FOR INFORMATION CONTACT:
Lori Gardner, Senior Director
Communications & Marketing
301.984.9496 ext. 226
For Immediate Release: July 5, 2005
Association of Community Cancer Centers Pleased that GAO Releases its Drug Pricing Report
GAO Generates Additional Issues for CMS to Consider Before Setting Reimbursement Rates for Hospital Outpatient Departments
ROCKVILLE, Md.—The Association of Community Cancer Centers (ACCC) is pleased that the Government Accountability Office (GAO) released its widely anticipated report on June 30, 2005, on Medicare hospital outpatient department drug purchase prices. To prepare its report, GAO studied the purchase price hospitals pay for 53 specified covered outpatient drug categories. The categories represent 86 percent of all Medicare spending on these drugs in the first nine months of 2004.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) directed GAO to conduct hospital acquisition cost studies for certain drugs. The Centers for Medicare and Medicaid Services (CMS) then is required to take these survey data into account when setting reimbursement rates for these drugs in hospital outpatient departments in 2006 and beyond.
In an effort to ensure that hospitals are adequately reimbursed and to preserve Medicare beneficiary access to needed cancer therapies, ACCC worked with the GAO as the agency developed and refined its survey instrument.
"Although there may be some drugs for which Medicare currently is paying more than the average purchase price to the hospital, it is important to understand that these payments also reimburse hospitals for the pharmacy overhead and handling costs associated with the administration of these drugs," said Deborah Walter, ACCC's Senior Director, Policy and Government Affairs.
"As the basis for Medicare reimbursement to hospitals for innovative cancer therapies transitions from an average wholesale price to hospital acquisition cost in 2006, it will be imperative that CMS set an appropriate payment rate that accounts for both the acquisition of drug as well as the pharmacy overhead and handling costs associated with its administration," Walter added.