CMS to pay $57 per month for neb-med dispensing

Sunday, November 7, 2004

November 8, 2004

WASHINGTON - Respiratory providers can expect a $57 per month dispensing fee in 2005 for inhalation drugs to offset the collapse in profits expected following implementation of the average sale price reimbursement formula.
The $57 figure was disclosed in a Final Rule posted to the Federal Register last week. A figure between $55 and $64 per month had been expected following the release of a GAO report in October, but CMS surprised the industry by also offering an $80 fee per 90-day supply for those providers who want to switch distribution methods, according to the rule.
“They basically said that it is up to the discretion of the dispensing physician and the provider as to how they dispense it. Is it more beneficial to them and the patient to dispense 90 days or is it not?” said Mickey Letson, president of the Letco Companies.
CMS first hinted at allowing the shipment of 90-day supplies in a Notice of Proposed Rulemaking this summer. This fall’s GAO report, “Appropriate Dispensing Fees Needed for Suppliers of Inhalation Therapy Drugs,” concluded that allowing providers to ship 90-day supplies to patients could result in significant savings on labor and shipping and billing costs.
While many providers’ decisions on how to proceed in 2005 hinged on the dispensing fee, industry watchers said the rule generated many more questions than it answered. Primarily, whether the dispensing fee will be paid “per patient per month” or “per drug per month.”
“Reading the comments it seems it is per-patient regardless of the number of drugs dispensed, then you read the text of the actual rule and it looks like it would be interpreted, most reasonably, as per drug,” said Lisa Smith, an attorney with Brown & Fortunato.
Providers should brace for a slew of other changes in 2005, as well. The rule, which included a list of all the new J-codes, eliminated compounding modifiers. It also waived the Assignment of Benefit requirement and increased the Part B deductible from $100 to $110 in 2005.
CMS is expected to release the revised fee schedule for the new J-codes in late November. The new fees will be based on the average sales price data, and the information could drastically impact the drug combinations being dispensed to patients, said Letson.
“There is a big plus to the patients in this whole process in that in the past there were certain drugs that a provider couldn’t dispense because they were too expensive and Medicare paid below what it cost the provider to buy them,” he said. “Under the new system there is not a single drug that I have seen to this point that a provider can not dispense without some profit from the dispensing fee.”