The Government Accountability Office said proposed Medicare reimbursement for specifically covered outpatient drugs and radiopharmaceuticals in 2006 would significantly exceed hospitals' average acquisition cost, and the CMS said it will consider lowering the rates in its final regulations. According to a GAO report, the CMS added 6% to manufacturers' average sales price for drugs specifically covered under the outpatient prospective payment system. But the GAO said 3% or more over the average sales price would exceed hospitals' average acquisition cost. In addition, the CMS based reimbursement for radiopharmaceuticals on hospital charges, instead of acquisition costs. The GAO urged the agency to reconsider its reliance on charges. Read the report.
Separately, the CMS said Medicare will pay home health agencies 2.8% more overall, or $370 million, in 2006 under final regulations. The agency made three changes from proposed regulations in response to providers' concerns, said William Dombi, vice president for law at the National Association of Home Care and Hospice, a trade group. The CMS increased the inflation update to 3.6% instead of the proposed 3.3%; made revisions that will raise outlier payments; and decided to phase in revised Metropolitan Statistical Areas over one year instead adopt the full new definitions immediately, Dombi said. Read the final regulations. -- by Matthew DoBias and Joseph Mantone