

And the effects are already being felt in how Medic-Aire does business.

“We’ve had to turn people away because we can’t afford to take on someone who is about to cap out,” Hiseley said.

RespiratoryMgmt.com published a data analysis conducted by Avalere Health that shows impending cuts to Medicare’s home oxygen benefit are much deeper than anticipated, totaling $710 million in 2009 and $855 million in 2010. The reductions in funding — which amount to an 18.8 percent reduction in the reimbursement rate — are the result of changes brought by the Deficit Reduction Act of 2005 and the Medicare Modernization Act of 2003, and will affect a significant portion of the more than one million Medicare beneficiaries with chronic lung disease who rely on home oxygen for health and independence.

The analysis shows more than 1.4 million Medicare beneficiaries will be impacted by the changes, amounting to approximately a $325 cut per patient.

“When you consider these cuts in a historical context, the severity is particularly significant,” said John Richardson, of Avalere Health, and one of the analysis’ authors. “Not adjusted for inflation, the average Medicare home oxygen payment by 2010 will be almost half what it was in 1997.”

Hiseley said only last minute action by Congress could halt what is about to happen. She is disappointed in the government’s decision-making process.

“I’ve seen this happen in our industry; the government never does their homework,” she said. “Our industry is only two percent of the budget for Medicare.”

The AAH agrees with that, saying the Durable Medical Equipment sector represents about 1.7 percent of the $400 billion-plus in total Medicare spending and is the slowest-growing sector in Medicare. There was 3.8 percent growth in Durable Medical Equipment spending from 2005 to 2006 (the latest year for which figures are available), compared to 19 percent growth for the entire Medicare program spending during the same period.

Additionally, according to a December 2007 survey of 1,000 adults by research firm Harris Interactive, Americans overwhelmingly prefer to receive home-based care over that delivered by nursing homes and other institutions. Moreover, three out of four (74 percent) Americans agree with the statement posed by the survey workers, “Homecare is part of the solution to the problem of rapidly increasing Medicare spending for America’s seniors.” That result is consistent across Democratic and Republican party lines and across age groups.

Hiseley said she is dismayed at the apparent lack of research in the federal government’s decision making. She can’t understand why such a small portion of the health care industry is being hit so hard.

“Somebody in the government just got the idea that we were making a killing,” she said. “There have been three cuts in our payments during the past 11 years. We get a set amount of $180 a month. It doesn’t matter how often we have to go out. We’re available 24 hours a day.”

Hiseley said that even from an accounting perspective, the numbers don’t work.

“It doesn’t add up in terms of dollars and cents,” she said. “It costs $2,000 a year to provide a geriatric patient with oxygen, but if they don’t get it and have to go to the hospital, it can cost $2,000 a day.”