Part B Reimbursement for Drugs to Change in Physician Offices
By Susan Theuns, PA-C, CPC, CHC
CMS has proposed a new Part B drug payment model that may adversely affect your bottom line.
Beginning in August, 2016, CMS may be applying a new methodology geared toward reducing profits on expensive drugs. The current model is average sales price (ASP) plus 4% — it is advertised as ASP plus 6% but then a 2% sequestration is applied so it is net 4%. On drugs that cost more than $480, the percentage will be reduced more since the percentage may be the same but the actual dollar amount increases above their comfort threshold. So, the reimbursement proposal will be for less than the ASP + 6%.
Part of the study will be at the current methodology and the second arm will be at ASP plus 2.5% plus a daily fee of $16.80. Of course, these will be subject to the 2% sequestration as well. This is a cost saving study for CMS that narrows the margin of profitability for the providers. Unlike relative value unit methodologies, there is no overhead built into pass-through drug reimbursement so it becomes critical that providing Part B reimburseable drugs is not a loss leader for providers. This makes where you purchase your drugs one of the most important parts of the process. Be sure to get pricing from distributors or manufacturers direct at or below ASP, also figuring into the equation the shipping costs when ordering.
The good news is that exclusions for the new methodology are flu, pneumonia, and hepatitis B vaccines as well as drugs in short supply, those used for end stage renal disease, and drug infused durable medical items. Bundled drugs are also excluded but are currently included in the visit/procedure so no real change there. It will be interesting to see what the outcome of this trial methodology reaps.
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Susan Theuns, PA-C, CPC, CHC, is the administrative director of physician practices at MedStar Union Memorial Hospital in Baltimore, Maryland. In addition to her certifications, she holds degrees in Allied Health, Business Management and Leadership & Education. Theuns serves as a national advisor and is a contributing author for The Business of Medical Practice, 3rd edition. She is a member of the Baltimore, Maryland, local chapter.
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