Cures Act Changes Reimbursement for Home Infusion
By: Ron Lanton, President, True North Political Solutions
The 21st Century Cures Act, which was signed into law by President Obama on December 13, 2016, changed reimbursement for home infusion drugs from an average wholesale price (AWP) model to an average sales price (ASP) model. This section of the new law has effectively cut reimbursement for home infusion.
Streamline your IV business with CareTend!
There are several policy issues that merged into this legislation.
- Back in 2003, Congress passed legislation that changed the price model for all drugs under Part B to an ASP model, which was ASP plus 6%. This affected most of the specialty pharmacy market except home infusion because DME infusion drugs were excluded from the change, and their prices were frozen at average wholesale prices as of October 2003. No payment for the professional services portion of home infusion was specifically offered, but AWP for the drugs as well as reimbursement for pumps and kits, generally covered the full cost of therapy.However, after several years of the exemption, Congress effectively took it away with the Cures legislation and did so because of pushback from the Office of the Inspector General (OIG). The OIG published several reports over the past few years directing the government to take out the exemption, stating that it was contributing to excessive billing and access issues.
2. The Medicare Home Infusion Site of Care Act was pushed by the home infusion industry and its trade group, The National Home Infusion Association (NHIA), to allow payment for professional services under Part B. NHIA was able to convince Congress to add the Medicare Home Infusion Site of Care Act to the Cures legislation, and this was a win for home infusion.
3. Policy issues regarding cost came into play, and CMS asked for more time to implement payment for services and urged that the price model be changed to ASP in order to cover the new professional services payments. As a result, the industry is facing lower drug reimbursement now and no payments for services until 2021.
Many see the Cures Act as a good law, but the wait time for service payments for home infusion coupled with the immediate cut in reimbursement is a major issue. A fix to this issue could be an amendment to the law in which the dates for the price model change, and the services payment start at the same time. The NHIA has stated that it is looking to introduce legislation that would make the change effective as of 2019. This would give both CMS and the home infusion industry time to adjust. For now, the price model of ASP is current law.
Next week, Jeanne Lugli, general manager of home infusion billing experts Mediware Reimbursement Services, will explain in more detail about how these changes will directly affect you and how you can respond to protect your home infusion business.