HCFA’s revised ventilator policy scares the respiratory industry
By KAREN PIHL-CAREY
HHBR Staff Writer
Respironics (Pittsburgh) and other manufacturers of ventilators used in home health settings may experience a decline in revenues if new guidelines proposed by the Health Care Financing Administration (HCFA; Baltimore) are implemented.
Late in May, HCFA withdrew guidelines proposed last July in a move that pleased the industry. But the agency’s revised policy for respiratory assist devices interrupted any celebration, reminding the industry that a fight is still ahead. The initial guidelines proposed last year called for requiring patients to submit to clinical testing before qualifying for ventilators, and to attain the ventilators through a prescription from a board-certified pulmonologist. Pressure from the durable medical equipment regional carriers (DMERCs) convinced HCFA to drop the requirements.
But in a statement issued last week, Respironics President/CEO Dennis Meteny said the DMERCs forgot certain conclusions laid out by physicians. In the new guidelines, for instance, HCFA is recommending that doctors prescribe cheaper ventilators, something that would hurt Respironics’ revenues.
"Respironics believes that the current draft proposal is still overly restrictive for patients and administratively burdensome for clinicians and healthcare providers," Meteny said.
The new guidelines also suggest limiting how long patients using ventilators would be reimbursed. As of now, they receive $500 a month for as long as they need it. Analysts believe HCFA is considering a cap at about 15 months. Once finalized, the policy will take effect Oct. 1.
Respironics is a company that designs, develops, manufactures and markets respiratory therapy products used in hospitals and clinics, as well as home healthcare settings. It is one of the largest home medical device companies in the respiratory market.
The company’s shares fell 12% one day last week, and three times the average daily volume of shares were traded that same day. According to Respironics Vice President Dan Bevevino, Medicare patients using the company’s ventilators account for 7%-8% of the company’s sales.
Parker/Hunter (Pittsburgh) analyst Richard Lawrence downgraded the company’s stock to "market performer," and reduced his earnings estimate to $1.05 per share from $1.16 per share for FY2000 ending June 30, 2000.
Phil Porte, executive director of the National Association of Medical Direction of Respiratory Care, said that the DMERCs and HCFA still have some work to do, but that they’re heading in the right direction. "For physicians to adopt all of the clinical aspects of this revised policy is extremely problematic," Porte said, "not only for the clinical community, but most certainly for Medicare beneficiaries."
Mary St. Pierre, director of regulatory affairs for the National Association of Home Care (Washington) told HHBR she had not yet seen the policy and could not comment. "What we will have to do is get in touch with one of our providers, a DME affiliate, and have them take a look at it," she said.
Meteny said he believes HCFA wants the coverage policy done right, "albeit on a slower timeframe than many of us would have liked." The company plans to continue its discussions with HCFA and Congress to keep the ventilators from being classified in the capped rental category. All industry professionals will receive the opportunity to comment before final guidelines are issued in late summer. An open meeting will be scheduled in the near future at HCFA in Baltimore. HCFA will accept written comments about the policy until 5 p.m. June 15 at the following address: Health Care Financing Administration, Division of Community Post-Acute Care, ATTN: Joel Kaiser, C5-06-27, 7500 Security Blvd., Baltimore 21244-1850. The comments may be emailed, with no attachments, and including full names, addresses, and affiliations, to [email protected].
The policy itself can be accessed through the DMERC Web site, www.astar-federal.com.
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