Study calls ASP reimbursement for albuterol inadequate

August 30, 2004 ALEXANDRIA, Va. - If CMS uses a formula based on the average sales price to reduce reimbursement for albuterol and ipratropium in 2005, HME providers would be under reimbursed by $68.10 per monthly supply, according to a new study. The study, the largest of its kind, conducted for the American Association for Homecare by Muse and Associates, surveyed 109 pharmacies that represent 2,448 branch locations providing inhalation drug therapy services to 337,348 Medicare beneficiaries per month - or 61 percent of all Medicare inhalation drug therapy patients. AAHomecare is sharing the study with CMS and the GAO, “This objective assessment of the cost of inhalation therapies in the home reveals a serious gap between what will be paid under the new 2005 reimbursement formula and the reality of what it costs to deliver these therapies to Medicare beneficiaries,” said Kay Cox, president and CEO of the American Association for Homecare. “The ability to provide these therapies and patient access to these therapies will both suffer if we don't close this reimbursement gap.” In a notice of proposed rule making for the 2005 Medicare physician fee schedule issued last month, CMS proposed 89 percent reimbursement cuts, using the ASP formula, for albuterol sulfate and ipratropium bromide. The two drugs, covered under Medicare Part B, are commonly prescribed to treat diseases such as chronic obstructive pulmonary disease (COPD), which afflicts more than 14 million Americans. However, because of the numerous patient-management, pharmacy, compounding, delivery, and administrative costs, these drug therapies cannot be provided to Medicare patients at the ASP mandated formula without a substantial service or dispensing fee, says AAHomecare. Among suppliers responding to the survey, nearly nine out of 10 (89%) said that they would discontinue providing inhalation drugs to Medicare beneficiaries under the ASP formula if no other Medicare reimbursement were available to offset their substantial, additional costs. “We will file the study as part of our comments to CMS and look forward to cooperating closely with the agency to ensure that beneficiaries continue to have access to critical inhalation therapies,” said Cox. The study was supervised by Don Muse, Ph.D., president of Muse and Associates which specializes in analysis of Medicare and Medicaid statutes and regulations.