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Aventis Behring:
clotting factors, IVIG & Alpha-1 therapies
Sept 4, 2003
Dear Valued Customer:
The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule on August 15, 2003, outlining four options for revising the reimbursement and payment mechanisms for all drugs and biologicals currently covered under the Medicare Part B program.
Please see our issue brief (Attached at the end of letter) outlining the four proposed options. The proposed changes would directly affect all blood clotting factor, intravenous immune globulin (IVIG) and Alpha1-proteinase inhibitor (API) therapies.
on this proposed rule up until 5:00 p.m. on October 14, 2003.
Aventis Behring is deeply concerned with how these proposals may affect patient access to care for their prescribed therapies. As such, we encourage all interested parties that might be impacted by these proposed reforms to make their comments known. Although Aventis Behring has yet to issue comments on the proposed rule, we have been actively engaged in dialogue with national consumer organizations and providers, and have prepared a complete overview of CMS's proposals in the most recent edition of Reimbursement Alert on AventisBehring.com. Reimbursement Alert on AventisBehring.com
As always, we are here to assist with any questions or concerns you may have regarding the proposed changes issued by CMS. Listed below are suggested contact points if further clarification is needed:
Centers for Medicare & Medicaid Services
Dept. of Health and Human Services
Attention: CMS-1229-P
P.O. Box 8013
Baltimore, MD 21244-8013
Sincerely,
Joseph N. Pugliese
Vice President & General Manager,
North America, Aventis Behring
ISSUE BRIEF:
CMS ISSUES A PROPOSED RULE TO REVISE AWP
he Centers for Medicare and Medicaid Services (CMS) issued a notice of proposed rulemaking on August 15, 2003. This proposed rule outlines four possible alternatives to the current average wholesale price (AWP) reimbursement formula used by Medicare to pay for Part B covered drugs, which include blood clotting factors, intravenous immune globulin (IVIG), and Alpha1-Proteinase Inhibitor (API) therapies.
The complete text of this notice can be obtained online at www.cms.gov CMS Proposes New Rules to Pay Appropriately for Medicare-Covered Drugs” (CMS-1229-P).
SUMMARY OF OPTIONS:
Option 1: Comparability
Reimbursement for all drugs and biologicals covered under Medicare Part B would be based on the same payment Medicare contractors pay in their private policyholder contracts. Payment limits for a drug would be based on the lesser of the local geographic regional payment rate, or the national payment rate established for that drug.
Option 2: Average AWP Discount
CMS would determine reimbursement based on a percentage off the average wholesale price (AWP) listing of drugs and biologicals as of April 1, 2003. CMS estimates the discount would be anywhere from 10-20% for CY 2004. The discount would then be updated annually based on increases in the Consumer Price Index. Any updates and increases in subsequent years would still be based upon the April 1, 2003, listed AWP rates.
Option 3: Market Monitoring
This option would redefine AWP as widely available market pricing (WAMP) and adjust reimbursement using General Accounting Office (GAO) and Office of Inspector General (OIG) studies and reports. WAMP would be defined as the price a prudent purchaser would pay when buying drugs from wholesalers, manufacturers, specialty pharmacies and group purchasing organizations. WAMP would be “the purchase price net of discounts, rebates and price concessions routinely available to purchasers.”
Clotting Factor Exception – Specific consideration in Option #3 is given to hemophilia clotting factor which would be reimbursed as follows:
- CY2004 80% of AWP
- CY2005 65% of AWP
- CY2006 64% of AWP
The competitive bidding model gives physicians the choice of being supplied drugs from a contracted supplier, with that supplier being responsible for billing Medicare, or the physicians could choose to purchase directly from the supplier and bill Medicare themselves. The responsible party billing Medicare would collect the 20% co-pay from the Medicare beneficiary. Blood Clotting Factors would be exempt from the competitive bidding process and would be reimbursed at ASP. Competitive bidding by region would apply to IVIG and API therapies.
Telephone: 540-948-6777 or 1-866-FOR-A1AA (1-866-367-2122) Fax # 540-948-6763
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