Tuesday, September 30, 2003

Where is the service component?
With Kay Cox

Q. Why does Medicare cover service costs for physician-administered drugs but not the costs associated with administering inhalation and infusion therapies?

A. Physicians are reimbursed for the costs of administering Medicare part B drugs because there is a service component built into the physician fee schedule. In contrast, there is not a separate service component in the DME payment schedule - an issue that has forced homecare pharmacies to use the ‘spread’ between the acquisition price of drugs and the AWP reimbursed by Medicare to cover administration costs. But CMS recently issued a notice of proposed rulemaking addressing AWP reform that will eliminate or reduce this ‘spread,’ making it difficult for suppliers to cover the costs of inhalation and infusion therapies. And, while administration officials have stated on several occasions that AWP reform must also cover the professional services incurred during the provision of infusion and inhalation treatments, CMS did not include a service component in its proposed rule.

AAHomecare is very concerned that the absence of a service component - coupled with CMS’ proposed payment cuts - will cause an immediate crisis for suppliers and their patients. We will submit extensive comments on CMS’ proposed rule that reflect this concern. In June, we hand-delivered a letter to Tom Scully that urged CMS to “develop a well-crafted approach for DME-covered drugs that reflect the costs of providing such drugs,” adding that the lack of a service component would “seriously impair the future availability of home infusion and inhalation for Medicare beneficiaries.”

We will continue to work with CMS until this issue is resolved to the satisfaction of our patients and membership alike.

Kay Cox is CEO of AAHomecare. Contact her at 703-836-6263.