Medicare Reimbursement for Home Inhalation Drug Therapies Must Rise Dramatically

A study of inhalation drug therapy services provided to Medicare beneficiaries in their homes found the new 2005 Medicare reimbursement formula based on average sales price (ASP formula) would under-reimburse the actual cost of providing two key drug therapies by $68.10 per monthly supply.



The study, the largest of its kind, conducted for the American Association for Homecare (AAHomecare) 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 the Centers for Medicare and Medicaid Services (CMS) and the Government Accountability Office.



"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 ten (89 percent) 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. 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.



"We will file the study as part of our comments to CMS and look forward to cooperating closely with CMS to ensure that beneficiaries continue to have access to critical inhalation therapies," said Cox.



To see the executive summary of the study, visit aahomecare and click on Newsroom.



Homecare provides tremendous value for Americans' healthcare dollar. AAHomecare is the only national association that represents every line of service in the homecare community, including home health and home medical equipment providers, respiratory and infusion therapy, telemedicine, and re/hab and assistive technology. Representing more than 3,000 member locations nationwide, AAHomecare is dedicated to advancing the value and practice of quality, cost-effective health care services where consumers prefer them - at home.




Michael Reinemer

Director, Communications

American Association for Homecare

625 Slaters Lane, Suite 200

Alexandria, VA 22314-1171

703-535-1881

aahomecare