Respiratory Drug Access at Risk

The Medicare Modernization Act (MMA) mandated that respiratory providers no longer be reimbursed at a percentage of the average wholesale price (AWP) for respiratory medication. Instead, starting January 2005 Medicare will reimburse the drugs at the average sale price (ASP) plus 6 percent.

While the MMA required the General Accounting Office (GAO) to determine whether current payment for inhalation therapies is adequate, the report will not be completed until late this year. As a result, we believe that there will not be adequate time for Congress to consider the GAO findings and take necessary actions to modify this provision before ASP reimbursement begins.

The American Association for Homecare strongly believes that this level of reimbursement will fall short of covering operating and administrative costs associated with providing respiratory drugs and services and will cause the home care community to suffer a catastrophic reduction in revenue.

Currently, the Centers for Medicare and Medicaid Services (CMS) does not have any reliable data on the actual costs of providing services in the home care setting. To ensure that Medicare beneficiaries have access to respiratory drugs, AAHomecare plans to submit a study to CMS that will show both operational and administrative costs associated with providing respiratory drugs and services. This study will provide the industry with the data necessary to make a compelling argument to key policymakers. Ideally, this data will help CMS reset these rates to reflect the real-world impact of this change for the Medicare beneficiaries we serve.

To this end, AAHomecare has contracted with Muse & Associates to help us achieve this goal. This study is expected to help AAHomecare provide CMS with an accurate representation of the costs incurred by respiratory providers when furnishing home inhalation therapy, including both direct and indirect operating and administrative costs and expenses.

The collected data will include basic cost and revenue information, as well as more specific pharmacy statistics. In addition, respiratory providers will be asked to describe the services rendered to patients in greater detail. In the end, AAHomecare hopes to convey the message that both operational and administrative costs should be recognized as legitimate costs associated with providing respiratory medication.

We need every company that currently provides respiratory medications to Part B beneficiaries to participate in this survey, regardless of whether or not they are AAHomecare members. To have any credibility with CMS and with Congress, the study needs hundreds of participants.

If you are a respiratory provider, we cannot emphasize enough how important your participation is toward ensuring that you will be able to continue to supply aerosol medication. All submitted data will be held in strict confidence and will not be shared with any other entity except in aggregate form.

It is important that we use this time to gather as much data and speak with a unified voice to ensure beneficiary access to these drugs. Remember, we only have seven months left before ASP goes into effect, and a limited time in which to collect and present the data to CMS officials.

If you are interested in participating, please e-mail Asela Cuervo, senior vice president and general counsel, at [email protected], or Penelope Solis, chief of staff, at [email protected], with the following information: company name, the contact person who should receive the survey, and the contact person’s phone number and e-mail address.

Kay Cox is president and CEO of the American Association for Homecare, Alexandria, Va. For more information about AAHomecare, visit www.aahomecare.org, or call 703/836-6263.