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CMS's New Payment Plan Angers Pharmacists

Donna Young

Some 15 health professionals rose early on Tuesday morning at ASHP Summer Meeting 2002 to discuss strategies for dealing with a new government rule that will reduce the payments for drug products with "transitional pass-through" status under the Medicare hospital outpatient prospective payment system (OPPS).

"If people truly knew what was going on, this room would be packed and people would be lined up at the door," said one session attendee.

Centers for Medicare & Medicaid Services (CMS) Administrator Thomas A. Scully was scheduled to speak at the session but was unable to attend.

Gary C. Stein, Ph.D., ASHP’s director of federal regulatory affairs, led the forum.

CMS had announced at a special town-hall meeting in April that the agency will remove 211 of 247 drug products from pass-through billing status, Stein said. The agency is developing billing options for those 211 drug products, he said, and will announce the change in a proposed rule expected for release in mid-July.

Wayne L. Russell, Pharm.D., FASHP, a member of ASHP’s Council on Legal and Public Affairs and director of pharmacy at Novation LLC, said many hospitals are not aware that a reduction went into effect April 1.

"CMS never published on their Web site what the new payment was for each drug," he said. Instead, CMS created a formula, and health systems "had to go out and calculate on [their] own."

Russell estimated that many health systems will lose from $200,000 to over $1 million each year in reimbursements because of CMS’s new payment plan.

Ernest R. Anderson, M.S., of Lahey Clinic in Burlington, Mass., said his hospital analyzed the new reimbursement rates and figured it will receive "$427,000 below the cost of the drugs, based on our current volumes."

Patrick E. Parker, M.S., of Lawrence Memorial Hospital in Lawrence, Kan., said he also struggled with calculating the new reimbursement rates.

"When the tears started, I just gave up," he said.

Parker said he is aggravated that the government has provided pharmacists with little information on the reimbursement rates. And he is angry that CMS did not participate in the Tuesday morning session.

"We can’t get the government, who we are paying to take care of us, to even show up to the conversation, to show up to the table," he said.