Change your paying ways for home infusion drugs, OIG says

Friday, March 22, 2013

WASHINGTON – Taking the “blunt ax” of competitive bidding to home infusion drugs is the wrong way to reduce costs, say stakeholders, but in February, the Office of Inspector General (OIG) recommended CMS do just that.

“When the only thing you look at is a calculator to do health policy, you are leaving out the whole picture of how everything works,” said Ken Van Pool, vice president of legislative affairs for the National Home Infusion Association (NHIA).

Although home infusion had been completely excluded from previous rounds of competitive bidding, infusion pumps and supplies were included in the Round 1 re-compete. 

Adding drugs to the mix only heightens concerns over patient care, say stakeholders.

“These are about the sickest patients you could possibly have,” said Russ Bodoff, president and CEO of NHIA. “Most home infusion providers will tell you that if there’s not adequate reimbursement, they walk away from some of these drugs.”

The fear is that, as seen in previous rounds of bidding on other product categories, providers with no experience in home infusion—a highly clinical and service-intensive therapy—will win bids, say providers.

“You’ll have companies receiving bids that don’t reside in a particular state or that receives a bid 3,000 miles away and wants to be drop-shipping stuff,” said Bob Simmons, owner of Boston Home Infusion in Dedham, Mass. “Somebody is going to have to suffer and it’ll be the patient.”

And forget about bid winners trying to subcontract for either the infusion equipment or the drugs, say providers.

“We would not supply drugs to somebody else supplying the pump—there’s too much liability,” said Greg LoPresti, senior vice president/CEO of Upstate Home Care in Clinton, N.Y.

The other option to reduce drug prices: A legislative change requiring that home infusion drugs be paid using average sales price (ASP) rather than average wholesale price (AWP). The OIG found that between 2005 and 2011, home infusion drug payments based on AWPs exceeded ASPs by 54% to 122% annually. Medicare spending would have been reduced by 44%—$344 million—during this time period if payment had been based on ASPs.

CMS concurred with including home infusion drugs in competitive bidding, and partially concurred with changing the payment methodology.