Medicare Finalizes Part B Drug Rates

Baltimore

In December, CMS released its long-awaited Part B drug price schedule for the first quarter of 2005, effective Jan. 1 through March 31.

As predicted, albuterol sulfate saw significant price cuts from 2004 rates, but not as drastic as some had feared. In August, CMS announced that first-quarter ASP (Average Sales Price) data from manufacturers pegged reimbursement for the drug at 4 cents per milligram. But, according to the final fee schedule, a unit dose of albuterol has a 7 cent payment limit. The payment limit for ipratropium bromide sits at 29 cents per milligram.

As mandated by the Medicare Modernization Act, this year Part B respiratory medications will be reimbursed using an ASP plus-6-percent formula. That formula, derived from manufacturer wholesale prices, cut fees so drastically that major industry players — including Apria and Lincare — had threatened to abandon the respiratory drug business if the government did not include a service fee to offset their costs.

In November, in what some observers described as unprecedented responsiveness, Medicare announced that it would add a $57 monthly and an $80 quarterly dispensing fee for the drugs.

Per MMA, the fee schedule for the Part B drugs will be updated quarterly as manufacturers submit ASP updates to CMS. To view the fee schedule, visit www.cms.gov.