The Centers for Medicare and Medicaid Services (CMS) published their final rule, with comment period, for the CY 2006 Hospital Outpatient Prospective Payment System (HOPPS) on November 10, 2005. This article will review the key components of the final rule as they pertain to plasma-derived and recombinant therapies. CMS will allow a comment period on the final rule. Comments must be submitted to CMS no later that 5:00PM on January 9, 2006. CMS does allow for comments to be submitted by one of the following methods; 1) Electronically (new.cms.hhs.gov/ContactCMS ), 2) By regular mail (one original and two copies), 3) By express or overnight mail, 4) By hand or courier delivery. Interested parties who wish to comment can find instructions and mailing addresses in the final rule at www.cms.hhs.gov/Transmittals/2005Trans/List.asp.

Background

When the Medicare statute was originally enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, Congress mandated replacement of reasonable cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), enacted on august 5, 1997, added section 1833(t) to the Social Security Act (The Act) authorizing implementation of a PPS for hospital outpatient services. Pursuant to subsequent legislation, special payments under the HOPPS were provided under Section 1833(t)(6) of the Act for certain drugs and biologic agents. These special payments were deemed “transitional pass-through payments”, and were to be in place for no more than a three (3) year period. Plasma-derived and recombinant therapies were subject to the “transitional pass-through payments”, with reimbursement being established based upon a combination of average wholesale price (AWP) and median cost information up until December 31, 2005.

HOPPS Final Published Rule for CY2006

Major changes to the reimbursement for plasma-derived and recombinant therapies provided in the hospital outpatient setting have been published in the final rule for CY2006. The most dramatic change in reimbursement is the methodology Medicare will use to calculate and reimburse plasma-derived and recombinant therapies. The final rule changes the methodology for reimbursement from an AWP based model to an average sales price (ASP) plus 6 percent methodology. The ASP plus 6 percent reimbursement methodology has been in existence for plasma-derived and recombinant therapies since January 1, 2005, for physician offices and suppliers, and payment rates are computed and updated on a quarterly basis. CMS in its final rule is obviously looking to establish congruency of reimbursement for drugs and biologicals under all Medicare sites of service. CMS will adjust the HOPPS rates on a quarterly basis, just as it does so for physicians and suppliers. The same methodology for calculating payment rates for each Healthcare Common Procedure Coding System (HCPCS) code for a drug or biological will mirror existing policy under the Medicare Part B program (i.e., manufacturers will submit their ASP and total number of units sold in a given calendar quarter for each national drug code (NDC) number, and CMS will compute a volume-weighted average to arrive at a single payment rate for each HCPCS code.

CY2006 Payment Rates

The chart below illustrates the first quarter CY2006 Medicare Part B rates. HOPPS payment rates will most likely mirror these rates as well:

HCPCS Code	Description	Unit of Measure	Payment Rate
G 0332	Preadministration-related services for intravenous infusion of immunoglobulin, per infusion encounter (service is to be billed in conjunction with the administration of immune globulin)	N/A	$75.00
J 0256	Injection, alpha1 – proteinase inhibitor, human	Per 10 mg	$3.23
J 1566	Injection, immune globulin, intravenous, lyophilized	Per 500 mg	$22.22
J 1567	Injection, immune globulin, intravenous, non-lyophilized	Per 500 mg	$28.36
J 2790	Injection, Rho(D), immune globulin, human	Per 300 mcg	$88.40
J 2792	Injection, Rho(D), immune globulin, intravenous, human, solvent detergent	Per 100 IU	$13.66
J 7188	von Willebrand factor complex, human	Per IU	$0.87
J 7189	Factor VIIa, coagulation factor, recombinant	Per 1 mcg	$1.04
J 7190	Factor VIII, anti-hemophilic factor, human	Per IU	$0.66
J 7192	Factor VIII, anti-hemophilic factor, recombinant	Per IU	$1.06
J 7193	Factor IX, anti-hemophilic factor, purified, non-recombinant	Per IU	$0.89
J 7194	Factor IX, anti-hemophilic factor, complex	Per IU	$0.68
J 7195	Factor IX, anti-hemophilic factor, recombinant	Per IU	$0.99
J 7198	Anti-inhibitor	Per IU	$1.30

ZLB Behring’s Toll-Free Reimbursement Answerline can be reached at 1-800-676-4266 for any questions or concerns regarding the information provided in the Reimbursement Alert publication.

REFERENCES:

Department of Health and Human Services: Centers for Medicare and Medicaid Services. 42 CFR Parts 419 and 485 (CMS-1501-FC). Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2006 Payment Rates.

ZLB Behring assumes no responsibility for the individual interpretation of any material, facts, or references provided within the context of its publication of Reimbursement alert.

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Reimbursement Alert December 2005

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ZLB Behring assumes no responsibility for the individual interpretation of any material, facts, or references provided within the context of its publication of Reimbursement alert.

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