Apria slams OIG report on neb meds

WASHINGTON - The industry continued to voice its outrage and disbelief last month over an OIG report that stated HME providers deliver little in the way of services to respiratory med patients. In a lengthy press release issued Oct. 7, Apria CEO Lawrence Higby stated that in evaluating the services provided to neb-med patients, the OIG "excluded services that represent over 80% of the total costs providers incur to take care of beneficiaries who need this therapy." CMS said in August that it's "likely" that the respiratory med dispensing fee, now $57 per month per patient, will be reduced in 2006. In its report issued in late September, the OIG did not recommend that CMS reduce reimbursement. Industry watchers, however, believe the report provides CMS with ammunition to do just that. If that happens, providers say, they'll have to seriously consider exiting the med business or find new ways to cut costs. "The last two months I've lost money on that program with 2,000 patients," said Don White, president of Associated Healthcare in Amherst, N.Y. "We are seriously considering if we should be in the market as small as we are. We just don't have the buying power to get the drugs at a rate that will allow us a margin." If providers have cut back on services this year, it doesn't come as a surprise, said White, a former AAHomecare chairman. If Medicare is going to cut reimbursement, providers need to cut costs to maintain an adequate profit margin, and that usually means eliminating services or changing how they are delivered. "That people are cutting services seems logical, but Medicare doesn't care if you make money or not," White said. An AAHomecare study released in late September stated that 44% of providers report they'll stop dispensing respiratory meds to Medicare beneficiaries if their fee is reduced by more than a nominal amount. The results of the survey, conducted in August, were based on responses from 89 providers that serve between 55%-60% of all Medicare inhalation drug therapy patients. Respondents reported that an appropriate dispensing fee is $66.55 for a 30-day supply schedule and $138.80 for 90 days. In the Apria release, Higby added: "To conclude that 'beneficiaries, on average, receive little service from their inhalation drug suppliers beyond contacting them to ask if the need a drug refill' - when the OIG excluded the majority of the other higher-cost services provided - is irresponsible. It puts the entire benefit at risk if CMS were to adjust the dispensing fee based solely on this inadequate study."