OIG Says Reimbursement for Inhalation Drugs Excessive

Washington

Medicare reimbursement for ipratropium bromide and albuterol continues to be at higher levels than that of other payers — even after 2004 reimbursement reductions. That’s according to Department of Health and Human Services’ Office of Inspector General reports titled Update: Excessive Medicare Reimbursement for Ipratropium Bromide and Update: Excessive Medicare Reimbursement for Albuterol, both released last month.

The reports say that Medicare could have saved $263 million in 2002 if the federal program had used the Medicaid federal upper limit amount for albuterol reimbursements, and $386 million by reimbursing ipratropium bromide at the upper limit amount.

The 2004 reimbursement reductions for the Part B drugs, to 80 percent of the Average Wholesale Price, were among the first changes to become effective under the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). Acknowledging that payment rates had been reduced since it conducted reviews of the drugs, the OIG said that although not as high as previously estimated, “significant savings” would still result by reimbursement at the upper limit amounts. The report on ipratropium bromide termed it “disconcerting” that the Veterans Administration is able to purchase the drug for one-eighth of Medicare’s reimbursement rate.

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