Drugs:
90% Cut To Respiratory Drugs Could Wipe Out Industry
Published on Sat Aug 07, 2004
Will a dispensing fee turn the tide? The average sales price system for drug payments is set to hit Jan. 1, and it's probably even worse than you've imagined.
The Centers for Medicare & Medicaid Services proposes to cut the reimbursement rates for inhalation drugs albuterol sulfate and ipratropium bromide by a staggering 89 percent, according to the agency's proposed 2005 fee schedule for physicians. That's on top of a cut to those drugs' payment rates from 95 percent of average wholesale price to 80 percent of AWP that took effect this past Jan. 1.
Under the ASP-plus-6 percent methodology, albuterol sulfate will be reimbursed at $0.04 per milligram and ipratropium bromide at $0.30 per mg. Those rates could change slightly as drug manufacturers report new data quarterly for ASP calculations, CMS says in the rule published in the Aug. 5 Federal Register.
Payment rates for nebulizers themselves, which are required to administer the drugs, are set to undergo unspecified cuts to Federal Employee Health Benefit Plan levels in 2005 as well. Nebulizers under code E0570 will be affected, CMS adds. Because the maintenance and servicing fee is based on the first month's rental payment, that fee will be reduced accordingly.
Prediction: These drastic cuts could be the death knell for the respiratory services industry - and for Medicare beneficiaries' access to badly needed respiratory medications. Industry giants Lincare Holdings Inc., Apria Healthcare Group Inc. and American Homepatient Inc. say they will be forced to exit the Medicare respiratory business if the cuts go through as planned.
"Lincare plans to cease providing respiratory therapy drugs and will send appropriate notices to its patients by mid-October so that they can make alternative treatment arrangements, no matter how inadequate," the Clearwater, FL-based behemoth that operates in 47 states says in a release. Likewise, Lake Forest, CA-based Apria with 455 branches in 50 states says it will stop accepting referrals for new Medicare respiratory patients "in the next few months" if the proposal stands.
Brentwood, TN-based AHP with 285 locations in 35 states "will need to begin notifying [patients] in late October that it will be unable to continue to provide the drugs after January 1, 2005 unless there is a significant change in reimbursement methodology," it says.
The cuts that may force respiratory companies to withdraw will leave the approximately one million Medicare beneficiaries needing respiratory medications stranded with limited access to them. "Medicare beneficiaries must continue to have access to critical inhalation therapies," Kay Cox, president and CEO of the American Association for Homecare, urges in a release.
"CMS does not yet fully understand the severity of the potentially harmful impact of the proposed regulation on the large number of Medicare beneficiaries suffering from chronic lung disease," Lincare worries. [...]
