Objectives and Scope
The Ministry of Health and Long-Term Care, Home Oxygen Program (HOP), is issuing this RFP in order to establish a Vendors of Record (VOR) List of qualified home oxygen vendors to provide home oxygen services to eligible clients. Vendors who complete and sign the attached submission and meet HOP requirements will enter into an agreement with the Ministry to provide oxygen, oxygen equipment and supplies, and services to clients requiring long-term oxygen therapy and to clients requiring palliative care. Multiple contracts will be signed with all vendors who meet the HOP requirements, as a result of this RFP. The establishment of a public VOR List for qualified vendors will ensure the necessary
transparency, fairness and compliance with the Government Procurement Directive, while also ensuring continuity of care to the very vulnerable population served by this program.
The term of these contracts with vendors will be for five years, effective April 1, 2010 - March 31, 2015, with an option in favour of the Ministry to extend the agreement on the same terms and conditions for two (2) additional terms of up to one (1) year, each.
Background
1. The Home Oxygen Program (HOP) – Program Description
The Home Oxygen Program (HOP) is a program of the Ontario Ministry of Health and Long-Term Care, which is administered by the Assistive Devices Program (ADP). It provides financial assistance to eligible residents of Ontario, mostly elderly and frail, who have a medical need for long-term oxygen therapy. Applicants must meet general and medical criteria to qualify for funding.
In 2008/09, the program provided assistance to 30,603 recipients, of whom 80% were seniors and over one-half were between the ages of 71 and 85. The majority of HOP clients (90%) receive 100% funding as they receive home care, are social assistance recipients, are 65+ years of age, or live in long-term care facilities. All other HOP clients receive 75%
funding.
2. Regulation/Legislation
The ADP is funded under Section 6 (1)(4) of the Ministry of Health and Long-Term Care Act, which authorizes the Minister to enter into agreements for the provision of health services and equipment required therefore and for the payment of remuneration for such health services on a basis other than fee for service.
3. HOP Utilization and Cost
The number of HOP clients has been steadily increasing over the years. The open-ended nature of the program has made it difficult to control the growth in utilization. In recent years, following the introduction of client assessment for continued eligibility at 90 days and
again at 12 months1, length of stay on the program dropped, as well as cost per client. It is expected that growth will continue, as Ontario’s population ages. The estimates provided in the table below (for 2009/10-2011/12) reflect no change in cost per client and projected utilization growth of 3.6% annually which is consistent with growth patterns observed in the program over the past number of years.
# of Clients Total Cost 2003/04 22,522 51,997,031 2004/05 25,085 60,117,400 2005/06 25,478 62,840,309 2006/07 28,654 63,571,968
2007/08 26,647 65,370,325
2008/09 30,603 68,817,599 2009/10* 31,705 70,242,500 2010/11* 32,846 72,771,500 2011/12* 34,029 75,391,500 2012/13* 35,254 78,105,594
* Forecast, subject to change
4. Ontario’s Current Home Oxygen Industry
There are currently 63 vendors under contract with HOP and the home oxygen industry in Ontario, which operate out of approximately 137 locations in Ontario. Typically, there are two large vendors and two or three small vendors in the catchment area of each one of Ontario’s 14 Local Health Integration Networks (LHINs).
5. Current Business Model
Since 2000, the Ministry has had a Memorandum of Understanding (MOU) with home oxygen service providers. The current MOU is between the Ministry and representatives of home oxygen vendors, including two associations representing larger private and hospital home oxygen vendors - the Ontario Home Respiratory Services Association (OHRSA) and the Hospital Community Respiratory Services Alliance (HCRSA), as well as one
representative of the independent home oxygen vendors.
The MOU sets out an agreement with respect to pricing (a fixed price per month per client, with different rates for the north and south), and establishes the Ministry’s intent to
incorporate the price in its Home Oxygen Program (HOP) Administration Manual to reflect
1 The first change to the HOP renewal process took place in October 2001 (renewed funding after three months and again after an additional 12 months). The second change was made in September 2005 (renewed funding after three months and after 9 months)
the understood billing policies. Individual vendors are required to register with the ADP and to sign an individual Vendor Agreement with the Ministry which requires them to abide by the HOP requirements (set out in the Home Oxygen Program (HOP) Administration Manual), including prices, billing, and re-assessment of clients at 90 days and 12 months.
