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From Health Law Daily, September 17, 2014

Part B drug dispensing rates greatly exceed Part D and Medicaid rates

By Harold M. Bishop, JD

An Office of Inspector General (OIG) study has found that Medicare Part B would have saved millions of dollars in 2011 if its dispensing and supplying fees had been aligned with the rates that Medicare Part D and state Medicaid programs paid. The study found that the Medicare Part B dispensing and supplying fees were six times that of Medicare Part D and four times that of state Medicaid. The OIG recommends that CMS amend its current regulations to decrease the Part B payment rates for dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid (OIG Report, No. A-06-12-00038, September 15, 2014).

Background. Medicare Part B pays for a limited number of drugs, including inhalation drugs, immunosuppressive drugs, anticancer drugs, and antiemetic drugs. Part B also pays a fee for dispensing or supplying the drugs if the fee is billed on the same claim as the drug.

For inhalation drugs, Part B pays pharmacies a $45.60 dispensing fee for inhalation drugs during the initial 30-day period. After the initial dispensing period, Part B pays dispensing fees of $26.40 for each 30-day period or $52.80 for each 90-day period (42 C.F.R. sec. 414.1001(c) and (d)).

For immunosuppressive drugs, oral anticancer drugs, and oral antiemetic drugs, Part B pays pharmacies a $19.20 supplying fee for the first prescription provided to a beneficiary in any 30-day period and $12.80 for each subsequent prescription provided to the same beneficiary during the same 30-day period. A pharmacy is limited to one $19.20 supplying fee per 30-day period even if it supplies more than one category of these drugs to a beneficiary. In addition, Part B pays a $40.00 supplying fee for the initial immunosuppressive drug prescription during the first month following a beneficiary’s transplant (42 C.F.R. sec. 414.1001(a) and (b)).

Inhalation drugs, immunosuppressive drugs, oral anticancer drugs, and oral antiemetic drugs are also available through Medicare Part D and Medicaid. Part D sponsors establish the payment rates for Part D drugs and their associated dispensing fees. Each state establishes the payment rates for Medicaid drugs and their associated dispensing fees.

Findings. The OIG found that in 2011, Part B paid $132,896,143 in dispensing and supplying fees. The OIG estimated that if Part B rates had been the same as the average Part D rates, Part B would have paid dispensing and supplying fees of $22,033,834, a savings of $110,862,309. The OIG also estimated that if Part B rates had been the same as the average state Medicaid program rates, Part B would have paid dispensing and supplying fees of $26,608,766, a savings of $106,287,377. A further payment breakdown based on drug type follows:

  • Inhalation drugs. Part B paid $52.80, $45.60, or $26.40 for inhalation drug dispensing fees, depending on the beneficiary’s history and the duration of supply. The quarterly average dispensing fee that Part D sponsors paid ranged from $4.57 to $4.65, and the quarterly average dispensing fee that state Medicaid programs paid ranged from $4.56 to $4.64.

  • Immunosuppressive, oral anticancer, and oral antiemetic drugs. Part B paid $40.00, $19.20, or $12.80 for immunosuppressive, oral anticancer, and oral antiemetic drug supplying fees, depending on the beneficiary’s history and number of prescriptions filled in a 30-day period. The quarterly average dispensing fee that Part D sponsors paid ranged from $1.81 to 1.85, and the quarterly average dispensing fee that state Medicaid programs paid ranged from $4.56 to $4.64.

CMS comment. In response to the OIG report, CMS commented that pharmacies that dispense and supply significant amounts of Part B drugs have said that the higher fees are necessary to support activities associated with dispensing the drugs to Medicare patients. Before CMS would concur with the OIG recommendation, it requested that the OIG conduct a study to identify the specific activities involved with dispensing and supplying drugs under Part B and collect information about the actual costs.

OIG response. The OIG found that pharmacists did not identify any additional clinical services or additional handling and storage requirements necessary to provide these drugs to Part B beneficiaries that would justify the substantially higher payment. For this reason, the OIG does not plan to undertake the CMS-proposed study at this time.

MainStory: TopStory OIGReports PartBNews CMSNews AuditNews BillingNews CostReportNews DrugBiologicalNews ESRDNews MedicaidPaymentNews PartDNews PrescriptionDrugNews

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