Providers pounce on closed loophole
Skip to main content
Sister Publication Links
  • Modern Healthcare Metrics
MDHC_Logotype_white
Subscribe
  • Subscribe
  • Register
  • Login
  • News
    • This Week's News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • House Democrats would use drug-pricing bill savings to expand Medicare benefits
      Analysts to CommonSpirit Health: Show us the savings
      Employers, insurers, unions urge full repeal of Cadillac tax
      McLaren Healthcare plans to acquire Ohio hospital
    • Primary-care provider ChenMed to enter five new markets
      Lacking specialist access drives health disparities
      Genetic Counseling
      Addressing barriers
 to expanding 
genetic counseling
      2,200 University of Chicago nurses ratify contract
    • Silver-loading, CSR elimination lowered premiums for some rural enrollees
      Centene to sell Illinois plan to CVS Health
      Blue Cross of Idaho unveils souped-up short-term health plans
      Health insurers' debt obligations have soared in the last decade
    • MedPAC says ambulatory surgical centers don't need a pay raise
      States focus on healthcare costs to address coverage problems
      Hospitals sue HHS over negotiated price disclosure rule
      Michigan governor: Legislature should help pause Medicaid work rules
    • Analysts to CommonSpirit Health: Show us the savings
      Smallest hospitals saw biggest earnings gains last month
      Sutter Health postpones financial filing
      doctor helping patient stock image Sandoz
      Sponsored Content Provided By Sandoz
      As hospital executives look to reduce costs, biosimilars offer a compelling option
    • astronaut
      Astronauts developed bloodstream issues in space
      Sponsored Content Provided By ABM Healthcare
      Protecting and Maintaining Medical Devices
      human hand robotic hand stock image
      Sponsored Content Provided By Deloitte
      The Health System of the Future: How Digital Health Technology is Transforming Care
      EHR
      EHR vendors most in-use throughout Medicare incentive program
    • MRIs of dense breasts find more cancer but also false alarms
      Flu season takes off quickly in Deep South states
      Uber driver says South Carolina hospital dumped patient on him
      1 in 3 adults age 45 and older reported being lonely in a 2018 AARP survey
      Data Points: Loneliness and its impact on health
    • Mayo Clinic taps Dr. John Halamka to lead its Google partnership
      Jay Shannon out as CEO of Cook County Health
      Cleveland Clinic names Dr. James Merlino as chief clinical transformation officer
      Former Cone Health CEO Dennis Barry dies
    • Midwest
    • Northeast
    • South
    • West
  • Special Features
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
      Doctor running
      Plain language alerts help Piedmont Healthcare patients, staff avoid confusion
    • Linda Kenney
      Patient advocate recalls two medical errors that nearly killed her
      Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Kim Hollon
      Hospitals fall short of patient-safety goals 20 years after 'To Err is Human'
      Dr. Mark Chassin
      One-size-fits-all approach to patient safety improvement won’t get us to the ultimate goal—zero harm
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Paging Dr. Robot: Artificial intelligence moves into care
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • ProMedica doubles down on social needs data analysis
      Amazon taps first pharmacy for Alexa Rx management
      Trump administration unveils new price transparency rules
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
    • Home health to pare down therapy services, up telehealth offerings
      Amazon launches medical transcription service
      Hospitals' uncompensated care continues to rise
      Supply chain tweaks could help average hospital hire up to 165 more nurses
    • Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
      UPS to kick off drone delivery service with hospital campuses
    • Value-based pay still struggles to improve costs, quality
      Hospitals sue HHS over negotiated price disclosure rule
      Bundled payments get a boost in two states with employee programs
      CMS wants primary-care docs to take on financial risk
  • Data/Lists
    • Rankings/Lists
    • Data Points
    • Modern Healthcare Metrics
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Steve Strongwater
      How Atrius Health stayed independent by not shying away from risk
      Why moving the VA to a new EHR was a pivotal decision
      Why AdventHealth's rebrand was more than a name change
    • Terry Shaw
      A diverse and inclusive culture should empower others
      Paving the path to diversity and inclusion
      The next step in healthcare evolution
      Breaking Bias: A road map to boost women and minorities into healthcare leadership
    • David Dill and Keith Myers
      Healthcare partnerships are a proven path to better care, healthier communities
      Health systems need to devote more resources to caring for the caregivers
      Chip Kahn and Alan Morgan
      Rural healthcare needs innovation, policy changes to survive
      Fawn Lopez and Bernard Tyson
      In remembrance and gratitude for a life well-lived
    • Hospital with money
      Letters: Let providers set their prices,
 and then publish them all
      Letters: Ambulatory surgery centers aren't getting a break on regulation
      Letters: Rising Medicaid spending isn't a windfall for providers
      Letters: The complexity of prior authorization runs deep
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Nominate
    • Award Programs
    • Previous Award Programs
    • Other Award Programs
    • Nominations Open - Top 25 Minority Leaders
      Nominations Open - Health Care Hall of Fame
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • Kronos webinar logo lockup
      Sponsored Content Provided By Kronos
      Webinar: The Future of Work in Healthcare
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Critical Connections: Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Health Care Hall of Fame Gala
    • Top 25 Women Leaders Gala
    • Best Places to Work Awards Gala
    • Top 25 Minority Leaders Gala (2020)
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. News
November 19, 2001 12:00 AM

