Industry Reacts to Dispensing Fee Reduction
Adding to the list of providers’ worries, CMS announced a dramatic drop in the monthly dispensing fee for inhalation drug therapy from the current $57 per monthly supply to $33 in 2006, and also stated that the 90-day supply would be reduced from the current $80 to $66 in 2006. According to the 2006 physician fee schedule, CMS will pay $57 for the first month of a patient’s inhalation therapy, but the fee will then be reduced to $33 for the proceeding months. “I hate to say that you almost expect it, but in today’s environment, it is almost like the government is looking for ways to put people like us out of business,” says Ric Wren, president, WrenCare, Middletown, Ohio. “I don’t think it is intentionally the case, but unintentionally that is what is happening. We are such a small portion of the total dollar figure that I would think that they should be supporting our industry to help promote home care.”
But CMS support is nowhere despite the recent Muse & Associates study that showed the fee should actually be increased. “Studies have carefully documented the fact that the current $57 fee under-reimburses providers for this therapy, which requires a wide array of services,” says Kay Cox, president and CEO of AAHomecare. “So a cut only makes it more difficult to continue providing this critical therapy to beneficiaries who depend on it.”
In fact, providers (including large nationals such as Apria) have been reconsidering their capability to continue to provide inhalation drug therapy since the Office of Inspector General (OIG) report, released in late September, hinted that cuts were around the corner. “A significant downward adjustment to the dispensing fee in 2006 will leave Apria with no choice but to reevaluate its ability to continue serving Medicare beneficiaries,” says Lawrence M. Higby, CEO, Apria Healthcare Group Inc, Lake Forest, Calif, in an Apria statement. “This is not simply a provider issue—this is ultimately a patient issue. Medicare currently spends less than $3 per day to keep a beneficiary at home with a nebulizer and typical inhalation medications. Compared to an emergency room visit or inpatient stay due to an exacerbation of chronic obstructive pulmonary disease (COPD), that is an incredible value.”
AAHomecare earlier this year noted serious flaws in the OIG report, which grossly understated the service components of home inhalation drug therapy. Now that the cuts have become a reality, where do providers of inhalation therapy go from here, and how can they continue to earn a profit? “They have got you in a corner,” says Wren. “There are not a lot of maneuvers that you have. One of the things we are looking at is the Medicare part D prescription drug program, but we don’t yet know if that is going to be an upside to our business.”
In the meantime, AAHomecare will look at various remedies and will also track the impact of this cut on patient access to home inhalation drug therapy. The organization will continue to provide data to CMS that documents those services and the full costs of providing this therapy. “We can’t afford to be pessimistic,” says Michael Reinemer, VP, communications, AAHomecare. “The home care community will have to redouble efforts to educate Congress and CMS about the importance of strengthening home care services.”
Sen Rick Santorum(R-Pa)
Senate Passes Bill to Drop Capped Rental
Budget reconciliation legislation, which includes a section that would terminate the capped rental option for DME, advanced through the Senate recently. The bill would eliminate the Medicare beneficiary’s choice to continue to rent medical equipment in the capped rental category and shift costs and responsibilities for maintaining medical equipment to Medicare beneficiaries. Despite Senate approval of the bill, Sen Rick Santorum (R-Pa) and six Senate colleagues offered a successful amendment to cut the language in the Senate budget reconciliation bill that would have reimbursed power wheelchairs solely as a capped-rental item, eliminating the first month purchase option. The amendment restores the first-month purchase option for power wheelchairs and only modifies the power wheelchair specific language—not the other portions of the capped-rental changes impacting other HME items.
The bill is currently making its way to a House-Senate conference committee to produce a final bill that will then be voted on by the Senate and House for final approval and then sent to the President for his signature.
Senate Appropriations Bill Would Delay Mobility Rule
A provision to delay implementation of the draft Interim Final Rule (IFR) for power mobility devices has been included in the Senate’s Labor, Health and Human Services appropriations bill. The provision is expected to have support in the House-Senate conference committee for the bill.
However, until the President signs the bill, the IFR remains in effect. “When the bill is approved by Congress, we hope that CMS will not wait for the President to sign it before putting this delay into effect,” says Seth Johnson, director of government relations at Pride Mobility Products, Exeter, Pa, and chair of AAHomecare’s Rehab and Assistive Technology Council.
