For years, the home oxygen industry has failed millions of Americans who struggle to breathe in many ways. Lincare, the nation’s largest distributor of respiratory equipment, has a long history of helping Medicare and seniors, as ProPublica revealed. Philips Respironics hid serious problems with its sleep apnea devices, with devastating consequencesincluding reported deaths. Other major respiratory companies have paid multimillion-dollar settlements for fraud.
But as the current session of Congress draws to a close, advocates for oxygen patients – in a at first glance, an incredible union with the companies that have fallen victim to them – are making the final push for a bill that, among other things, would pay the scandal-damaged industry hundreds of millions of dollars more than it currently receives. The patients, many elderly and sick, besieged the lawmakers meetings, calls and emailsforcing them to pass the Supplemental Access to Oxygen Reform Act, or SOAR, by the end of the year. Advocates for corporations and patients vow that if the legislation fails in the current deadline, which seems likely, they will push for its reintroduction next year.
The SOAR Act would accomplish two long-awaited goals for an industry that receives a significant portion of Medicare revenue. The bill would protect companies from further cuts to their bills by taking the oxygen out of Medicare’s competitive bidding program, which has saved taxpayers hundreds of millions of dollars. And it would make it much more difficult for the government to challenge those accounts.
Patient groups, in turn, have their own goals: improving the industry’s notoriously poor service and ensuring access to expensive liquid oxygen for a relatively small group of the sickest patients. This form of oxygen is desired by patients with advanced lung disease because it provides the high flows they need in portable cylinders that last for hours. Emotional accounts affected patients who cannot get the equipment they need were prominent in the lobbying campaign for the measure.
“The current situation is pretty dire,” said Susan Jacobs, a pulmonary research nurse at Stanford University Medical Center who has been studying access to oxygen therapy for more than a decade and supports the legislation. “Patients are not getting the oxygen devices they need, are not being trained and are not being trained to use the device. The SOAR Act addresses several issues.”
Jacobs and other advocates acknowledge a history of bad behavior by oxygen companies. “I used to feel like they were enemies,” Jacobs said. Added Erika Sword, assistant vice president for national advocacy at the American Lung Association, another SOAR supporter: “Some companies have been very dishonest when it comes to taxpayer dollars.”
But patient advocates are now backing the industry’s long-standing complaints that cuts to Medicare payments have gone too far. “I’ve seen that over the last five years or so,” Sward said. “They are not paid enough at the competition. … I have full faith that providers are negotiating from a very good-faith perspective for patients.” She added: “Until everyone is willing to compromise, nothing will change. It’s clear they have a financial interest.” (Sward said the American Lung Association receives no funding from oxygen companies or trade groups.)
Good journalism matters:
Our nonprofit, independent newsroom has one mission: to hold powerful people accountable. This is how our investigations are progressing driving real-world change:
We are trying something new. Was it helpful?
The SOAR Actwhich now has a dozen and a half sponsors in the Senate and 31 in the House, was first introduced in late February by Republican Sen. Bill Cassidy of Louisiana, MD, and Democratic Sens. Mark Warner of Virginia and Amy Klobuchar of Minnesota. “Respiratory care saves the lives of many patients, but too often access to that care is too expensive or simply not available,” Warner said in a joint press release issued at the time. Cassidy, Warner and Klobuchar did not respond to requests for comment.
In addition to protecting against further reductions in Medicare rates for items such as oxygen concentrators (the bill would effectively freeze them at current levels), the SOAR Act would create a standardized medical form to allow provider claims; paying companies like Lincare to provide respiratory therapist services; and more than double what companies pay for liquid oxygen systems.
According to a private study funded in part by industry (proponents of the SOAR Act declined to share the bill), it is projected to cost taxpayers $654 million over 10 years. The nonpartisan Congressional Budget Office has not yet produced an estimate. Beneficiaries will also have to pay the companies more as part of their 20% Medicare copayment.
Liquid oxygen has long been virtually unaffordable, even for Medicare beneficiaries who need it most. In 2004, before cuts to the government’s historically generous oxygen payments began, providers provided portable liquid oxygen equipment more than 80,000 Americans.
According to Medicare data, fewer than 4,000 Medicare patients received liquid oxygen in 2021. That’s a tiny fraction of the 1.5 million Americans who now receive some form of supplemental oxygen. Supporters of the bill say there are thousands of Medicare beneficiaries who desperately need liquid oxygen to live more normal lives. “We’re ordering liquid,” Jacobs said. “Our (suppliers) are saying, ‘We don’t have it and we can’t provide it.’ This is unacceptable. Patients should have enough oxygen to leave home. They can’t go to church, they can’t see their family, they can’t go to their child’s graduation. These are touching stories.”
