CMS proposes OPPS changes

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to revise the Medicare hospital outpatient prospective payment system (OPPS) and to set payment rates for 2005. Under the proposed rule, CMS plans to change pass-through payment status for drugs and biologics whose status expires in 2004 and 2005. Pass-through payments were established for new drugs to provide payment based on hospital acquisition costs while CMS collects data to set future reimbursement rates. By law, pass-through status must last at least two years but no more than three.

Under the proposed rule, drugs with pass-through status that expires in 2004 will transition to the proposed single source drug rate of 83%-95% of average wholesale price (AWP). Pass-through drugs expiring in 2005 would be reimbursed at a rate equivalent to the rate proposed in last month's proposed Physician's Fee Schedule for 2005 for Part B drugs, which is based on the average sales price (ASP) (see BioCentury Extra, Wednesday July 28, 2004). ...