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Medicare Compliance & Reimbursement

PHYSICIANS:

Count On Local Carriers For Least Costly Policy Fixes

Published on Sat Feb 19, 2005

PPAC: CMS to remove drugs from update formula retroactively.

Least costly alternative policies create an "unlevel playing field" across the country because some Part B carriers don't apply them, or apply them differently than others, physicians complain. And in the wake of steep cuts to drug payments, these policies make it even harder for physicians to provide badly needed drugs.

Currently, individual carriers can decide whether or how to implement LCA policies, which will only pay the price of the cheapest alternative to a particular drug, officials from the Centers for Medicare and Medicaid Services told the Practicing Physicians' Advisory Council at PPAC's March 7 meeting. If providers want to see LCA policies changed in the wake of drug cuts, they should talk to their local carriers, CMS added.

CMS admitted that one carrier had experienced "claims processing issues" as a result of problems with an LCA policy, but the problems are now resolved.
 
Five states don't have LCA policies at all, according to PPAC representatives. These states include Utah, which just launched a six-month program to test whether it needs such a policy. Carrier medical directors have told local physicians that they're waiting for a national directive before they reform their LCA policies.

Be careful what you wish for, CMS officials noted. If the agency issued a national "least costly alternative" policy, physicians might not like it as much as their local carrier's policy.

At its March 7 meeting, PPAC also:

 
  • Passed a resolution calling on CMS to require vendors in the new competitive drug acquisition program to waive copayments for patients when the physician is waiving the patients' copayments for other services. Physicians feared they would have to absorb the copays for their indigent patients if the drug vendors refuse to do so. 

     
  • Resolved that CMS should require the drug vendors to provide drugs for off-label uses when the evidence supports their use. Also, the demonstration drug prices should not affect average sales price levels, and physicians should be able to opt in or out of the program on a drug-by-drug basis.

     
  • Recommended that CMS begin projecting the effect on Medicare beneficiaries' access to physician care if the physician pay cuts averaging 5 percent a year take effect from 2006 to 2011, and that CMS develop a plan to prevent decrease in physician's participation in Medicare.

     
  • Urged CMS to use its administrative authority to remove physician-administered drugs and biologics from the physician  payment update formula retroactive to 1996. CMS officials said that removing drugs from the formula going forward wouldn't prevent steep cuts, and the CMS counsel is still figuring out whether it has the authority to remove drugs retroactively.

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