July 8, 2011—The Centers for Medicare and Medicaid Services (CMS) has proposed to budget $41.9 billion for Medicare reimbursement to hospital outpatient facilities in 2012, an increase of 1.5 percent above this year’s level. At the same time, the payment rate for separately payable drugs and biologicals would decrease by 1 percent.
In a proposed rule for the Hospital Outpatient Prospective Payment System (HOPPS), which will be published July 18, CMS said that in calendar year 2012 it will pay average sales price (ASP) plus 4 percent for drug acquisition and pharmacy overhead costs for separately payable drugs and biologicals. The payment rate for calendar year 2011 is ASP plus 5 percent rate.
CMS also proposed to continue including 340B cost data in the calculation for the payment rate for separately payable drugs and biologicals. Although the law excludes 340B data from the ASP calculation, CMS includes 340B cost data in the calculation of the additional payment for overhead costs. Safety-net hospital advocates have long urged CMS to exclude such data in order to avoid across-the-board reductions in Part B drug reimbursement for all hospitals. Hospital advocates have also pushed for the continued reimbursement of Medicare hospitals at the same rate, regardless of 340B status. CMS agreed once again to not establish a separate rate for 340B hospitals. Accordingly, 340B hospitals would be paid at the same reimbursement rates in 2012 as non-340B hospitals.
New to this year’s proposed rule is a call to recalculate cancer hospital payment adjustments annually. CMS noted that because health care reform expanded the 340B program to include free-standing cancer hospitals, cancer hospital drug costs will be lower going forward. CMS proposed to recalculate hospital-specific payment adjustments to cancer hospitals each year because of their participation in 340B. Hospital groups are evaluating this proposal.
CMS will accept comments on the proposed rule until Aug. 30 and will respond to all comments in a final rule to be issued by Nov. 1. The proposed reimbursement rates would apply to services furnished on or after Jan. 1, 2012.