Proposed Drug Handling Payment Dropped in 2006 HOPD Final Rule; Negative Impact for Hospitals and Patients
The Centers for Medicare and Medicaid Services (CMS) released the Final Rule: Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2006 Payment Rates on November 2, 2005.
On Jan. 1, 2006, CMS will begin paying for most Part B drugs and biologicals administered in hospital outpatient departments (HOPDs) based on 106 percent of the manufacturer’s average sales price (ASP). According to CMS, the most recent available hospital claims data indicate that payment set at 106 percent of ASP will cover both the average acquisition cost and associated overhead cost for drugs furnished in hospital outpatient departments. This final decision marks a substantial change from CMS’ initial proposal to pay an additional 2 percent of ASP for drugs and biologicals for 2006 and 2007 to cover pharmacy service and handling costs for drugs, biologicals, and radiopharmaceuticals delivered in the hospital outpatient department.
CMS also made changes to drug administration services, while several other proposals for 2006 were not adopted, but the agency will continue to evaluate them and other options to improve the accuracy of payment for certain outpatient services:
- CMS adopts 20 of 33 new CPT codes and creates 6 new HCPCS codes for drug administration services. Despite seeking consistency with the use of CPT codes across settings and rejecting arguments that some of the coding rules are too complex for hospitals, compared to the physician office side, CMS created 6 new C codes that describe the highest volume services. Hospitals will be required to use a combination of CPT and C codes.
- The table available here compares changes in drug administration reimbursement rates in 2005 and 2006. While some rates drop by as much as -8 percent between 2005 and 2006, many reimbursement rates for drug administration increase between 3 percent to as high as 19 percent.
- Hospitals will receive a $75 temporary add-on payment to cover the additional preadministration-related services required to locate and acquire adequate IVIG product and prepare for an infusion of IVIG. CMS notes market instability, access concerns, the growing demand for IVIG, as well as the move to an ASP payment methodology for IVIG in the OPPS for CY 2006 as justification for the add-on payment.
- CMS has decided not to finalize its proposal that would have reduced OPPS payments for some second and subsequent imaging procedures performed within the "identified families" by 50 percent.
- Rather than adopting the national set of coding guidelines developed by the AHA/AHIMA expert panel, CMS has engaged a contractor to assist with testing the validity and reliability of a slightly modified draft of the guidelines recommended by the expert panel.
CMS will also consider additional comments on the payment classification assigned to HCPCS codes identified in Addendum B of the Final Rule with the NI comment code and other areas specified through the preamble if received within 60 days after the date of publication.
Don Jewler, Communications Director
