Infusion providers deal with drug cuts

Tuesday, September 30, 2003

WASHINGTON - CMS isn’t alone in wanting to reduce reimbursement for drugs. Some third-party payers, under pressure to reduce drug costs, have already dumped the AWP methodology and begun setting their own fee schedule for home infusion drugs.

“More and more plans are wanting to say, ‘We’ll reimburse you for the drugs you provide but according to a pricing schedule we determine and that we may or may not share with you prior to dispensing the drug or even when you submit the claim,’” said Steve Schmahl, vice president of contract and pricing at Coram Healthcare, one of the nation’s largest providers of home infusion.

The irony here is that as payers move toward standardized coding as required by HIPAA, they are moving away from standardization on drug pricing methodology, Schmahl said.

“From what our members report, there are all kinds of things happening in the drug pricing component,” said Lorrie Kline-Kaplan, executive director of the National Home Infusion Association.

Since Medicare doesn’t pay for home infusion therapy, changes in drug reimbursement methodology are occurring independent of attempts by CMS to slash drug reimbursement.

For home infusion providers, drug reimbursement is one of three areas where they receive reimbursement. In addition to drugs, they’re reimbursed a per diem rate (pharmacy services, supplies and equipment) and for the nursing visit. Providers sometimes adjust down the per diem rate if they can make it up in drug reimbursement. But with payers playing shenanigans with drug reimbursement, providers need to know their true costs and charge appropriately; cost shifting will no longer work, Kaplan said.

“It comes down to making good business decisions and where business doesn’t make sense you can’t do it,” Schmahl said. “We’d rather not sign a contract than be forced into a situation where we have cut service or quality.”