Headline News
When Payment Changed, So Did Drugs, Says OIG
WASHINGTON—Utilization of albuterol and levalbuterol
shifted as payments changed for the inhalation drugs, according to
an HHS Office of Inspector General report.
Released Sept. 2 (the same day as the OIG's August report
on power
wheelchair payments), the report was conducted to
determine whether shifts in utilization for the drugs coincided
with changes in Medicare payment and coding policy. The short
answer is yes, the OIG said.
In 2003 and 2004, albuterol and levalbuterol were included in the
same payment code and had the same Medicare payment amount based
on the average wholesale price of the drugs, used primarily to
treat asthma and COPD. In those years, the OIG said, Medicare
reimbursement favored albuterol, and nearly all beneficiaries (97
percent) received that drug.
“Specifically, in the fourth quarter of 2004, Medicare paid
suppliers an average of almost five times more than their cost for
albuterol, but significantly less than their cost for
levalbuterol,” the report said.
But when
payment and coding changes in
2005 resulted in higher reimbursements for
levalbuterol than for albuterol, the report found a quarter of
beneficiaries who had been prescribed albuterol in 2004 were
switched to levalbuterol between 2005 and 2007.
And in 2007 when CMS changed the reimbursement policy
again—to a single payment amount for both drugs based on
average sale price—“suppliers were being reimbursed at
almost 10 times their cost for albuterol, but roughly half their
cost for levalbuterol,” the OIG found. “After this
payment and coding change, two-thirds of the beneficiaries in our
sample who received levalbuterol as of June 2007 were changed to
albuterol.”
As a result, the OIG cautioned, when Congress and CMS make coding
and reimbursement decisions, “it is important they take into
consideration that the new policies may affect what drug a
beneficiary is prescribed.” In some cases, the report
continued, “this may limit access to a potentially more
effective product; in others, utilization could be driven toward a
more expensive product that offers no clinical
advantage.”
