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Lowered Payments Challenge Infusion Providers

Kate Traynor

A federal request for Medicaid claims processors to use reduced average wholesale prices (AWPs) when reimbursing for prescription drugs leaves some home infusion providers unable to recoup their drug costs. Providers who work closely with their state Medicaid offices, however, may be able to help craft a fairer reimbursement policy.

"The new AWP system is reimbursing us at less than our acquisition costs," says Michael R. Glockling, Pharm.D., pharmacy director for Healthteam Northwest in Seattle.

In May, says Glockling, his Medicaid office adopted the new AWPs, the product of a U.S. Department of Justice inquiry. The state initially reimbursed Glockling's company at AWP minus 11 percent, plus a small dispensing fee.

"We’re working through our Medicaid office at the state capital to try to effect change," says Glockling. Washington recently eliminated the 11 percent deduction, but "that’s only a very small step in the direction we need to take," he says.

Marc H. Stranz, infusion services director at NeighborCare Infusion Services in Maryland, paints a brighter picture. "Unlike other states," says Stranz, "we do get a compounding fee...sufficient to cover most of the costs associated with providing these [infusion] therapies."

When reimbursement poses a problem, Stranz says, "we provide the service and go back to the state and say ‘Wait—this isn’t working for us.’" To emphasize its case, NeighborCare invited Maryland Medicaid officials for a visit.

"We ran our acquisition prices against the May 1 [AWP] pricing," says Stranz. With that information in hand, he showed the officials "that there probably were 50 or so drugs on that list that we could not buy at the new AWP minus 10 [percent] list....Some of the differences ranged from a penny to more than $100 difference. They hadn’t seen that before."

In addition, NeighborCare gave the Medicaid officials "an extensive tour of what it takes to provide infusion services to long-term care facilities and to home clients," says Stranz. "For most of them, it was the first time they’d seen anything like this." Although one of the officials was a pharmacist, that person had a hospital background and "hadn’t been exposed to home care."

Also, the Medicaid officials "hadn’t seen all of the Joint Commission [on Accreditation of Healthcare Organizations] requirements that we abide by in caring for these folks," says Stranz.

Home care differs from other pharmacy practice settings, notes Healthteam’s Glockling. "We are very, very much responsible for how the patient fares and what the clinical outcome is going to be."

Despite reimbursement problems, Glockling says, "We haven’t changed any level of service that we’ve provided to any of our patients."

Stranz concurs. "These folks don’t have anywhere else to go."

Click here to learn what ASHP is doing about this issue and how practitioners can take action.