Home Health & Hospice Week

Care management activities aren't covered with inhalation drugs, says CMS.

As of Jan. 1, the future for some suppliers furnishing inhalation therapy has become uncertain.

The Centers for Medicare & Medicaid Services' 40 percent decrease in the monthly dispensing fee for nebulized inhalation drugs went into effect on the first of the year.

The following dispensing fees for inhalation drugs are now in effect, according to a recently revised Medlearn Matters article: $57 initial dispensing fee, $33 for each 30-day supply after the initial supply and $66 for each 90-day supply after the initial supply.

While the initial dispensing fee remains the same, the 30-day supply fee drops from $57, and the 90-day supply fee is down more than 17 percent from $80.

These cuts are bad news for anyone furnishing inhalation drugs. But they'll be especially damaging to home medical equipment suppliers without large patient bases and the ability to absorb costs elsewhere in the business, predicts Joe Lewarski, vice chair of the American Association for Homecare's HME/Respiratory Therapy Advisory Council.

Forecast: The cuts' results won't be evident right away, cautions Lewarski, also with Santa Barbara, CA-based Inogen Inc. Suppliers will need to operate in the changed environment for some time before the full impact on the industry becomes clear.

Pre-Cut Costs Already Too Low

The 2005 dispensing fees already were low compared to data collected by the AAHomecare, points out Lewarski. AAHomecare conducted a survey of home care pharmacies during August and September 2005 which indicated that the total dispensing costs for nebulized inhalation drugs services are $66.55 for a 30-day supply and $138.80 for a 90-day supply (see Eli's HCW, Vol. XIV, No. 36).

The even-lower 2006 payment rates for dispensing the inhalation drugs will be that much more painful to endure, experts warn.

In a press release announcing the 2006 fee reductions, CMS pointed out that the cost data on which the 2005 fees were based included "care management activities (such as in-home visits, patient education, caregiver training and care coordination) that do not fall within the scope of a dispensing fee and do not have a Medicare benefit category."

CMS' justification "doesn't fully respect the costs associated with dispensing and managing patients," Lewarski maintains.

On the horizon: The 2005 AAHomecare survey predicted that 44 percent of home care pharmacies would stop providing home inhalation drug therapy to older and disabled patients if there was a substantial cut to the Medicare dispensing fee.

Note: The revised CMS memo, "Supplying Fee and Inhalation Drug Dispensing Fee Revisions and Clarifications," is at www.ugsmedicare.com/providers/hot_topics/documents/2005/MM3990.pdf.