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Delta Connect Blog

Home Infusion Demo Maps A Way Forward For Future Medicare Changes

Posted by Crystal Parks on Aug 19, 2014 12:02:52 PM


A Medicare demonstration project bundling payment for home infusion of intravenous immune globulin (IVIG) maps a potential way forward for future reimbursement changes involving home infusion more broadly, which would benefit larger providers like BioScrip, Walgreen, CVS, Express Scripts, privately-held Diplomat that recently filed an S-1 and privately-held AxelaCare Health.  While the demonstration will have limited impact in the near term, given that insurers tend to piggy back on Medicare even though it comprises less than 15-20% of the industry payer mix for specialty home infusion providers, the policies CMS wants to test could have reverberating effects among all insurers and bring consistency to the current haphazard state of home infusion reimbursement. 

Any benefit from such potential changes would come on top of various positive underlying factors: (1) a growing Medicare population; (2) expansion of insurance coverage; (3) the need for insurers and/or PBMs to have sufficient pharmacy networks that offer specialty and home infusion drugs; (4) an increased emphasis on cost-effective strategies, especially those designed to keep people in the home; and (5) the fact that many infused therapies lack treatment alternatives for chronic conditions like immunodeficiencies, autoimmune disorders, and hematologic disorders.  These factors have led to some consolidation among this fragmented industry over the years [e.g. Walgreen's purchase of Express Script's CuraScript and Omnicare's Option Care; Express Script's merger with Medco and its Accredo unit; CVS's purchase of Coram from privately-held Apria; BioScript's buying spree of CarePoint, HomeChoice Partners, and InfuScience; and Diplomat's purchase of privately-held MedPro Rx.]

Recently, CMS said it is setting up a three-year demonstration project to bundle payment for IVIG supplies and services for home use to Medicare beneficiaries who are not home-bound or receiving home health. Ordered by statute and starting in October, the project is restricted to 4,000 patients with primary immune deficiency disease (PIDD).  Although limited in scope, this project is being watched by CMS, MedPAC, policymakers, and patient groups to monitor access, compliance, and healthcare outcomes to see if this design can apply to home infusion more broadly, considering that more people are entering the system and suffering from chronic illnesses that may be more cost-effectively treated in the home.

The current reimbursement framework for home infusion is convoluted. Most insurers and government programs pay a separate rate for the infused therapy - and potentially a per-diem amount for the supplies, equipment, and pharmacy services - and another amount for nursing.  Medicare heeds this piecemeal approach but often does not reimburse for the supplies and nursing, since such coverage depends on the actual therapy, patient's illness, and circumstances.  Given that insurers use Medicare as a guide, any policy changes to make home infusion more comprehensive would be felt more broadly, including potential disruption to smaller operators lacking the infrastructure to handle the service/patient volume or absorb cost increases. 

Medicare's various forms of home infusion:

  • Home infusion for IVIG is reimbursed under Medicare Part B for patients with PIDD at a statutory rate of 106% average sales price.  Unless the beneficiary is homebound or eligible for home health as part of post-acute care, CMS won't pay for any nursing or supplies to administer IVIG.  Additionally, most Medicare claims for IVIG are for other illnesses and are not reimbursed under this paradigm, often forcing patients to be treated outside the home, at a cost to the government.
  • Home infusion for select anti-infective, chemotherapy, inotropic, and pain management therapies may be paid under Medicare Part B at a different rate, but only for (1) certain indications; (2) homebound beneficiaries; and (3) administration with an external infusion pump - thus triggering Medicare's durable medical equipment benefit.  CMS will not pay for nursing care unless the patient is eligible for home health.
  • Home infusion for other treatments, such as antibiotics or rheumatoid arthritis, off-label indications for the therapies above, or for beneficiaries that are not homebound, Medicare Part D provides the treatment and reimburses the home infusion pharmacy at a negotiated rate, but it does not reimburse for any ancillary supplies or nursing service.

From the NAHC Report Article. The article was written by Beth Mantz Steindecker, Vice President, Health Care Analyst at Washington Analysis, an institutional research firm 


Topics: Home Care reimbursement


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