Under a competitive bidding program launched in 2011, oxygen companies were required by law to provide liquid systems to any patient prescribed by a doctor. But the companies insisted it was too expensive to do so at the rates the companies agreed to in the bidding process. Providing liquid oxygen, which is stored at freezing temperatures under high pressure in special equipment, requires special trucks, frequent deliveries and health-certified drivers.
Medicare enforcement officers never crack down on companies. Then, in 2019, the federal government “suspended” the oxygen bidding program and many of its reimbursement rules — after five years, it can’t say when it might replace or reactivate them — freeing the companies from any obligation to provide liquid oxygen.
In a statement, a Medicare spokesman reiterated the program’s longstanding claim, contested by both industry and patient groups, that access to liquid oxygen is not a significant problem: “While there have been some complaints about contracted providers refusing to provide liquid oxygen, providers have agreed and agreed to supply liquid oxygen, so the contracts (with the suppliers) were not canceled as a result.”
The SOAR Act also includes what supporters call a “patient’s bill of rights” — and what they see as a major concession to oxygen companies. Aimed at eliminating the dismal service that prevails, it and other parts of the bill would require providers to provide assistance with setting up equipment and monitoring, patient education and 24-hour emergency coverage as a condition of Medicare payment. (It remains unresolved how the federal government, whose enforcement record has historically been less than stellar, would police such regulations.)
Lincare has long blamed the problems on Medicare cuts and what it characterizes as a “flawed” competitive bidding program. The company informed the agency in a November 2017 that low reimbursement and “onerous documentation requirements” made it “virtually impossible to continue providing quality services to beneficiaries.” Nevertheless, Lincare appears to be making significant profits. According to the company’s former executive, it made about $300 million in profit in 2023 on revenue of $2.4 billion. (Lincare declined to comment.) Rotech, another major company in the home respiratory business, was acquired this year for $1.36 billion after posting $200 million in revenue for fiscal 2023.
Those kinds of profits allow industry to spend lavishly on Capitol Hill. Its leading trade group is Council on the Quality of Respiratory Careconsisting of six major manufacturers or distributors of oxygen equipment, including Lincare and Philips, chaired by Lincare’s CEO. Since 2018, each of CQRC’s six companies has reached at least one multimillion-dollar settlement with the government, which accused it of defrauding Medicare. Corporations usually deny any wrongdoing.
Lobbying payments to the trade group and its member companies on reimbursement issues totaled more than $1.4 million since the beginning of 2023. External PR firm CQRC won an industry “advocacy” award for her 2016 campaign in support of legislation that would slow cuts in oxygen spending, where she boasted of sending 29,000 emails to members of Congress. Through these efforts, the award stated, “an engaged community of concerned citizens has been created to help support CQRC’s efforts.”
In a statement In response to questions from ProPublica, the CQRC praised the SOAR Act for enacting “long-overdue Medicare reforms” and fixing care problems that patients and advocates often blame on the industry. The trade group blamed “current legislation” and “chronic underfunding” for patients being “often unable to access medically necessary respiratory care prescribed by their doctors,” but said the bill would establish “clear patient protections and accountability providers,” while protecting Medicare beneficiaries from “potential fraud and abuse.”
Meanwhile, new government-funded academic research disputes industry claims about the perceived harm of competitive bidding for oxygen services. Published in late October in JAMA Internal Medicine, consequence examined Medicare data to weigh the impact of the bidding program on patients with chronic obstructive pulmonary disease, by far the largest group of Medicare oxygen patients.
His conclusion: Competitive bidding has saved taxpayers and patients hundreds of millions of dollars without limiting their access to oxygen or harming their health. Dr. Kevin Duane, associate professor of respiratory medicine at the University of British Columbia and lead author of the paper, told ProPublica that his team’s review found no evidence of harm: “No reduction in claims, no change in clinical outcomes.” Duan said the study drew backlash from supporters of the measure. “I knew it called into question part of the SOAR Act,” he told ProPublica. “I think I’ve been caught in a storm.”
“We don’t have a horse in this race,” Duan said. “Many blame the competitive bidding program without a lot of data. Rarely do we have high-quality evidence that can directly inform a piece of legislation. It should not be ignored.”
Doris Burke contributed to the study.
