Medicare Compliance & Reimbursement
GAO TARGETS NEW AWP PAYMENT HEMORRHAGE
As with most covered drugs and biologicals,Medicare pays way too much for blood clotting factor, the General Accounting Office maintains in a report released Feb. 12.
The culprit is familiar: Payment for blood clotting factor — a biological used by hemophiliacs to prevent uncontrolled internal bleeding — is based on the now-notorious “average wholesale price,” a manufacturer-set price some critics have maintained is little more than a fiction.
While Medicare pays 95 percent of AWP for clotting factor, the costs for providers is much lower, according to “Medicare: Payment for Blood Clotting Factor Exceeds Providers’ Acquisition Costs” (GAO-03-184). Hemophilia treatment centers pay 35 to 48 percent below AWP while home care companies pay 22 to 40 percent under AWP, the GAO says.
Providers have long pointed out that high prices for drugs help make up for other costs — acquisition, delivery, inventory management and ancillary supplies, for example — that aren’t covered by Medicare at all.
They worry that cuts in drug payments, without a corresponding increase in payments for administering drugs and biologicals, would leave them holding the bag for uncovered costs. The GAO, however, seems to recognize that dilemma. When payments for the clotting factor are reduced, the watchdog agency recommends, the Centers for Medicare & Medicaid Services “should establish a separate payment for the costs of delivering clotting factor to Medicare beneficiaries.”
To see the report, go to www.gao.gov/new.items/d03184.pdf.
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