Medicare Compliance & Reimbursement

Draft policy could reduce payment for one drug by 95 percent

Whopping Medicare payment cuts may be looming for two top nebulizer-delivered drugs -- a reality that has DME suppliers calling on Congress for help.
 
Background: In March, the durable medical equipment (DME) Program Safeguard Contractors (PSCs) -- charged by the Centers for Medicare & Medicaid Services (CMS) with promoting "the integrity" of the Medicare program as it relates to DME -- released draft local coverage determinations (LCDs) focusing on Medicare payment for nebulizers and associated medications.
 
Coordinating their efforts, the three DME PSCs issued nearly identical LCDs and called for comments on select provisions by May 8.
 
Two key players: Proposed cuts for DuoNeb and Xopenex (levalbuterol) have caused the biggest stir among suppliers serving the home health industry.
 
Specifically, the draft LCD calls for basing levalbuterol payment on the lower allowance for albuterol and DuoNeb payment on the lower allowance for separate unit dose vials of albuterol and ipratropium, the two agents delivered in tandem in DuoNeb.
 
The DME PSCs, TriCenturian in regions A and B, TrustSolutions in Region C and IntegriGuard in Region D, say there is no clinical difference between Xopenex and albuterol, a point some clinicians and researchers dispute.

Huge Cuts Expected

Status update: What Medicare will pay for the two drugs remains an unknown -- more than a month after the close of the comment period.
 
"We're still in a wait-and-see position," offers Jacquelyn McClure, director of The Med Group's National Respiratory Network in Lubbock, TX. But estimates using the payment methodology in the LCDs suggest sizeable reductions in what Medicare would pay.
 
The policy would reduce reimbursement for Xopenex and DuoNeb by approximately 95 percent and 73 percent, respectively, according to DME giant Lincare Holdings Inc., based in Clearwater, FL. Lincare addressed the concern in its May 10 quarterly report to investors.
 
The American Association for Homecare (AAHomecare), the Association of Chain Drug Stores and COPD Alert, a patient support and advocacy group, have all called on the Medicare contractors to rescind or at least revise the LCDs. They have focused on concerns about Medicare beneficiaries' future access to the widely used drugs.
 
"Medicare reimbursement for these drugs will be so far below a pharmacy's cost to acquire them that providers will simply not be able to afford furnishing these drugs to their patients," AAHomecare says in its written comments. "As a result many patients who need these drugs will lose access to them."
 
Consumers, suppliers and pharmacies are making a loud case for revisions to the LCDs, reports Jonae Barnes, a spokesperson for Sepracor Inc., the Marlborough, MA-based maker of Xopenex.
 
Sepracor has launched SaveOurBreath, a Web-based advocacy effort that seeks to help physicians, patients and other caregivers speak out against the LCD (www.saveourbreath.com).
 
Developments to watch: CMS is not likely to issue a national coverage determination since the PSCs worked jointly on the LCD stand. With no firm deadline for finalization, the PSCs aren't saying when they are likely to move to a final decision.