Hospitals’ outpatient drug costs receive increased scrutiny

Abstract

In finalizing the hospital outpatient prospective payment system for 2009, the Centers for Medicare and Medicaid Services (CMS) modified the formula behind the payment rate for certain medications. CMS also eliminated a temporary pre-administration service fee and reduced the number of codes for reporting drug administration services. The changes, described in the November 18 Federal Register, go into effect on January 1. While CMS did not invite comment on those changes, the agency expressed interest in hearing from the public how the federal drug-pricing program known as 340B affects hospitals’ medication costs. For the second consecutive year, CMS decreased the markup in the formula that sets the payment rate for what are known as separately paid medications. The formula for the coming year is as follows: manufacturer-reported average sales price (ASP) + 4%. This formula, in general, applies to new medications, serotonin type 3-receptor-antagonist antiemetics when given to patients undergoing cancer chemotherapy, and medications whose estimated average acquisition cost for one day of therapy exceeds $60.