[Ip-health] Compare your costs with ASP and Medicare allowable

[Joana Ramos]

This article is from Oncology News International, a trade e-journal,
which has started arriving in my inbox. The author seeks purchasing
price info form oncology practices around he US so her company can make
the case to Medicare that reimbursements need to be higher . of Note
that the article starts out by mentioning the very high and increasing
prices of the drugs, but never mentions the concept of price controls as
part of the solution. Interesting too are the ASPs listed.

Joana

------------------ original article---------------------
> The price of oncology medications is skyrocketing, and reimbursement
> rates for these agents are often inadequate. This situation may be
> hurting your medical practice more than you realize
<snip>
> Our goal is to compile data from several practices across the country
> and present this to Medicare in order to get a fair and realistic
> reimbursement for medical oncology and hematology.



September 2007 =95 Volume 16 Number 9

Cancer Care & Economics

Compare your costs with ASP and Medicare allowable




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The price of oncology medications is skyrocketing, and reimbursement
rates for these agents are often inadequate. This situation may be
hurting your medical practice more than you realize. You need to
determine what you are paying for your oncology drugs, as compared to
the Average Sales Price (ASP) and to the Medicare allowable for these
drugs.

Why smaller practices are suffering

Within our client base, we are finding that several small
oncology/hematology practices and solo practitioners are ending up in
the red relative to their oncology drugs. Here are some of the factors
influencing this situation:

=95 Smaller practices and solo practitioners don't have the purchasing
power of larger practices. Therefore, they pay higher drug prices.

As an example, the average solo practitioner in the United States can
typically purchase drugs at ASP plus 3%. This indicates that some
entities are purchasing drugs below ASP.

=95 The Medicare allowable for these drugs is ASP plus 6%. Medicare's
payment is 80% of the allowable. While this may seem to come out in your
favor, many times it does not, and you end up paying for your patients'
drugs.

=95 The drug cost that isn't covered by Medicare is covered by either
secondary insurance or paid by the patient himself. Medicare estimates
that 80% of patients have secondary insurance. Our experience at Neltner
Billing shows otherwise. Your mix of Medicare patients will impact your
collections.

Facts on Drug Costs

We have found within several solo practices:

=95 The cost of 25% of their oncology drugs exceeds the Medicare allowable
(puts them in the red).

=95 The cost of 40% of their oncology drugs is less than the Medicare
allowable but is greater than the ASP (can put them in the red).

=95 The cost of 35% of their drugs is below ASP. (Many older oncology
drugs fall into this category.)

Compiling Data

Is ASP plus 6% a reasonable number for Medicare to be using relative to
drug reimbursement? Is it enough to cover your time and resources for
drug inventory management and waste disposal? Probably not. I would like
to ask you to help us decide what the right number is by filling out the
form below. (You can also go online at
www.neltnerbilling.com/pdf/news5/ASP_table.pdf to print out the form.)

Using the table of common oncology drugs provided, please compare the
Medicare allowable cost of each drug to the cost you are actually
paying. We've left an empty column on the right side to enable you to
enter your own practice information. Don't forget to apply rebates and
discounts to your costs.

Please send us your completed table anonymously via fax to Neltner
Billing at 859-363-4986.

Our goal is to compile data from several practices across the country
and present this to Medicare in order to get a fair and realistic
reimbursement for medical oncology and hematology.



---------------------
Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramsolink.info/
www.cancersurvivorsproject.org
www.healthyskepticism.org