Economic Considerations

Lynn Webster M.D.Lifetree Clinical Research and Pain Clinic

Salt Lake City, Utah

Economic Factors

• Site of Service – Hospital Inpatient, Hospital Outpatient, ASC,

Office

• Management Cost– Cost of drugs, refill kits and office overhead

• Management Reimbursement – Drugs– Cognitive skills

Payment by Site of Service: Trial

Code Description Facility Pymt

MD Pymt w/Fix

MD Pymt w/o Fix

62319 Injection, including catheter placement, cont infusion

$485 $92 $71

Total $485 $92 $71

Description DRG Facility Pymt MD Pymt w/Fix

MD Pymt w/o Fix

Medical back problems w/MCC

552 $4487 $92 $71

Total $4487 $92 $71

Inpatient Hospital Trial

Outpatient Hospital Trial

The drug used for the trial is included in the DRG for Inpatient Trials. For outpatient hospital trials, Lioresal and Prialt are reimbursed separately, Infumorph is packaged in the APC payment.

CPT Copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

Changes to the Hospital Outpatient Prospective Payment System and FY 2010 Payment Rates. Federal Register Display Date: October 30, 2009

Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010. Federal Register Display Date: October 30, 2009

Payment by Site of Service: Implant

Code Description Facility Pymt MD Pymt w/Fix

MD Pymt w/o Fix

62350 Catheter Implant*multiple surg reduction is reflected

$1443 $184 $146

62362 Programmable Pump Implant

$13305 $385 $306

Total $14748 $569 $452

Description DRG Facility Pymt MD Pymt w/Fix

MD Pymt w/o Fix

Peripheral/Cranial and Other Nervous System W/CC or Peripheral Neurostimulator

41 $11967 $184$385

$146$306

Total $11967 $569 $452

Inpatient Hospital Implant

Outpatient Hospital Implant

The DRG assignment varies depending on diagnoses and severity of illness (MCC or CC). For illustration above a pain disorder diagnoses was used.

CPT Copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

Changes to the Hospital Outpatient Prospective Payment System and FY 2010 Payment Rates. Federal Register Display Date: October 30, 2009

Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010. Federal Register Display Date: October 30, 2009

Payment by Site of ServiceRefill Programming and Analysis

Code Description Facility Pymt

MD Pymt w/Fix

MD Pymt w/o Fix

62368 Pump Programming and Analysis

$171 $37 $28

95990 Refill – Non-Phys

NA $64 $56

95991 Refill – Physician

$127 $37 $28

J2275 Morphine, 10 mg

N/A

Total $298 $74 $56

Code Description MD Pymt w/Fix

MD Pymt w/o Fix

62368 Pump Programming and Analysis

$54 $43

95990* Refill – Non-Phys $75 $56

95991 Refill – Physician $93 $79

J2275 Morphine, 10 mg $14

Total $161 $136

Physician Office RefillOutpatient Hospital Refill

•Fee not established for 95990 in facilityTotals calcuated using MD RefillFor illustration, Infumorph 50 mg used for calculating payment http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a1_2009aspfiles.asp

Refill kits are used in both sites of services and are included in the payment reflected aboveCPT Copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

Changes to the Hospital Outpatient Prospective Payment System and FY 2010 Payment Rates. Federal Register Display Date: October 30, 2009

Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010. Federal Register Display Date: October 30, 2009

Drug Reimbursement Methods

• AWP• ASP• Fee Schedules• Rebate Programs

Medicare Administrative Contractor (MAC) Drug Reimbursement

• All contractors instructed to utilize ASP pricing for commercially prepared drugs used in infusion pumps

– http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a19_2010aspfiles.asp

• Because of some confusion, a couple MACs still paying at 95% of Average Wholesale Price (AWP)

• Compounded Drugs are Paid at MAC discretion– Payment Varies– Coding/reporting requirements vary

Current ASP* Payment Amounts

Physician Office Reimbursement

= ASP + 6%

Facility Reimbursement

= ASP + 5%

Difference

HCPCs Code

Drug Dosage Cost 10/1/2010 10/1/2010

J0475 Baclofen 10 MG injection

10 MG $203.93 $200.08 $3.85

J0476 Baclofen intrathecal trial

50 MCG $73.15 $71.77 $1.37

J2275 Morphine sulfate injection

10 MG $2.42 $2.37 $0.05

J2278 Ziconotide injection 1 MCG $6.61 $6.48 0.3

*Average Sales Price

Current AWP* Amounts

• Baclofen 10 mg $215.18• Baclofen 50 mcg $ 79.80• Morphine Sulfate 10mg $4.39 approx• Ziconitide only priced at ASP

*Average Wholesale Price

IT Reimbursement• Industrial Claims

– Each state’s Industrial Commission sets the fee schedule

• Some states pay at invoice plus ~15%

• Private Payers– Most use the Medicare ASP + 6% fee schedule

• Noridian Medicare– J3490 code – Pay from invoice with no additional payment allowed

IT Therapy Costs

LOW HIGH

IT Prialt •Average dose 4 mcg/day in 20-mL Medtronic pump•ASP + 6% = $6.51/mcg

IT Morphine•Average dose 6 mcg/day in 20-mL Medtronic pump•ASP + 6% = $2.83/10 mg

$ $ $ $ $ $ $ $ $

Oral Therapy Costs

LOW HIGH

Oxycontin® 80 mg TIDPercocet® 10/325 mg 8x day

Lyrica® 150 mg BIDCymbalta® 60 mg QDKlonopin® 1 mg BID

Ambien® CR 12.5 mg QHS

Methadone® 10 mg QIDOxycodone® 15mg QID

Gabapentin® 400 mg QIDDesipramine® 10mg TIDTrazodone® 50mg QHS

$ $ $ $ $ $ $ $ $

Cost Comparison of 2 Intrathecal Medications to an Oral Brand Name Medication Regimen and an Oral

Generic Medication Regimen

Deer and Smith, et al. Manuscript in Progress

Economic Considerations• IT therapy can be less expensive than using

oral medications• Reimbursement depends on payer and site of

service• Drug invoice pricing may not provide payment

for handling and acquisition

Economic Considerations

• The Neuromodulation Therapy Access Foundation (NTAC) is working with multiple organizations to provide appropriate payment for all aspects of pump therapy– Palmetto GBA recently implemented fee schedule that

replaces invoice only methodology (California, Nevada, Hawaii)

– Allows for fee schedule to cover drug and separate compounding fee

• Thanks to Drs Schwachmann, Helm and William Stuart PharmD