Price has been set by the Ministry through negotiation with industry representatives and market research. At the end of the 12 month period, clients who continue to meet medical criteria receive long term funding and do not need to be reassessed. The current MOU will end on March 31, 2010.
The current set monthly rate ($389.00 per month per client in southern Ontario, and $414.00 per month per client in northern Ontario) covers an integrated service that includes the receipt of the prescription from a physician, the collection of information and submission to ADP of the HOP application form, the provision, the cost of leasing the oxygen equipment, delivery and maintenance of equipment, oxygen supplies and related services including professional assessment of the therapeutic requirements of the patient, the development of a client-centred care plan, instructions for the patient and caregiver on the safe and effective use of equipment, ongoing clinical care and support by a regulated health professional, including re-certification testing, 24/7 after-hours support, replacement of oxygen cylinders and soft goods and infection control procedures and adjustments to oxygen flow rates as required. In addition, health professionals employed by the vendors provide updates to physicians and other health care workers that may be involved in a client’s care.
6. The New Business Model Development
In 2008, the Ministry conducted an extensive international Jurisdictional Review of Home Oxygen programs, as well as a Literature Review, and has analyzed several optional business models with respect to the administration of HOP. As a result of this review and analysis, the Ministry concluded that there was insufficient compelling evidence to
implement comprehensive changes to Ontario’s current business model at this time. The Ministry has determined that a business model which is more transparent, open, fair and compliant with Government Procurement Directives would be advantageous and ensure continued accessibility to province-wide comprehensive home oxygen services.
Consequently, the Ministry has determined that the establishment of a Vendor of Record (VOR) List for Home Oxygen Services, along with modifications to its pricing structure, would be the most suitable and effective model, while ensuring continuity of care to the HOP clients. The VOR list will be open to all home oxygen vendors who meet the program’s criteria, therefore, a multi-vendor market is expected to continue. As well, the service model currently in place will remain essentially the same, and client eligibility or funded benefits will not change.
In order to establish the VOR list, the Ministry is issuing this Request for Proposals (RFP) for vendors wishing to participate in a Vendor of Record List to provide home oxygen services over the next five years with an option for up to two one-year extensions. The Program Manual (Home Oxygen Program (HOP) Administration Manual) and the general ADP manual (Policies and Procedures Manual for the Assistive Devices Program) are
incorporated into this RFP by reference. The Manual/s describe the vendor requirements and set out an approved maximum price schedule which identifies what vendors may charge for services. The new Pricing Schedule is also described in the RFP for easy reference. The Manuals can also be found at:
http://www.health.gov.on.ca/english/providers/pub/adp/policymanual_08.pdf
Prior to the issuance of this RFP, and to gain a better understanding of key industry developments, improve the service delivery model, and provide information/updates to vendors, the Ministry conducted a Vendor Information Session (February 2009) and a series of consultation sessions with home oxygen vendors, on vendor performance criteria (April - May 2009) and pricing (July 2009). Prior to each consultation meeting, vendors were asked to complete a survey in writing. A summary of responses was then posted online, and was followed by a consultation session for clarification of any questions.
The Ministry retained an external consultant to conduct a Pricing Review in order to assist the Ministry in updating information on key cost drivers, conduct a vendor pricing survey and provide the Ministry with advice and recommendations on the pricing schedule.
Further jurisdictional review and research into fair market pricing and pricing components have been conducted, as well as consultation with health care experts and the vendor community to ensure that the most reasonable pricing model and reimbursement rates are achieved. A Fairness Commissioner has been retained since the beginning of the
procurement process to ensure that the process is fair, transparent and legitimate.
All documents related to the procurement process, including all Facts Sheets, links to consultation documents (surveys), summary of survey responses, vendor meeting records, and Qs and As, have been posted on MERX, the ADP site, and have been sent to OHRSA for posting on its site. The following is the link to the ADP site, where all the procurement process documents can be found:
http://www.health.gov.on.ca/english/providers/program/adp/homeoxygen_procurement.html The information gathered by the Ministry has been analyzed and used in this document with the intent to develop a fair and competitive RFP, and to revise some of HOP
requirements, performance indicators and pricing, all of which are reflected in the Home Oxygen Program (HOP) Administration Manual.
