Home Health & Hospice Week

Hemophilia drug rates will drive patients into institutions, industry says.

Respiratory providers aren't the only ones that will feel the pain of drug cuts enacted in the Medicare Modernization Act last December. Specialty pharmacies fear payment rates for hemophilia clotting factor will bleed them dry starting Jan. 1.

Blood clotting factor was spared in the first sweep of drug cuts enacted this year, remaining reimbursed at 95 percent of average wholesale price while most drugs went down to 85 percent. Medicare cut certain drugs, including inhalant medications used with home respiratory equipment, to only 80 percent of AWP this past January (see Eli's HCW, Vol. XIII, No. 1).

But starting in 2005, blood clotting factor is slated to be reimbursed under the new average sales price system, at ASP plus 6 percent. "Some of the costs for services incurred by home care companies that used to be reimbursed through the cost of the product are not going to be reimbursed through the cost of the product anymore," says attorney Lynn Shapiro Snyder at Washington D.C.-based Epstein Becker & Green.

Congress did allow for a "nominal" administration fee in addition to the hemophilia drug reimbursement rate, notes Curative Health Services Inc. in a release. But the administration fee won't be nearly enough to cover all the services that must go along with furnishing the drug, protests the Hauppauge, NY-based company with a specialty pharmacy division.

The Centers for Medicare & Medicaid Services hasn't actually set the amount for the administration fee yet. But MMA instructs CMS to rely on an unflattering January 2003 General Accounting Office report to do so. The GAO report got its data from hemophilia treatment centers, not home care providers.

"From every indication, there is no way that the administrative fees they are proposing are going to come close to covering the level of services that have been received by individuals with hemophilia in the past," warns Donna Ligda, a clinical nurse specialist at Curative. The fee has to cover services ranging from patient education by specialists to monitoring patients' drug compliance to special deliveries, such as refrigerated overnight mail, Curative says.

If CMS does push through a minimal administration fee for clotting factor, home care pharmacies are likely to stop furnishing the product, observers warn. That could increase Medicare costs in a number of ways.

First, patients who don't have quick access to the drug could suffer serious injuries and even death, warns Jan Hamilton, executive director of the Hemophilia Federation of America. Beneficiaries crippled by uncontrolled bleeds will cost the Medicare program much more in treatment in the long run.

And when patients delay administration of the clotting factor, much more of the product is needed to control the situation, further increasing costs, Hamilton notes. "The more you delay, the more product it takes and the more expensive it gets," she says. "A bleed that might have started out costing $2,000 to $3,000 could wind up costing $12,000 instead."

Finally, hospital and doctor's office visits to furnish clotting factor are much pricier than self-administration of the drug at home, Hamilton maintains.

Even worse for specialty pharmacies is the fact that Medicaid programs are following Medicare's lead and developing ASP-based systems, Curative warns.

The industry is pushing Medicare officials to adopt a generous enough administration fee to cover the costs of furnishing clotting factor. "My advice to the government is don't be penny wise and pound foolish," says Hamilton.