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.