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New average sales price reimbursement method affects hospitals

Patient Financial Services Weekly Advisor, June 4, 2004

Average sales price (ASP) will be the new method CMS will use to reimburse physician practices for the Part B drugs and biologics they administer, as part of provisions in the Medicare Modernization Act of 2003.

This system, which takes effect January 2005, will all but force practices to learn a new competitive drug-acquisition program, use direct-supply for office-based drugs as part of managed care contracts, and shift Medicare patients back to hospitals for certain procedures, such as infusions, says Robert Homchick, a partner in Davis Wright Tremaine's health-law practice in Seattle.

Those who administer Part B drugs and biologics must choose to contract with specialty pharmacies to purchase and deliver drugs, and will be responsible for billing Medicare for drugs and collecting co-pays from patients.

Industry experts say as a result of Medicare reform, more procedures will shift to the hospital setting. Hospitals CFOs must determine the future of their "infusion center" revenue streams and determine whether they want to "bid out" everything to specialty pharmacies, adds Nick Opalich, a consultant and former specialty pharmacy owner.

Opalich and Homchick join HCPro in an audio conference June 23 to address this pressing issue and give providers information to plan ahead. To learn more or sign up, click here or call 800/650-6787 and ask about "Average Sales Price: The Impact of Medicare's New Drug Reimbursement Method."

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