Impact to health systems unclear after OPPS, Part B payment changes

Abstract

Since the inception of Medicare’s hospital outpatient prospective payment system (OPPS) in August 2000, health systems have been disadvantaged compared with physician offices in receiving payments for drug products administered to outpatient beneficiaries, said Wayne L. Russell, senior director of pharmacy services for Premier Inc., one of the nation’s largest group purchasing organizations. “Payment rates that you have been receiving in your clinics have been much less than the payment rates that physicians were receiving for administering the same drug in their office-based practices,” he told pharmacists in December at the American Society of Health-System Pharmacists (ASHP) 39th Annual Midyear Clinical Meeting in Orlando, Florida. But, Russell said, those inequities are “starting to go away” thanks to changes in the method for payment of drugs brought about by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. In 2005, he said, hospital outpatient clinics will be paid 106% of a drug product’s average sales price (ASP) for certain new and high-cost pharmaceuticals with transitional pass-through status administered to Medicare beneficiaries—the same rate that physician offices are paid for the medications.