CMS Announces a Delay to Implementation of Short-Cycle Dispense Component of HCR

CMS issued an important delay and change to much anticipated short-cycle dispensing rules today. Specifically CMS has delayed this part of health reform implementation until 2013 (a one-year delay) and also expanded the maximum increment for dispensing Medicare Part D covered solid oral brand drugs to beneficiaries residing in long-term care facilities (LTCFs) from 7 days to 14 days.

This is an important change and delay that industry advocates have requested given concerns about new costs related to dispensing. However at this time CMS has not opted conduct a pilot study to assess the impact and effectiveness of short-cycle dispensing. CMS did however go forward with eliminating the requirement for returning unused drugs back to the pharmacy for ultimate disposition. CMS cited conflicts with existing state and federal regulations for hazardous waste and controlled drug disposal.

Will this Congress Correct ASP Reimbursement?

Good news this week in the ongoing struggle to clarify reimbursement of drugs administered in the physician office and outpatient setting. Specifically, Congressmen Whitfield (R-Ky.) and Green (D-Texas) introduced H.R. 905 a bill to amend part B of title XVIII of the Social Security Act to exclude customary prompt pay discounts from manufacturers to wholesalers from the Average Sales Price (ASP) for drugs and biologicals under Medicare.

If passed, this legislation would be one important step to improving the consistency, accuracy and adequacy of reimbursement for infused and injected drugs administered in the physician office and clinic settings. The change is particularly important since ASP is now used as a basis for reimbursement by most payers, not just Medicare. This is one of several key changes Congress can make to correct and improve reimbursement for outpatient treatments and support patient access to care.

What can we do to expand patient access to primary care?

The lack of investment in primary care physicians and mid-level professionals is expected to be a challenge moving forward. Its clearly a challenge to managing the costs of health care in the future. In reality we already have a primary care shortage in many parts of the country including rural and low-income urban areas.

Today, at a 340B related conference in San Diego, Dr Mary Wakefield, Administrator, Health Resources & Services Administration emphasized the investment of the Health Reform (Affordable Care Act) in ensuring primary care physicians are encouraged and funded to work in under served communities, also investments in pharmacy care services in these communities are being funded to help patients have access to care. Programs and changes are rolling out now to help those who previously did not have access in rural and remote communities to have more choices.

The hope is these investments will address the projected gaps in access to primary care resources. Suggestions we have heard include:

• Expanding the role and reimbursement of pharmacy care services to support patient education and adherence. Medication Therapy Management (MTM) is a beginning but it needs to be expanded and modest reimbursement to pharmacists could create dramatic savings. Many of the Pharmacy Associations (like APhA) are leading the way with such models.
• Expand the role of community pharmacy to include a wide range of injections. This year we have seen a dramatic increase in the role of pharmacists as the leading site for patient flu shots but clearly many other types of injections could easily and conveniently be provided in the community pharmacy setting with appropriate coverage and reimbursement (including Medicare and Medicaid).
• Expanding the role and appropriate reimbursement for mid-level providers such as nurse practitioners and physician assistants could dramatically expand access to primary care.

House and Senate both Pass a 1-year "Doc Fix" to Avoid Reimbursement Cuts

Breaking news today. The House has just passed the 1-year correction to the Sustainable Growth Rate (SGR) issues that threaten to reduce Medicare reimbursement to physicians by 25% starting on January 1st. The President is expected to sign the measure into law by tomorrow. This is welcome news as it will avoid the type of drama we experienced in 2010 with fee cuts being threatened several times during the year which created a messy patchwork of temporary corrections.

This provision would reverse that reduction and extend current Medicare payment rates through December 31, 2011. The estimated cost of the provision is $14.9 billion over ten years. Please note this is a 12-month fix so this issue has not yet been permanently addressed and given the high price tag to "avoid a pay cut" it remains an issue that is very difficult to explain to Mainstreet USA but has gone on for far too many years (and now across two different administrations). We can only hope that Congress will do what's right and create a permanent fix next year well in advance of the December 31st 2011 deadline.

