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Medicare Change on Home Drug Treatments Cuts Provider Pay 77%

July 3, 2019, 9:43 AM

Companies that provide treatment for Medicare patients who receive intravenous drugs at home say Medicare’s new reimbursement policy has created a revenue shortfall that’s causing some suppliers to turn away patients who need it.

Infusion medications are administered by needle into the bloodstream or by catheter into the stomach or intestine, using equipment like a pump. They treat infections, cancer, gastrointestinal diseases, congestive heart failure, hemophilia, immune deficiencies, rheumatoid arthritis, and a host of other ailments.

Smaller regional providers dominate the industry, but some larger players include Accredo Health Group Inc., a subsidiary of Express Scripts Holding Co., BioScrip Inc., and Coram CVS Specialty Infusion Services, a division of CVS Health Corp.

Payments from the government to the home infusion companies typically total about $262 million a year, according to National Home Infusion Association. But under a Medicare reimbursement policy that took effect this year, payments to home infusion providers are expected to fall 77% in 2019 to about $60 million, the group says.

At issue is a Medicare home health final rule that home infusion companies can only get reimbursed for services when a nurse or some other skilled professional is present in the patient’s home during the treatment

The association sued the Centers for Medicare and Medicaid Services to invalidate the new payment policy and to reimburse home infusion suppliers for “any amounts improperly withheld as a result” of the change.

Government Seeks Dismissal

The government has moved to dismiss the case, asserting that the district court lacks jurisdiction to hear the dispute because the association didn’t first exhaust administrative remedies to resolve the matter. It also asserts that the policy is consistent with the intent of Congress and follows federal law.

If Congress wanted infusion companies to be paid for each day a patient receives a drug infusion, those receiving daily treatments would be forced to pay a 20% co-pay every day of the week for the therapy and another 20% for equipment, supplies, and the drug.

That would cost patients $10,000 a year, which “further supports CMS’s view that Congress did not intend payments [for] every day a drug is infused when so high a cost would be borne by beneficiaries,” a government brief asserts.

No More Referrals

The payment cuts are forcing some infusion providers to stop taking referrals for Medicare patients, the association said. That could lead to access problems, particularly for patients in rural areas where fewer home infusion providers operate, it alleges.

“We still continue to take care of patients that are Medicare recipients who are on this therapy. But we can’t take care of all of them, because we can’t afford to,” said Drew Walk, CEO of Soleo Health, a national home infusion provider.

Walk said Soleo is facing Medicare payment cuts of more than $1 million this year. Most of the reduction stems from Medicare patients who receive inotropic infusion therapy for end-stage congestive heart failure and immunoglobulin therapy for patients with depressed immune systems.

Private Insurers Pay

Private insurers and other government payers, including Medicare Advantage and TRICARE, don’t have such a requirement and typically pay infusion companies for each day a patient receives the treatment.

Infusion companies say they deserve the daily payments even if they’re not in the home because they provide remote counseling, patient monitoring, and around-the-clock access to professionals who assist patients who administer the drugs themselves.

In its lawsuit filed in the U.S. District Court for the District of Columbia, the association seeks an expedited summary judgment, alleging the payment rule violates the federal Balanced Budget Act. That legislation requires payment for each home infusion “calendar day,” which the association interprets to mean every day a patient receives the therapy—regardless of whether a medical professional is present.

“We’re urging the court to enforce the law as written and not let CMS add or subtract from the law,” said David Farber, the association’s attorney.

The U.S. home infusion therapy market is expected to grow from $7 billion in 2017 to more than $13.5 billion by 2024, according to Global Market Insights.

The case is National Home Infusion Association v. Azar, D.D.C., No. 1:19-cv-393, filed 2/14/19

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com