Faye Donovan uses oxygen. Several months ago she received a notice about changes Medicare has made to her equipment coverage. Because her oxygen company continued to provide services with no observable changes she simply filed the notice away, and she never thought to tell her daughter. Now she has a problem.

Fay usually spends the winter in Florida, and she always travels to her daughter's Oregon home for the summer months because she has difficulty breathing in the hot, humid sumer Florida air. This year, because of the Medicare changes to oxygen coverage, she may have to stay in Florida.

Beginning on January 1, 2009 Medicare has mandated that oxygen suppliers will receive 36 monthly rental payments for providing patients with equipment, supplies and service. However, they must continue to provide this equipment and necessary supplies to the patient for up to an additional two years without additional reimbursement, for a total of up to five years.

Medicare's reasoning appears to be that during the first 36 rental months, the oxygen supplier has received the equivalent of 60 months' (five years) rental payment. They must, therefore, provide the additional two years of equipment, supplies and service at no additional reimbursement.

At the end of five years, which is the expected life of oxygen equipment, the rental agreement is terminated and the patient can start fresh with either the same provider or a new provider for a new five year period.

Medicare will continue to pay for liquid or gaseous oxygen delivered in tanks beyond the 36 month period.

Medicare will pay the provider for a routine maintenance and service visit every six months. Because the oxygen equipment supplier owns the equipment, Medicare will not pay the supplier for the cost of repairs to the equipment. If equipment must be replaced, the supplier must replace it with the same or a similar make and model at no charge to the patient.

So why does what seem like an internal payment change affect Faye when she wants to make her annual summer pilgrimage to Oregon?

Faye has a contract with a local Florida oxygen provider. That supplier must provide services and support her oxygen equipment needs for five years. Unfortunately, her Florida supplier does not, and can not, provide services in Oregon. Because she has a contract with the Florida provider, Medicare will not permit her to have another contract with an Oregon supplier.

According to the rules, her local provider is supposed to locate and negotiate with an Oregon provider to "cover" her oxygen needs while she is there. Because of the financial liability, Oregon suppliers are reluctant to enter into any deal where they might be financially on the hook for replacing equipment or providing services for which they may not be reimbursed.

Thus far, Faye has not been able to locate an Oregon oxygen provider to willing cover her short-term summer needs.

What You Need to Keep in Mind About Medicare and Oxygen

Set aside the notion that this new Medicare oxygen regulation is not in the best interest of either the patient or the oxygen supplier. We agree, and we fervently hope that someone comes to their senses soon and re-writes it. In the mean time, here's what you need to keep in mind for your elder who needs oxygen, or who may need oxygen in the future:

1. Choose a well-established, well-known oxygen provider who is most likely to stay in business. If your supplier goes out of business after receiving payment for three years, you will be hard pressed to find a supplier to pick up the two remaining years for NO reimbursement. That would be business suicide.

2. If, like Faye, your elder travels for longer than a week or two, try to find a national provider who offers oxygen in both or all of the places your elder visits. That way the same company just picks up at the new address and you won't have to search frantically for a secondary supplier.

3. If your senior will be permanently relocating, be sure you have a new provider lined up before the move. It may take longer than you anticipated.

4. Medicare says that if your supplier is not complying with these new laws, you should give them a call at (800) 633-4227). However, if travel is involved, don't expect a quick resolution.

Here is Medicare's rather over-optimistic explanation of these changes (pdf)