Industry doubts OIG methodology

Sunday, September 19, 2004

September 20, 2004

WASHINGTON - HME providers are questioning the methodology of an OIG report issued last week that claims FEHBP plans pay suppliers 15% less for oxygen concentrators and 20% less for stationary liquid systems. (See HME Newswire, 9/13/04)

"They [CMS] are fixated on reducing payment rates for oxygen 18% to 20%," said Mario Lacute, president of Seeley Medical in Andover, Ohio. "If you take a look at everything they’re driving for, including competitive bidding, that’s where it’s at. That’s the magic number."

The OIG report, "Medicare Payment Rates for Home Oxygen." notes that competitive bidding reduced reimbursement for oxygen equipment and supplies in Polk County, Fla. by 19% and San Antonio, Texas by 22%.

On the same day the OIG issued its report last week, AAHomecare issued a report that that found "virtually no difference" between payment rates for oxygen at Medicare and the FEHBP.

Reacting to the OIG report, AAHomecare said it believed its own survey of 107 FEHBP plans, conducted by Morrison Infomatics, provides "more appropriate data and methodology" for implementation of the MMA.

AAHomecare questioned whether the OIG survey made any allowance for the costs of providing oxygen contents. In its study, Morrison Informatics separated FEHPB payments for oxygen contents.

"Inclusion of these oxygen content payments is critical to the accuracy of any survey of FEHPB prices," said AAHomecare.

AAHomecare spokesman Mike Reinemer said the trade group planned to meet with OIG staff and compare data sets.