Moving target: infusion payments could shift care to hospitals.(Practice Trends)

WASHINGTON -- Now that Medicare's complex overhaul of payment for in-office infusions is underway, the Centers for Medicare and Medicaid Services ought to study the impact of those changes, physicians said at a meeting of the Practicing Physicians Advisory Council, an independent panel that advises CMS.

The changes, precipitated by the Medicare prescription drug law, will be phased in over the next few years.

Currently in 2004, Medicare is paying physicians 85% of average wholesale price (AWP), instead of the previous rate of 95% of AWP. Beginning in 2005, CMS will pay physicians the average sales price (ASP), which is lower than AWP, but it will factor in an additional 6% of that ASP rate to further reimburse physicians for drug costs.

At the same time, this year the legislation provides a temporary 32% increase in payments to physicians for administering the drugs.

In 2005, once the ASP changes go into effect, the 32% will be rescinded and the administration payments will increase by 5%, according to the American College of Rheumatology.

The bottom line is that physicians don't know what to expect once Medicare starts pinning drug reimbursement to ASP next year. "ASP is sort of this moving target," since it's not clear how CMS will define it, noted PPAC member Dr. Barbara McAneny.

Officials at CMS expect a smooth transition to the new system, which will replace overpayments for drugs and underpayments for administration with fair payments for both.