AAH, OIG surveys heat up dispensing fee debate

Sunday, October 2, 2005

WASHINGTON - Forty-four percent of providers report they'll stop dispensing respiratory meds to Medicare beneficiaries if their fee is reduced by more than a nominal amount, according to a survey released last week by AAHomecare.

The remaining providers reported they would curtail services (50.4%), ask beneficiaries to pay for services (2.7%), or close shop completely (2.5%), in the face of a cut.

The results of the survey, conducted in August, were based on responses from 89 providers that serve between 55%-60% of all Medicare inhalation drug therapy patients.

CMS announced on Aug. 1 that the dispensing fee for 2006 would likely be lower than the current $57 a month per patient. In response, AAHomecare contracted Muse & Associates to gather data that supports the industry's argument that the agency should not reduce the fee.

Respondents reported that an appropriate dispensing fee is $66.55 for a 30-day supply schedule and $138.80 for a 90 days.

A 2004 survey by AAHomecare found that providers needed a little more than that to break even under the average sales price plus 6% formula: $68.10.

The Office of Inspector General joined the debate last week with an examination of the services beneficiaries receive under the current dispensing fee. The OIG's conclusion, which it suggests CMS consider in setting a fee: Providers contact beneficiaries to see if they need drug refills, but they do little else.
AAHomecare reacted to the report by pointing out that the OIG didn't include pharmacy, delivery, billing or administrative services - the most costly services - in its review.
As part of its survey, AAHomecare created seven major service categories representing 117 services. Almost all respondents reported that the scope of services they currently provide should be reimbursed under the dispensing fee.