President signs 1-month SGR Fix -- Congress must work to avoid a Jan 1 Medicare Reimbursement Cut

Some good news and some work to be done. This week, President Obama signed a 31-day Medicare physician payment extension that will temporarily postpone a 23% reduction in the payment rate. The Senate passed the one-month payment extension on November 18, and the House passed the measure on November 29. The temporary patch extends the current Medicare payment rate until December 30, and, as such, postpones the 23% reduction called for by the sustainable growth rate (SGR) formula that was scheduled to take effect December 1st.

However more work remains for this Congress before they can recess. Without further congressional intervention, the payment cut will grow to more than 25% on January 1.
Senate Finance Committee leaders this week continued the effort they started prior to the Thanksgiving recess to pursue legislation to affect a year-long patch to prevent the Medicare payment cut scheduled to go into effect January 1. The current projected cost of a 12-month fix that many expect to be included in a Medicare “extenders package” favored by Senate Finance Committee Chair Max Baucus (D-MT) is nearly $20 billion. As yet, funding offsets to pay for a 12-month patch and any extenders that many be included in future legislation have not been revealed. Both parties appear to be working to try to address this issue for 2011 during this lame duck Congress rather than returning home to their districts with a reimbursement reduction starting on January 1st.

It is important that Congress act on this issue now and avoid a potential issue or gap in reimbursement in January that could impact Medicare beneficiary access to care and would certainly jeopardize the financial stability of some physician clinics.

Senate Passes 31-Day Medicare Physician Patch; House Action Needed After Thanksgiving

Before the Thanksgiving break, the Senate passed a measure that would create a 31-day payment "patch" to the Medicare sustainable growth rate (SGR) formula and temporarily stave off the 23% cut to physicians scheduled to take effect December 1. The legislation, called the Physician Payment and Therapy Relief Act of 2010, would continue the existing 2.2% update (expiring November 30, 2010) for an additional month through December 31, 2010, and would fully offset the cost.

The one-month physician payment update comes with a price tag of $1 billion over 10 years. The Senate's proposal would offset the cost of the patch by modifying the multiple payment procedure reduction (MPPR) finalized in the calendar year (CY) 2011 Medicare Physician Fee Schedule Final Rule by applying a 20% reduction, rather than the 25% reduction included in the final rule, to the practice-expense component for the second and subsequent outpatient physical therapy services furnished in the office setting.

The month-long patch was announced as part of a two-part deal agreed to yesterday by Senate Finance Committee leaders who will pursue a payment fix through 2011 after they win approval of the patch through 2010. The Senate's proposed fix follows lobbying by the Obama administration and physician and advocacy groups to enact a 13-month payment patch.

The House, already adjourned for the Thanksgiving recess, will take up the measure when it reconvenes, which would then prevent the December 1st reimbursement cut physicians will otherwise face. However, this 31-day fix leaves Congress with a great deal of work remaining to prevent the additional cuts that would otherwise go into effect after January 1st.

Will Medicare Part B and Part D come together?

A new CMS study released last week has revived discussions about consolidation of the Medicare Parts B and D benefits. Many of the these studies were recommended back in 2004 as part of MMA and indeed they would offer some cost savings to the Medicare program. However, there are also dramatic differences in the coverage and copayments associated with these benefits.

According to a new CMS report, consolidating benefits for three drug cohorts (anticancer, pumped insulin, and nebulizer inhalants) covered by Medicare Part B and Part D under Part D could save Medicare nearly $150 million annually, while consolidating three different drug cohorts (vaccine, injectable insulin, and metered-dose inhalers) under Medicare Part B could increase Medicare spending by $52 million annually. Medicare is considering combining payment and coverage for certain drugs under either the Part B program or the Part D program partially because of the administrative complexity of the B versus D determination process for pharmacies and medical providers.

The report, "Estimating the Effects of Consolidating Drugs under Part D or Part B, " found that while consolidation under Medicare Part D could save Medicare money, it would impact Medicare beneficiaries adversely. Because Part D has "less generous coverage rules," switching the Medicare coverage of drugs from Part B to Part D would cost beneficiaries roughly $267 in added out-of-pocket expenses. But for many specialty products the increase in patient out of pockets is dramatically higher given most Medicare beneficiaries have Medigap (or Medicare Supplemental Insurance) that covers Part B out of pocket costs for such services.