OIG report overlooks cost of enteral therapy services

Wednesday, January 20, 2010

WASHINGTON  HME providers who supply nursing homes with enteral nutrition therapy services took issue with a report issued in January by the Office of Inspector General (OIG) that says Medicare pays them too much.

The report, "Medicare Part B Services During Non-Part A Nursing Home Stays: Enteral Nutrient Pricing," found that Medicare paid $284 million for enteral nutrition in 2006nearly 47% of the total $608 million in total Medicare Part B payments for that category. The report recommends that CMS adjust the fee schedule amounts to "more accurately reflect supplier prices for nutrients provided to nursing home residents."

What's missing, say providers, is an analysis of the costs associated with providing enteral nutrition. The report acknowledges as much on page 30:

Prices obtained from surveys of nursing homes and suppliers also did not include shipping and delivery costs," states the report. "Further, we did not include administrative costs or staffing costs associated with administering the enteral nutrients. Using these costs could have raised the average unit prices for the enteral nutrients.

That has irked providers.

"Another way of wording that is 'We didnt compare apples-to-apples and failed to include a plethora of additional expenses, so our research is essentially invalid,' said David Franklin, CEO/COO of Meridian, Miss.

Another provider said: "It is unimaginable that any analysis of service costs does not contain that information."

Supplying enteral nutrition to nursing homes is labor intensive, say providers.

"We deliver weekly, with patient specific packaging to assist the facility in providing the correct product to the correct patient in the correct quantity," said one provider. "We bill for what has been used not what was delivered. If we shipped in everything once a month and didn't accept returns for unused products, my costs would diminish greatly."