Apria Says OIG Report Is Just Plain Wrong

LAKE FOREST, Calif.–In a statement issued last Wednesday, Apria
Healthcare Group responded to a recent HHS Office of Inspector
General report on inhalation drug supplier services, saying the
report is “fraught with inadequacies, both in terms of data
collected and the study’s broad-based erroneous conclusions.”

A Sept. 29 OIG report concluded that Medicare beneficiaries of
inhalation drug therapies receive few services under the current
dispensing fee. CMS is currently reconsidering its dispensing fee
for inhalation drugs for 2006 and announced earlier this year it
will likely fall below the current $57 per month, or $80 for a
90-day supply (see HomeCare
Monday, Aug. 8).

In compiling its report, critics have pointed out that the OIG
did not distinguish between managed care and traditional
fee-for-service plans in its calculations, which industry advocates
have called an “apples-to-oranges” comparison.

“We are extremely disappointed that the OIG disregarded or
excluded most of the services necessary to safely and effectively
provide home inhalation therapy, before reaching the conclusion
that inhalation patients do not receive meaningful services,” said
Apria CEO Lawrence M. Higby.

The company maintains that the OIG excluded services that
represent more than 80 percent of the total costs providers incur
to take care of beneficiaries who need inhalation drug therapy. The
OIG collected information about a short list of activities instead
of conducting a time and motion study or collecting provider cost
information, Apria said, which the provider maintains would have
given the agency more meaningful data on which to base a decision
about any adjustment to the dispensing fee.

“A significant downward adjustment to the dispensing fee in 2006
will leave Apria with no choice but to reevaluate its ability to
consider serving Medicare beneficiaries,” Higby concluded. The
company provides respiratory therapy through more than 500 branches
in 50 states.

A recent press release from AAHomecare warned 44 percent of home
care pharmacies said they would stop providing the inhalation drugs
to Medicare beneficiaries if the dispensing fee is cut
significantly.

Citing results of a Muse and Associates survey conducted in
August and September, the association said the OIG study “grossly
understates the service components of home inhalation drug
therapy.” Instead, the association said survey results showed the
costs of providing a 30-day supply of nebulized drugs is $66.55 and
the cost for a 90-day supply was $138.80–meaning that the
dispensing fees should actually be raised.

To access a copy of the OIG report, click
here.

For more information about the AAHomecare survey, click
here.