WASHINGTON--After a scathing article in the New York Times blasting what reporter Charles Duhigg described as Medicare overpayments for home oxygen, the American Association for Homecare issued a statement late Friday explaining HME companies' services in providing the therapy and asking for "a genuine debate" about appropriate payment for oxygen.
In the Friday newspaper article, titled "Oxygen Suppliers Fight to Keep a Medicare Boon," Duhigg said the government program spends "more than double what somebody might spend at a drugstore" for home oxygen equipment. In addition, the article said, "Medicare spends billions of dollars each year on products and services that are available at far lower prices from retail pharmacies and online stores."
But in its statement, AAHomecare said the article "paints an extremely biased and misleading picture" of the health care sector that provides home oxygen therapy to Medicare beneficiaries.
AAHomecare "welcomes a genuine debate about appropriate Medicare payment policy for oxygen therapy," the statement said. "In fact, the association and companies providing oxygen therapy have been working for more than a year to design alternatives to existing Medicare policy for Congress to consider. Unfortunately, both the New York Times article and federal policymakers have focused only on the equipment costs associated with home oxygen therapy rather than the complete therapy, which requires numerous services ...
"The fundamental flaw" in the article, the statement continued, "is the dangerously simplistic assumption that oxygen therapy delivered to Medicare patients in their homes should cost the same as the Internet or eBay price to buy the equipment only."
The association pointed to a 2006 study by research firm Morrison Informatics--which analyzed data from home care providers collectively serving more than 600,000 Medicare home oxygen patients--that found 72 percent of the costs of providing the therapy represents services, delivery and other operational expenses, while the equipment itself represents only 28 percent.
For the second time in as many months, the industry has had to beat back the notion that Medicare is overspending on its reimbursements vs. Internet prices.
AAHomecare and other home care supporters responded in November when an Office of Inspector General report compared Medicare fees for power wheelchairs to Internet prices for those products. (See HomeCare Monday, Nov. 5.)
"Internet purchasing and the Medicare provider model are completely different," the association wrote in a Nov. 12 letter to Inspector General Daniel Levinson, noting that HME providers must shoulder expenses such as evaluating the beneficiary's specific needs, delivering the equipment, performing on-site training and processing insurance claims.
"Any accurate analysis of costs required to provide the expected Medicare standard of care must take into account these services and administrative costs, which are distinct from the costs of acquiring the equipment," the letter pointed out.
Friday's newspaper article comes just as Congress returns from its Thanksgiving recess to finish up work on key spending bills. The Senate Finance Committee plans to mark up a Medicare bill this week or next that stakeholders fear could include another oxygen reimbursement cut.
In a posting on its Web site, Waterloo, Iowa-based buying group VGM--which conducted a Washington call-in Nov. 14 to rally support for several industry-backed bills and ask for no further cuts to oxygen--labeled the article "hack journalism" and said it planned to respond. The call-in generated more than 8,100 calls to federal legislators.
AAHomecare said its response had been sent to the national media. If the Times article is picked up in local papers, the association said, it has prepared points that providers can use to write their own responses in a letter to the editor.
The National Association of Independent Medical Equipment Suppliers sent a memo to its members on Friday to "email, call or write this reporter with your response to the story.
"As an industry, we must respond to such stories in the strongest manner possible," read a message from NAIMES' Wayne Stanfield, president and CEO, who said the recently formed provider organization would prepare its own response to the article.
According to the Council for Quality Respiratory Care, which also issued a response to the story on Friday afternoon, the New York Times article "omits salient facts about home oxygen therapy and the critical role it plays in keeping some of Medicare's sickest beneficiaries in their own homes as they manage the effects of debilitating and irreversible lung disease.
"The story inappropriately treats home oxygen therapy as though it is nothing more than the rental of inert equipment, when in fact home oxygen is a prescribed therapy, that when properly administered, requires both medical devices and myriad patient services," the CQRC said. The group is comprised of 11 of the nation's leading home oxygen providers and manufacturers.
Read the New York Times article.
Read AAHomecare's full response.