Drug Dispensing Fee Discrepancy Catches Industry Off Guard

WASHINGTON–In recent weeks, an uptick in denials for inhalation
drug dispensing fees has been causing some ripples in the
industry–and some larger waves for at least one major player.

On Thursday, Clearwater, Fla.-based Lincare Holdings CFO Paul
Gabos told CMS at an Open Door Forum that the company has had more
than “10,000 claim denials for these dispensing fees.”

The denials concern dispensing fees for drug refills, Gabos
said, explaining that in a regulation introduced last year the
agency said providers could ship drugs and bill a dispensing fee
for the following month, five days before the next date-of-service
starts, so that patients could receive their next month’s supply
before they run out.

Gabos said that some DMERCs–particularly Region B–are not
recognizing that five-day grace period. JoAnn Spalding of CMS told
Gabos that the agency would work with the DMERCs to resolve the
issue.

Mickey Letson, president of drug wholesaler The Letco Companies
in Decatur, Ala., told HomeCare Monday that dispensing-fee
denials have been occurring throughout the industry. Some
providers, he said, have been shipping more doses initially to
compensate so that patients would have a few doses left in case the
next month’s doses don’t arrive in time. “That may not be kosher
with Medicare, but there’s no other way to do it right now,” Letson
said.

Medicare began paying for a $57 monthly, or $80 quarterly,
dispensing fee this year when reimbursement for respiratory meds
transitioned to an Average Sales Price-plus-6-percent formula. The
fee was added in response to an outcry from respiratory giants like
Lincare and Lake Forest, Calif.-based Apria Healthcare, who said
that the drastic MMA-mandated cuts would force them out of the
inhalation drug business.