Home Health & Hospice Week

Compounded inhalation drugs 'not medically necessary,' says Medicare.

Home health suppliers and pharmacists who compound inhalation drugs will get their final payments for the drugs this month.

Effective July 1, Medicare claims for compounded inhalation solutions will be denied, according to the Centers for Medicare & Medicaid Services. The agency released coding changes corresponding to the payment cuts on June 1 (Transmittal 1260, Change Request 5645).

In March, CMS durable medical equipment Medicare contractors issued revised local coverage determinations (LCDs) stating the compounded products have not been safety tested and thus "have the potential of putting a patient at increased risk of injury, illness or death."

The news is another blow in a series of strikes against fair reimbursement for the drugs, suppliers say. The new policy exceeds CMS' announcement last year that Medicare would begin limiting how much it reimburses pharmacies and suppliers who compound inhalation drugs.

The 2006 announcement came amid pressure from the U.S. Food & Drug Administration to limit Medicare reimbursement to only FDA-approved products unless there is a "patient-specific medical need" for a compounded drug.

Strict policy: The new coverage determinations by DME contractors do not allow for limited reimbursement based on case-by-case clinical situations.

Effective for claims with dates of service on or after July 1, Medicare won't pay for the following HCPCS codes:

• J7611 (Albuterol non-comp con)
• J7612 (Levalbuterol non-comp con)
• J7613 (Albuterol non-comp unit)
• J7614 (Levalbuterol non-comp unit)

In their place, Medicare will pay for these HCPCS, for claims with dates of service on or after July 1:

• Q4093 (Albuterol inh non-comp con)
• Q4094 (Albuterol inh non-comp u d).

Note: To view the transmittal, go to www.cms.hhs.gov/transmittals/downloads/R1260CP.pdf.