Study to justify service cost for neb-meds

Wednesday, June 30, 2004

WASHINGTON - AAHomecare announced in June that it is working to establish a fee-for-service payment for Medicare Part B drugs in 2005.

The effort redirects the association’s attention from pushing for a delay in the ASP’s implementation, scheduled for January 2005, and opens up new avenues for dealing with the contentious average sales price reimbursement, said AAHomecare President Kay Cox.

“A delay is only a delay,” said Asela Cuervo, AAHomecare’s senior vice president and general counsel. “We need to be able to come up with a solution.”

The reimbursement, outlined in last year’s Medicare Modernization Act, proposes a shift in drug payments from a percentage of the AWP to the ASP plus 6%. The industry worries shrinking margins could destroy the business and cause access problems to much needed respiratory medications.

To combat this scenario, AAHomecare is asking members of congress to lobby CMS for a service fee. In a May 24 letter to CMS Chief Mark McClellan, Rep. Charles Norwood, R-Ga., outlined the need for such a fee.

In the letter, Norwood referenced a Lewin Group study showing that drug acquisition costs accounted for only 26% of the total cost of home inhalation therapy for Medicare beneficiaries with other costs including customer service, patient support, billing and collections and professional liability insurance.

“I am concerned that these payments rates will result in the loss of critically important services to Medicare beneficiaries,” said Norwood in his letter. “It’s the squeaky wheel that gets the grease,” said Cox. “We need to make sure that congress heard our message and sends as many letters to CMS as possible.

The association also has contracted with Muse and Associates to perform a study of the operational and administrative costs associated with providing respiratory medications to Medicare beneficiaries. AAHomecare officials said they hope to compile results from the survey over the summer.

“The results should provide us with the data to show that ASP plus 6% really does not cover the cost of providing this to patients,” said Cuervo.