Services
Full details of the Services are provided in the Home Oxygen Program (HOP) Administration Manual and in the Policies and Procedures Manual for the Assistive Devices Program. The information provided below is a summary. Please refer to the Manual/s for a full description of Vendor responsibilities.
The successful vendors will:
Operate in accordance with the requirements of this RFP and the appended Home Oxygen Program (HOP) Administration Manual and Policies and the Procedures Manual for the Assistive Devices Program;
Ensure and deliver quality service customized to the individual needs of all HOP clients;
Provide clients with oxygen equipment, instruction and service within the timeframes specified by the prescribing physician; and
Provide equipment maintenance and repairs service to HOP clients at no extra cost.
The home oxygen vendor key responsibilities cover an integrated service that includes:
the receipt of the prescription from a physician,
the collection of information and submission to ADP of the HOP application form,
the provision, delivery and maintenance of equipment,
the full cost of leasing the oxygen equipment, oxygen supplies and related services professional assessment of the therapeutic requirements of the patient, and re-assessment of clients at 90 days and 12 months
the development of a client-centred care plan, instructions for the patient and caregiver on the safe and effective use of equipment,
ongoing clinical care and support by a regulated health professional, including re-certification testing,
24/7 after-hours support,
replacement of oxygen cylinders and soft goods,
infection control procedures and adjustments to oxygen flow rates as required.
In addition, health professionals employed by the vendors provide updates to physicians and other health care workers that may be involved in a client’s care.
Following the execution of contracts pursuant to this RFP, all successful vendors must provide home oxygen services in accordance with the Home Oxygen Program (HOP) Administration Manual and the Policies and Procedures Manual for the Assistive Devices Program, under Appendix A, Schedule 2 and 3 of this RFP, which describe the vendor requirements, pricing which vendors may charge for services, and billing. All new or revised HOP requirements (effective April 1, 2010) are highlighted in the Home Oxygen Program (HOP) Administration Manual to assist vendors to identify changes from current
requirements.
Contractual Arrangements with HOP vendors/locations
The Home Oxygen Program provides funding to vendors for the provision of oxygen and oxygen services to eligible recipients (clients) in Ontario. Each HOP vendor who completes and signs the attached submission and meets HOP requirements enters into a contractual agreement with the Ministry. The contracts allow the Ministry to pay vendors directly on behalf of the recipient of oxygen, oxygen equipment and services.
Each vendor will complete and sign one proposal. Included in the proposal will be a complete list of all vendor locations or branches that provide HOP services to approved clients. Each location or branch will be provided with an individual registration number.
Client Eligibility
Client eligibility or funded benefits remain the same as under the current process and will not change as a result of this RFP. The Home Oxygen program pays 100 percent of the cost of oxygen, oxygen equipment and supplies for eligible individuals who are:
65 years and older
receiving social assistance
residents of Long-Term Care facilities, or
receiving professional services from a Community Care Access Centre (CCAC) For all other individuals, ADP pays the vendors 75 percent of the monthly ADP-approved maximum rates, and the client must pay the vendor the remaining 25 percent portion.
Individuals are fully responsible for equipment loss or the cost of repairs due to damage incurred by the individual or loss equipment. Reimbursement is limited to the established rate by the Ministry.
The provision of funding for home oxygen services does not apply to individuals moving out of Ontario to take up permanent residence elsewhere.
Neither ADP nor ADP clients may be billed in excess of the amounts that are specifically allowed under the provisions of the Home Oxygen Program (HOP) Administration Manual.
Individuals who reside in an acute, chronic care or psychiatric hospital, or a Schedule I or II Ministry of Community and Social Services (MCSS) residential facility are not eligible for HOP coverage. Individuals receiving Workplace Safety & Insurance Board (WSIB) benefits or Department of Veterans Affairs (DVA) Group A benefits are not eligible for funding through HOP.
Oxygen used solely on an emergency or standby basis or for pain relief is not funded by HOP. HOP coverage does not include funding for transtrachael oxygen products or oxygen conserving cannula.
Medical Eligibility
Individuals applying to HOP for funding must have their oxygen needs assessed by a physician and must meet the following medical eligibility criteria:
Chronic hypoxemia at rest. Hypoxemia is defined as an arterial oxygen blood gas value (PaO2) of less than or equal to 55 mmHg or an arterial oxygen saturation (SpO2) of less than or equal to 88 per cent.
