Washington Proposed cuts by the Health Care Financing Administration to Medicare reimbursement rates on dozens of pharmaceuticals would have a devastating effect on the home care industry, according to some home medical equipment providers, manufacturers and industry advocates.

"If the goal was to hurt an industry that's barely hanging on, this is the right policy to pursue," said Kurt Davis, a spokesman for Coram Healthcare, Denver.

Plans for what would be the latest body blow began a few months ago when the National Association of Medicaid Fraud Control Units released a list of recommended lower prices for about 50 drugs; some, such as albuterol sulfate and vancomycin hydrochloride, are commonly prescribed for respiratory and infusion therapy. The suggested price cuts in some cases reached as high as 88 percent. Several states, including Alaska, Arkansas, Connecticut, Georgia, Indiana, Iowa, Maine, Maryland, Missouri, New Jersey, Ohio, Oklahoma and Wisconsin, already have adopted these lower rates for their Medicaid programs.

The federal government has now gotten in on the act: HCFA is considering use of the lower prices to determine reimbursement rates for Medicare beneficiaries. Federal officials claim that pharmaceutical companies have charged Medicare more than doctors and providers have paid for the drugs and pocketed the difference. Providers, however, disagree-and say the policy is misguided.

"Through this action, the government is decreasing access to home care for people, which is likely to shift patients back into hospitals as a last resort and end up costing more money," Davis said. "It seems like the real goal is to get at the pharmaceutical companies because the government feels like they've been gouging the states. The effect that's occurring to us is collateral damage that is very real, and I hope it's not intended. If it is, it seems like a very foolish public policy."

Manufacturers have also bemoaned the proposed reimbursement cuts and the effect they would have.

Janice Kreitzer, aerosol products manager, Sunrise Medical, Somerset, Pa., said the policy would affect manufacturers and noted that in the last few years, "home care dealers actually decided to start marketing nebulizers and compressors again, because it pulls unit-dose medication along with it. And if all of a sudden it's not attractive to do unit-dose medication any longer, they'll stop marketing them."

Industry advocates already are formulating plans to counterattack the policy. "This is a tremendous concern," said Jim Davidson of Davidson and Co., a lobbyist for the American Association for Homecare. "It's a cut that's being proposed to take effect October 1, and it would decimate the industry. We've gotten encouraging responses from [Capitol] Hill about writing a letter to [Health and Human Secretary] Donna Shalala and the president. We will launch a campaign to fight this in the next few weeks."