BETHESDA, MD 30 November 2009—The federal government expects to pay hospitals $32.2 billion in 2010 for outpatient services covered under Medicare, a $1.9 billion increase over last year`s spending, the Centers for Medicare and Medicaid Services (CMS) announced in late October.
Payments to be made in 2010 under the outpatient prospective payment system (OPPS) include a 2.1% inflationary increase for outpatient services at hospitals that report specific quality data to CMS and a 0.1% increase for hospitals that do not submit quality data.
Included in the OPPS final rule is what CMS called a "payment adjustment" to account for hospital pharmacy overhead costs for separately payable drugs and biological products that are not bundled into ambulatory payment classification (APC) groups.
The adjustment leaves the formula for the payment rate unchanged from 2009: manufacturer-reported average sales price (ASP) + 4%. CMS had previously proposed reducing the rate to ASP plus 3%.
ASHP and other pharmacy stakeholders had asked the agency to raise the reimbursement amount for separately paid drugs to at least ASP plus 6%, the amount paid to office-based physician practices.
"ASHP is disappointed that CMS will not reimburse separately payable drugs at ASP plus 6%, since ASP plus 4% is insufficient to support core pharmacy services, in particular the costs of ensuring safe medication use," said Justine Coffey, ASHP`s director of federal regulatory affairs.
But she said ASHP is pleased that CMS increased the proportion of pharmacy overhead costs attributed to separately payable drugs in calculating the reimbursement rate, which would otherwise have fallen to ASP plus 3%. ASHP, in its written comments regarding the proposed OPPS, had requested that CMS make this mathematical change.
CMS has been working for several years to quantify pharmacy overhead costs and incorporate them into the OPPS. The agency wants hospitals to include in their Medicare claims the Healthcare Common Procedure Coding System (HCPCS) codes for medications, which CMS uses to analyze drug expenditures.
"If hospitals truly desire significantly greater OPPS payment accuracy for separately payable drugs and biologicals, it is clear that hospitals will need to assume some burden in submitting more accurate data to us," the final rule states. "More complete data from hospitals on which drugs were provided for a specific episode would help improve payment accuracy for separately payable drugs in the future, and we encourage hospitals to change their reporting practices if they are not already reporting HCPCS codes for all drugs furnished, if specific codes are available."
CMS included data from hospitals that participate in the 340B drug-pricing program when setting payment rates for medications, over the objections of ASHP and others.
Hospitals that participate in the 340B program serve a disproportionate share of indigent patients and thus pay federally mandated discounted prices for medications. ASHP was among those who are concerned that by including 340B-participating hospitals` claims data in aggregate cost calculations for medications, CMS underestimates hospitals` true drug costs.
ASP data from manufacturers do exclude 340B pricing, an inconsistency noted by ASHP and others who commented on the OPPS proposal.
CMS did agree to continue reimbursing medication costs to all hospitals, including those that participate in the 340B program, at the same rate during 2010. ASHP`s written comments supported this policy.
Antiemetics no longer exempt. Effective January 1, serotonin type 3-receptor antagonists—also known as 5-HT3 antiemetics—will be bundled into APCs unless the average acquisition cost for a day`s worth of therapy with the drug exceeds $65. This class of antiemetics had been exempt since 2005 from the so-called packaging threshold at which drug and biological product costs are separately payable at the rate of ASP + 4%.
CMS stated that the exemption for 5-HT3 antiemetics is no longer necessary to ensure that patients receive appropriate therapy for chemotherapy-related nausea. The final rule states that generic competition and the availability of new dosage forms have driven down the price of 5-HT3 antiemetics enough to allow CMS to withdraw the exemption without adversely affecting patient care.
Of note, the packaging threshold for all separately payable drugs was set at $50 by Congress from 2004 through 2006. CMS has raised the threshold by $5 each year since then.
Clotting-factor fee remains. Hospitals that provide blood-clotting factors to their patients will continue to receive a special "furnishing fee" in 2010, according to the final rule.
This year`s furnishing fee was 16.4 cents per unit of blood-clotting factor, an amount calculated using Consumer Price Index data from the Bureau of Labor Statistics. The furnishing fee for 2010 has been increased to 17 cents per unit of blood-clotting factor.
Pass-through list revised. Five injectable drugs—gadofosveset trisodium, paliperidone palmitate, dexamethasone intravitreal implant, human fibrinogen concentrate, and ferumoxytol—have been added to the list of medications that qualify for pass-through payments.
CMS grants pass-through status to some new medications, which allows hospitals to receive additional reimbursement for the products. Pass-through status is effective for at least two years but no more than three.
Four injectable products—eculizumab,zoledronic acid, nelarabine, and temsirolimus—will lose pass-through status starting in January 2010.
For a list of medications with pass-through status for 2010, see the table.