CMS shakes up neb-med codes

Sunday, May 27, 2007

WASHINGTON - Medicare may have tipped its hand to future nebulizer medication allowables in May when it announced plans to create a single HCPC code for albuterol and Xopenex.

Effective July 1, CMS plans to classify albuterol (J7613) and Xopenex (J7614) under temporary code Q4094. Providers will bill both drugs at the same reimbursement rate.

In March 2006, CMS proposed reimbursing brand-name Xopenex and DuoNeb at lower generic rates. In December, the agency delayed that decision when it initiated a national coverage review on the use of levalbuterol in the treatment of COPD. A preliminary decision was expected June 20.

"It's somewhat surprising they would come out with this coding decision in advance of the awaited decision on (the December proposal)," said Dr. Robert Hoover, senior vice president of global clinical services for Sunrise Medical.

Based on the weighted average sales prices for both drugs, the revised reimbursement could mean a sharp increase for albuterol and dramatic drop for Xopenex. Currently, the ASP is $3.83 per unit dose for Xopenex and 20 cents for albuterol.

While industry insiders didn't want to name figures, reimbursement for Xopenex could be as much as 80% lower, they say.

"It could be a crunch for a lot of people," said Tom Pontzius, president of The VGM Group's Nationwide Respiratory. "Providers can't withstand any more cuts."

But with albuterol receiving a more favorable fee schedule, the change could be good for providers with the right drug mix, said Mickey Letson, president of Decatur, Ala.-based Letco Companies.

"For every patient that gets Xopenex, 2.5 get albuterol," said Letson. "So, providers will switch patients back to albuterol and at the end of the day, the profitability will not vary much at all."

Wayne Vega, a consultant with Stat Vial, was surprised that DuoNeb "skated" a cut for now.

"DuoNeb is the least innovative out of the two (drugs)," said Vega. "But the one with more validity is getting hammered."

Letson believes both drugs are at risk.

"For most providers, DuoNeb is not very profitable," said Letson. "So if they switch patients back to albuterol and ipratropium, it could annihilate (both Xopenex and DuoNeb) in one fell swoop."