Pharmacy compounded drugs get separate billing

Sunday, December 3, 2006

WASHINGTON - Medicare released new codes last week--but no fee schedules--for compounded nebulizer medications, making it difficult to gauge the impact on the industry.

Beginning January 2007, compounded versions of levalbuterol, albuterol, budesonide, ipratroprium and other inhalation drugs will be billed under separate HCPC codes based on the ASP of active ingredients, rather than on the rates for commercially available versions.

The new codes are the latest step in cost-cutting measures aimed at the respiratory medication industry.

In March, CMS proposed reimbursing brand-name drugs Xopenex and DuoNeb at generic rates and, while the comment period closed on May 8, the industry still awaits a final decision.

Despite not knowing the new fee schedule, compounding pharmacies should expect lower margins, said Mickey Letson, president of Decatur, Ala.-based Letco Companies.

"Will [compounding] be less profitable then it is today? Probably," said Letson. "But I doubt it would be less profitable then if they lower the reimbursement for Xopenex."

As with most reimbursement cuts, there is a fear that price reductions will reduce the number of options for patients, say industry insiders.

"Like anything else, if private businesses aren't compensated for providing a product, they are not going to do it," said one source. "It's just that simple."

The new codes include: levalbuterol (J7607, J7615); albuterol (J7609 and J7610); budesonide (J7634); and ipratropium bromide (J7645).