Reimbursement Boost Tops ASHP Recommendations to CMS Proposed Changes

9/30/2008

A drug reimbursement rate proposed by the Centers for Medicaid and Medicare Services (CMS) should be increased, otherwise it would not cover health-system pharmacy costs, particularly managing medications, ASHP told the agency in a comment letter.

ASHP warned CMS that if it reimburses separately paid drugs at average sales price (ASP) plus 4 percent, pharmacy departments would be left with a costly burden while providing necessary patient care. The Society strongly urged CMS to set that rate at no less than ASP plus 6 percent.

ASHP submitted several recommendations on CMS’ proposed changes to the Hospital Outpatient Prospective Payment System (HOPPS). The CMS changes would lower reimbursement and payment rates for medications and blood clotting factors and require use of Healthcare Common Procedure Coding System (HCPCS) for all drugs.

In support of its recommendation, ASHP cited the Medicare Payment Advisory Commission’s June 2005 report to Congress. The report said pharmacy overhead costs are significant, and range from 26 percent to 28 percent of departments’ direct costs. The remaining costs are attributed to drug acquisition, the report said.

CMS is expected to issue a final rule on the proposed changes to HOPPS in early November.

Read ASHP’s comment letter to CMS.