Providers react: 'We're not going to help them'

MURRYSVILLE, Pa. - Philips Respironics may have every right to sell replacement supplies for CPAP devices through Kroger retail pharmacies, but that doesn't mean HME providers have to like it one bit.

“My first reaction was outrage,” said Jamie Blair, vice president of Genesis Respiratory Services in New Boston, Ohio, and a respiratory therapist. “It's another competitor I have to deal with.”

Providers have consulted the Ohio Respiratory Care Board, but it doesn't appear that Philips Respironics and Cincinnati-based Kroger are violating any laws by furnishing masks, with prescriptions, and accessories like tubing through retail pharmacies.

That's of little solace to providers who fear that, long-term, Philips Respironics will begin selling actual CPAP devices through Kroger pharmacies, a move that would cut them out of the picture completely.

“This pilot project could lead to further things,” Blair said.

In the meantime, the biggest worry for providers: That the project sends the wrong message to insurers that CPAP masks and accessories are retail items and that anyone can provide them.

“When we provide these products, we do it with an RT and with the expense of third-party billing,” said Mark Auckerman, a managing member at Med-Ox Home Medical in Springfield, Ohio. “They're doing it over-the-counter at steeply discounted prices. It's only a matter of time before payers start saying, 'You can go to Kroger.'”

While there was a time when providers believed a project like this would fall flat on its face, in a world where an increasing number of people have high-deductible insurance plans and are paying for more things out-of-pocket, they're no longer so sure.

“People are saying, 'For $8 tubing, I'll just get it myself,' and they're going to get it wherever they can get the best price,” said Joel Marx, chairman of Medical Service Co., in Cleveland.

(Kroger's pricing ranges from $58.95 for replacement inserts for a mask to $11.99 for six feet of tubing.)

Providers say the project is a wakeup call that they need to change the way they do business. That may mean a two-tiered business model—one more traditional (brick-and-mortar, insurance), one stripped down (online, cash).

“We're looking at different channels to sell these products,” Marx said.

While providers can't stop Philips Respironics from selling CPAP masks and accessories through Kroger stores, they're not completely powerless, they say.

“We can't do anything about their market plan, but we're not going to help them get there,” Auckerman said. “To sell disposables, you have to have the hardware out there, and I don't think providers are going to be anxious to put their hardware out there, only to have people replenish their supplies at Kroger.”