Congress hasn’t yet beaten home IV in the budget game

Five-year freeze on the table; competitive bidding folds — for now

As Capitol Hill slowly shows its hand — revealing how infusion will fit into the next budget — all is not entirely lost amid the looming threat of steep budget cuts in home health.

For example, competitive bidding isn’t likely to take effect any time soon. At present, two early proposals from the House of Representatives call for a freeze on reimbursement for parenteral and enteral nutrition at 1995 levels for the next five years.

"The good news is no competitive bidding," says Alan Parver, JD, president of the National Alliance for Infusion Therapy (NAIT), in Washington, DC. "A freeze is certainly better than a lot of actual cuts that could be done, and they’re not cutting beyond the 1995 level. The bad news is that’s a long freeze, no question about it."

However, Parver says that even if such a freeze should take effect, the reimbursement rates for parenteral and enteral nutrition aren’t necessarily etched in stone for the duration.

"There are things that can be done in the course of the freeze, such as new legislation, new studies, or new ways to approach reimbursement, which could perhaps intercede and disrupt the freeze and institute a new system," notes Parver. And that’s what NAIT is lobbying for. "Congress would have to pass something, and we’re hopeful that a freeze is merely a placeholder in the course of fixing how this area is covered and reimbursed."

On the Senate side, early reports from the Finance Committee indicate it is looking to place parenteral and enteral nutrition on a fee schedule. However, the Committee’s proposal would require the Health Care Financing Administration (HCFA) to consult with Congress before doing so. In addition, the Committee wants to require HCFA to consider all components of care in the fee schedule, including service. This is good news for home infusion in light of the original scenario posed to the industry.

"Acquisition cost, which was originally proposed by the Clinton Administration, suggests that there are no costs associated with the work of the provider, and that is clearly not the case, especially in the infusion area where the providers do a lot more than simply hand the patient the drug," says Parver. [See Home Infusion Therapy Management, May 1997, p. 6, for story on original average wholesale price (AWP) proposal.]

Drug reimbursement to change?

Parver notes that the Ways and Means Committee recently reported on a bill that would pay for drugs at AWP minus 5%, with no dispensing fee. Parver says AWP minus 5% is clearly better than acquisition cost reimbursement, however, Chairman Bill Thomas (R-CA) of the Ways and Means Committee left the door open for a more in-depth look at the issue.

"He made it clear that simply looking at this issue by playing with drug reimbursement is not a comprehensive and fair way to do it," says Parver. "I think in the coming months, the committee is going to continue to look at how Medicare pays for outpatient drugs."

The driving force behind any changes in reimbursement will likely be budgetary, as Congress looks to squeeze savings out of any area possible. It will be interesting to see what the Senate’s version of the budget is and the reimbursement levels it proposes for parenteral and enteral nutrition and outpatient drugs.

While the current budget proposals don’t look to institute competitive bidding, Parver notes its implementation still may be down the road. There is a competitive bidding project proposal to take place in two regions of the country on Capitol Hill, but it’s unclear whether it will address home infusion.

"The demonstration project would consist of items selected by the secretary [of Health and Human Services], which may include enteral and parenteral nutrition," he says. "At this point, it’s not clear what that means and how the secretary would select those."