Sen Arlen Specter (R-Pa)
The amendment to the appropriations bill was offered in committee by Sen Arlen Specter (R-Pa). This legislative remedy was the only way for Congress to stop CMS from going forward with the implementation of the IFR. Last month, Senators Specter and Rick Santorum (R-Pa) wrote CMS Administrator Mark McClellan to urge a delay of the IFR. In their letter, the Senators signaled that if CMS did not delay the IFR, they would offer a legislative remedy to force a delay.
Specifically, the delay provision requires CMS to withdraw the IFR and reissue a proposed rule by January 1, 2006, with a 45-day comment period and issue a final rule by February 14, which would go into effect on April 1, 2006. The provision stems from a concerted advocacy effort by mobility providers and manufacturers earlier this fall.
HR 3559 Update
HR 3559, the Hobson-Tanner bill, continues to move ahead with four recent cosponsors signing on, bringing the cosponsor total to 49 at press time. Though the number of cosponsors is growing, grassroots efforts have not necessarily been easy. “As chair of the AAHomecare State Leaders Council, I can tell you that the state associations across the country have been working very hard since August lobbying this bill,” says Karyn Estrella, executive director, New England Medical Equipment Dealers Association (NEMED). “The Council met via conference call every 2 weeks through the end of September. To measure our progress, a scorecard was created. Of the 50 states, congressmen in 29 states have been contacted (a total of 135 as of today [November 14]) and of the 135, 49 have signed on. Unfortunately, in politics sometimes forces beyond your control can affect outcomes,” Estrella continues. “And certainly the region affected by the hurricanes have had other challenges that took priority. The Council will continue to strengthen our grassroots efforts and reach out to more congressmen on this, and future, issues.”
Inhaled Diabetes Treatment Could Provide Opportunity
Providers may soon be able to distribute a new inhaled insulin treatment for diabetes patients. Pfizer and sanofi-aventis, a member of the sanofi-aventis Group, said that the US Food and Drug Administration has notified companies that it is extending its original review period for ExuberaŽ (insulin [rDNA origin] powder for oral inhalation) by 3 months to review additional technical chemistry data submitted by the companies. Seeing that providers distribute treatment options to patients with diabetes, approval of this treatment may provide an opportunity for distribution of what could be a popular form of treatment for diabetics.
In September, an FDA Advisory Committee recommended approval of Exubera for the treatment of adults with type 1 and type 2 diabetes. The FDA is not obligated to follow the Advisory Committee’s recommendation but usually does. Pfizer and sanofi-aventis continue to work closely with the FDA to make this medicine available for patients.
Proposed Quality Standards
Proposed draft quality standards address the way providers handle their businesses. Understanding the rules and regulations outlined in this document will be critical to maintaining a successful business (the deadline to comment on standards was November 28, 2005). A recent Dealer/Provider Midweek Analysis article by Timothy Webster, JD, Brown & Fortunato PC, Amarillo, Tex, outlined some of the key provisions of the document:
The draft standards are divided into two sections. The first contains general business quality standards, and the second contains standards that are specific to particular products.
• The “Financial Management” section includes a requirement that providers have annual operating budgets prepared in accordance with generally accepted accounting principles. Providers would also be required to have financial statements that are “accounted for, recorded, and audited by accounting personnel to ensure financial propriety.”
• Another section of the business quality standards that may be unrealistic for small providers is the “performance management” section. The standards in this section would require each provider to measure its effectiveness and efficiency in meeting organizational goals and compliance with policies, procedures, and applicable laws according to criteria that are “measurable and verifiable, and include both quantitative and qualitative measures.”
• Suppliers would be required to conduct beneficiary satisfaction surveys at least once per quarter, and to make the results available on request.
• The standards would require every HME provider to develop and implement a compliance plan.
• The “Beneficiary Services” section of the proposed standards would require providers to give beneficiaries “defined and guaranteed estimates for the time needed to ship items.”
• The final section of the proposed business quality standards, “Information Management,” would require an HME provider to “implement a system to collect and aggregate administrative and beneficiary service data to ensure accuracy of interpretation, and to support decision-making, business operations, and performance improvement.”
• The product-specific standards begin with general requirements that are applicable to all products, including requirements relating to intake, delivery and setup, beneficiary instruction, and follow-up. Many of the standards in these appendices relate to equipment inspection, home assessment, and other basic activities associated with provision of HME. DP
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