Provider calls for action

Sunday, November 30, 2008

ST. PETERSBURG, Fla.--Sam Jarczynski wondered recently if the respiratory medication provider has become the forgotten stepchild of the HME industry.

In October, the president of RxStat and AAHomecare member sent the association a letter requesting that it study the neb-med market, including Medicare reimbursement for the drugs.

Ever since 2006, when Medicare began paying for neb-meds using average sales pricing (ASP) plus a $33 dispensing fee, providers have struggled.

“From a business perspective, you can’t plan, because it changes every quarter,” he said. “The margins are gone and with all the costs associated with dispensing the drugs, it’s become nonprofitable.”

While Jarczynski and a handful of other large companies remain viable, they are still vulnerable. Case in point: Murray, Ky.-based Independent Home Pharmacy filed for Chapter 7 bankruptcy in August. The company had 20,000 patients.

“The recent bankruptcy of IHP, one of the largest respiratory pharmacies, shows that the current payment methodology is flawed and will result in future business failures, as well as creating problems for patient access to nebulizer medications,” Jarczynski told AAHomecare.

More specifically, Jarzcynski would like the association to compare how many providers bill for neb-meds today compared to five years ago. He speculates it’s about 80% fewer.

“The pharmacies have closed,” he said. “Yet, we’re still vital to keeping patients out of the hospital.”