Some individuals with a PaO2 consistently in the range of 56 to 60 mmHg (SpO2 of 89%
to 90%) on room air, may be considered candidates for long-term home oxygen therapy if any of the following medical conditions are present:
Cor pulmonale,
Pulmonary hypertension, or
Persistent erythrocytosis.
Individuals with a persistent PaO2 in the range of 56 to 60mmHg may be candidates for long-term oxygen therapy if the following occurs:
exercise limited by hypoxemia and documented to improve with supplemental oxygen, or
nocturnal hypoxemia.
Infants with Bronchopumlonary Dysplasia (BPD).
Arterial Blood Gases and Oximetry Testing
Individuals who are 19 years of age or older accessing funding assistance for the first time must provide arterial blood gases (ABG’s) that demonstrate that they meet the program’s criteria. ABGs must be performed in a licensed laboratory when the individual’s respiratory condition is medically stable. ABG’s performed during an acute episode are not
acceptable. Capillary or portable ABGs are not acceptable.
Oximetry Testing
Once an individual is found eligible and is receiving home oxygen therapy, funding
assistance may be periodically renewed. At the time that funding assistance is renewed, the individual must again demonstrate that they continue to meet the criteria through an
oximetry study. Only health care professionals holding a valid certificate from a regulatory college specified in the Regulated Health Professions Act may perform oximetry studies submitted to the ADP.
Palliative Eligibility
Special consideration is given to individuals at the end-stage of a terminal disease who are receiving palliative care. Arterial blood gases or oximetry testing are not required.
Applicants are approved for a maximum of ninety days funding from the date a physician signs the form.
Funding
HOP approves funding for one supply system (modality) per client only. For some clients, the registered HOP vendor may provide a combination of systems, e.g., concentrator and liquid oxygen; liquid oxygen and cylinders. Registered HOP vendors may not charge HOP or the HOP client for the provision of a multiple home oxygen system but can charge the client for a duplicate system, i.e., when clients are provided with two of the same types of systems, e.g., two concentrators or two liquid oxygen systems. The HOP does not fund duplicate systems. If a client requests a second supply system for convenience, whether for home use or travel, the registered HOP vendor may seek reimbursement for the second system
directly from the client.
Consumable “soft goods” such as tubing, masks and oxygen humidifiers are included in the approved reimbursement rate, as set out in section 4.9 of the Home Oxygen Program (HOP) Administration Manual.
Client Application for Home Oxygen Therapy
The application procedure remains the same as under the current process and will not change as a result of this RFP. A physician must assess all individuals applying to the Home Oxygen Program for funding assistance. On initial application to HOP, testing to determine medical eligibility is done through registered laboratories. The physician
completes the medical information section noting the arterial blood gases (ABG’s) results.
The vendor will complete the appropriate sections of the HOP application form and will submit the form to HOP. HOP applications are required to be renewed annually to
determine ongoing eligibility. Oximetry tests are acceptable for annual renewals and must be submitted along with written confirmation from a regulated health professional that the individual continues to require home oxygen therapy.
The following is the Home Oxygen Initiation process, by stage:
1. Assessment
Individual is assessed by a family practice physician or specialist physician to determine if home oxygen therapy is required. Along with ABG’s or oximetry studies, the assessment may include the following:
- Relevant medical history,
2. Prescription
Physician prescribes home oxygen therapy. Prescription includes the following:
- Litre flow required for rest, exertion and nocturnal use, - Delivery system (optional).
3. Selection of vendor
A home oxygen vendor is selected and notified that oxygen therapy is to be initiated. Vendor selection is based on the individual’s choice but the individual may be advised by the prescribing physician if they are not aware of vendors in their community or they can contact the program for a list of vendors in their immediate area.
Notification includes providing the vendor with a copy of the physician prescription.
4. Determination of oxygen delivery system
The prescribing physician determines that home oxygen therapy that meets the needs of the individual is required. That may include the following types of delivery systems:
o stationary concentrators and liquid systems o stationary concentrator and oxygen cylinders o stationary concentrators and portable concentrators o liquid systems and oxygen cylinders
o liquid systems only o cylinders only o transfill systems
The vendor must provide the client with the appropriate oxygen delivery system
The vendor must provide the client with the appropriate oxygen delivery system