Providers pounce on closed loophole

Figures climb even as other products cost less

Jonathan Gardner
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    As lawmakers prepared to throw overboard a Medicare reimbursement loophole that inflates outpatient prescription drug payments, provider groups, smelling blood, began circling to feast on the carcass.

    A group of Republican lawmakers led by House Energy and Commerce Committee Chairman W.J. "Billy" Tauzin (R-La.) last week proposed replacing the system for reimbursing physicians and other providers for the select outpatient prescription drugs that Medicare covers.

    The payments are for prescription drugs administered on an outpatient basis related to the use of durable medical equipment, infusion therapy, dialysis, chemotherapy, organ transplants and pain management. Medicare reimburses providers for the cost of those drugs using an industry calculation called the "average wholesale price," which is much higher than the prices providers actually pay.

    As a result, HHS' inspector general's office earlier this year estimated that Medicare overpaid by $1.6 billion in 1999 on 24 of the Medicare-covered drugs, compared with the prices the Department of Veterans Affairs paid for the same drugs. Medicare and beneficiaries paid a total of $3.9 billion on all Medicare-covered outpatient prescription drugs in 1999.

    In a letter to Thomas Scully, administrator of the Centers for Medicare and Medicaid Services, Tauzin, along with Reps. Michael Bilirakis (R-Fla.) and James Greenwood (R-Pa.), said they would draft a legislative proposal soon basing reimbursement for outpatient prescription drugs on a manufacturer-reported "average sale price." That calculation would include rebates and discounts.

    With the potential to pass legislation that could save up to $1.6 billion a year from Medicare payments, provider groups are eager to get their hands on that money to offset what they view as unfair payment policies.

    Groups representing hospitals, doctors and insurers all have found ways to tell Congress to spend roughly $1.6 billion on their members. Hospitals said a change that takes effect next year in the Medicare prospective payment formula for outpatient departments will cost hospitals $1.5 billion in 2002.

    Meanwhile, physicians are backing legislation introduced last week by Sens. James Jeffords (I-Vt.) and John Breaux (D-La.) that would reduce a scheduled cut to Medicare physician payment rates to 0.9% from 5.4%. A Jeffords aide said the bill would increase physician payments by $1.7 billion in 2002.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    Modern Healthcare
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Special Features
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Data Points
      • Modern Healthcare Metrics
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Nominate
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Critical Connections: Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
      • Galas
        • Health Care Hall of Fame Gala
        • Top 25 Women Leaders Gala
        • Best Places to Work Awards Gala
        • Top 25 Minority Leaders Gala (2020)
      • Webinars
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing