QUESTION & ANSWER Medicare Vs. Suppliers Cost By Jeffrey Kaufman MD, FACS California Medicare Carrier Advisory Committee, WSAUA Health Policy Chair, AACU Past-President PRINTABLE VERSION

QUESTION:
The Mitomycin bladder instillation is a common procedure which requires drug code J9291. I find that Medicare only pays half of my suppliers cost. How are other urologists managing this issue?

ANSWER:
The federal regulations regarding part B payments for medications provided by physicians in their offices limits payment to Average Sales Price +6% in an effort to decrease overall program costs and limit perceived profit taking by physicians. Unfortunately, the reported average sales price is that of the manufacturers even though many drugs are not available to physician providers except through a wholesaler, retailer or other middleman who mark up the cost. This mark up is not accounted for by CMS in their ASP+6% calculations. The medical oncologists took their case to CMS and were successful in arguing for higher reimbursement. However, even though the AUA has had an opportunity to make a similar argument (and emphasized that bladder cancer drugs were especially a problem), CMS has turned a deaf ear to our concerns and refused to increase payment. They have been warned clearly and strongly that such action will lead to denial of access to care for Medicare patients who require therapy if physicians are forced to lose money when providing that care.

The problem you face is shared by everyone across the country. Several drugs simply are not available to us at a cost that matches ASP+6% let alone at a low enough purchase price to allow any profit. Additionally, even if you could buy it for ASP+6%, the other overhead costs associated with obtaining, stocking and providing the medication would cause you to lose money with each treatment. Your options at the present are limited to absorbing the loss, denying treatment to the patient or "brown bagging" the prescription. This means writing the prescription for the patient to obtain the medication at an outside pharmacy at his own expense and then bring it with him to the office for you to administer. Naturally, this cost would not be reimbursed to the patient(although there is a possibility that it could be covered under the patient's part D Medicare plan subject to co-payments and the doughnut hole gap in coverage). However it would take you out of the loop and put the burden on the patient who would logically write to his Congressman to complain and ask that the system be modified. This is the only recourse open at the moment. We continue to lobby CMS and Congress to modify the ASP+6% cost limitation just as we maintain pressure to suspend the LCA (least costly alternative) policy which applies mostly to LHRH agonists at the present time.

I strongly encourage you to write your Congressman and explain this dilemma. Emphasize your desire to continue to provide care to your patients but your inability to do so caused by the ASP+6% limit on drug payments. Point out how this particularly impacts various bladder and prostate cancer drugs and ask for his help. This issue has been brought to CMS who claims they lack legislative ability to repair the problem. Only an amended law from Congress can fix this challenging problem. At the same time, I encourage you to join the AACU if you do not already belong and contribute to UROPAC, our specialty political action committee. It is only through strength in numbers and financial power that we can gain access to the political offices and make our arguments heard.

Disclaimer: "Question & Answer" is published by the California Urological Association as a service to CUA members. Your comments are welcomed. The California Urological Association, Inc. (CUA) believes the information in this newsletter is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any kind are disclaimed. This newsletter is not intended as legal advice nor is the CUA engaged in rendering legal or other professional services.