Medicare drug reimbursement causing concern.(Practice Trends)

WASHINGTON -- Medicare's new methodology for determining how much to pay for drugs administered in the doctor's office is raising physician concerns even before it's implemented.

Members of the Practicing Physicians Advisory Council, which advises Medicare on issues of concern to physicians, said at a meeting that they were distressed that the Centers for Medicare and Medicaid Services had published prices for only about 30 of the 450 drugs that were expected to be reimbursed under the new Average Sales Price (ASP) system.

"We need those data early so we can make business decisions about how we're going to practice," said council member Dr. Ronald Castellanos, a Cape Coral, Fla., urologist who added that the published list included only three of the drugs he prescribes.

"I don't know how you expect us as small businessmen to be able to plan ahead, to budget," he said, noting that he expects to lose money under the new system. "I'm going to have to lay off staff. I'm going to have to close satellite offices. I'm going to have to stop giving treatments because I can't afford to give patients medications when I lose money."

Under the old Average Wholesale Price system, Medicare greatly overpayed for the drugs, which more than made up for the fact that doctors were not paid an administration fee; the payment also offset the lower reimbursement doctors were getting from other insurers.

Under the new system, providers will get a small administration fee combined with a much lower drug payment in many cases.

Dr. Castellanos noted that he is the only urologist who takes Medicaid in a five-county area. "Why do I do it? Because I was making the money up on cost shifting. I can't do that anymore."