2006 proposed fee schedule - American Society of Clinical Oncology

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albuterol and ipratropium bromide.1 For example, supplier’s
acquisition costs were estimated to be 34 percent of AWP for
ipratropium bromide and 17 percent of AWP for albuterol
based on averaging results from a GAO and an OIG study.2
The MMA changed the Medicare payment methodology for many
Part B covered drugs. As an interim step, in CY 2004,
Medicare paid a reduced percentage of AWP, 80 percent of AWP
in the case of albuterol and ipratropium bromide. Beginning
with CY 2005, Medicare paid for nebulizer drugs at 106
percent of the ASP. The move to the ASP system represented
a substantial reduction in reimbursement for the high volume
nebulizer drugs.
In addition to paying for the cost of the drug itself,
Medicare has paid a dispensing fee for inhalation drugs.
Prior to CY 2005, Medicare paid a monthly $5 dispensing fee
for each covered nebulizer drug or combination of drugs
used. In the Revisions to Payment Policies Under the
Physician Fee Schedule for Calendar Year 2005 proposed rule,
published August 5, 2004, we proposed to continue to pay a
dispensing fee for these drugs. In that proposed rule, we
sought comment on an appropriate dispensing fee level to
cover the shipping, handling, compounding, and other
1GAO, “Medicare Payment for Covered Outpatient Drugs Exceed Providers’ Costs,” September 2001. OIG, “Excessive Medicare
Reimbursement for Albuterol,” March 2002. OIG, “Excessive Medicare Reimbursement for Ipratropium Bromide,” March 2002.
2 For more details see the Interim Final Rule regarding Changes to Medicare Payment for Drugs and Physician Fee Schedule Payments
for Calendar Year 2004 published in the Federal Register on January 7, 2004.