WASHINGTON – If you have respiratory problems, Medicare allows you to rent oxygen equipment, which costs $7,215 for three years. But here’s the kicker: If you bought the equipment, it would cost $587.

Congress passed a law requiring a 36-month cap on renting equipment after the Department of Health and Human Services’ inspector general put a spotlight on the disparate costs. After Jan. 1, 2009, Medicare beneficiaries who have been renting their equipment for three years will own the equipment, and the medical suppliers will get no more payments.

The Bush administration wants to go further, capping rental payments after 13 months. Even by limiting rental payments to 36 months, the inspector general said, Medicare and its beneficiaries will continue to pay more than 12 times the purchase price for the equipment. The inspector general’s report said Medicare could save $3.2 billion over five years by limiting rental payments for oxygen concentrators to 13 months.

Home oxygen suppliers, who are watching the values of their companies decline because of the upcoming uncertainty, are crying foul. And their protests are winning sympathy on Capitol Hill.

Critics argue that transferring ownership would be a mistake. Hundreds of small providers would be driven out of business, they say, and the elderly no longer would have their equipment serviced by the medical suppliers.

“Think of a World War II veteran,” said Sen. Pat Roberts, R-Kan. “He now has ownership of the oxygen tank. He says to his wife, Mabel, “Mabel, how do I attach this oxygen so it works?’ And she says, “Well, it’d be a good idea, dear, if you put out your cigar.’ I just don’t think that that is the right way to go. This is the perfect storm.”

Roberts has introduced a bill called the Home Oxygen Patient Protection Act to try to stop the change.

President Bush included the 13-month cap in his proposed 2009 budget in February. The administration mentioned the cuts again last month as a way to offset increased spending on a new farm bill.

Rep. Collin Peterson, a Minnesota Democrat who heads the House Agriculture Committee, quickly rejected the proposal.

Companies that provide home oxygen services say that Congress is targeting them unfairly. Benefits for their services are set to be cut by $1.5 billion over the next two years. That represents a reduction of more than 20 percent, said Peter Kelly, the chairman of the Council for Quality Respiratory Care, a group of home oxygen providers and manufacturers.

“That’s not tinkering – that’s amputation,” he said. “And to consider further cuts on top of that is unwise public policy.”

Kelly disputed the inspector general’s report, calling it a politically motivated study. He said it was misleading to compare the costs of owning and renting equipment because the latter included service and supplies. And if elderly patients no longer have their equipment serviced, Kelly said, more of them will end up in emergency rooms, driving up costs in the long run.

The inspector general’s report defended the plan, saying the machines require minimal servicing and maintenance and that the companies usually train users on how to maintain them.

“Maintenance for a portable system primarily consists of picking up empty cylinders and delivering full ones,” the report said.

The fight over how to pay for oxygen treatments is indicative of the difficulty Washington faces as it attempts to put the brakes on Medicare, the government’s health-care program for the elderly.

Cutting spending in the popular program has always been a tough sell on Capitol Hill. The Bush administration is renewing the battle with a plan to reduce the growth of Medicare spending by more than $180 billion over the next five years.

“If it remains on autopilot, 11 years from now, Medicare will be broke,” Health and Human Services Secretary Michael Leavitt told the Senate Finance Committee in February, describing the situation as “an emergency.”

He acknowledged that it will be hard to overcome the public’s inertia. “Americans’ sensitivity on entitlement warnings has become a little bit numbed” over the years, he said.

“There’s a repeated cycle of alarms and inaction,” he said. “Dire warnings become a kind of seasonal occurrence. It’s a lot like the cherry blossoms coming out. We drive by them, acknowledge them and then keep going without doing anything.”

Leavitt was received coolly when he presented the president’s budget plan.

Finance Committee Chairman Max Baucus, a Montana Democrat, accused the administration of proposing “a meat-ax cut” for Medicare.

“The real problem, frankly … is health-care costs in this country, generally,” Baucus said. “That’s the problem. We’re not going to solve a problem just by whacking the beejeebies out of Medicare or Medicaid.”

The administration faces skepticism in Republican ranks, as well.

Sen. Olympia Snowe, R-Maine, told Leavitt that the proposed cuts would have “a Draconian impact on states” that are serving the most needy.

“It represents broad-based cuts. … It’s going to represent 16 percent cuts for physician payments. You’re cutting long-term care, hospice, home health care, hospitals, across the board,” she said.

More than 1.4 million Medicare beneficiaries used home oxygen therapy in 2005, according to the Congressional Budget Office.

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(c) 2008, McClatchy-Tribune Information Services.

AP-NY-04-04-08 2008EDT