News Briefs

Medicare payment is too low for inhalation drugs

A study of inhalation drug therapy services provided to Medicare beneficiaries in their homes finds the new 2005 Medicare reimbursement formula paid on average sales price (ASP) would underreimburse the actual cost of providing two key drug therapies by $68.10 per monthly supply.

The American Association for Homecare study includes responses from 109 pharmacies that represent 2,448 branch locations providing inhalation drug therapy services to 337,348 Medicare beneficiaries per month, or 615 of all Medicare inhalation drug therapy patients.

In a notice of proposed rulemaking for the 2005 Medicare physician fee schedule issued last month, the Centers for Medicare & Medicaid Services proposed 89% reimbursement cuts based on the ASP formula for albuterol sulfate and ipratropium bromide. These drugs commonly are prescribed to treat diseases such a chronic obstructive pulmonary disease.

Survey respondents report that because of patient-management, pharmacy, compounding, delivery, and administrative costs, these drug therapies cannot be provided to Medicare patients at the ASP mandated formula without a substantial service or dispensing fee.

Laws hinder adoption of health IT, study says

Legal barriers posed by certain fraud and abuse, antitrust, federal income tax, intellectual property, malpractice, and state licensing laws hinder providers’ adoption of health information technology (IT), the Government Accountability Office (GAO) concluded in a recent report.

"Because the laws frequently do not address health information technology arrangements directly, health care providers are uncertain about what would constitute violations of the laws or create a risk of litigation," the report said. Such "uncertainties and ambiguity in predicting legal consequences" make providers reluctant to invest significantly in IT. The Physician Self-Referral or "Stark" Law and anti-kickback law, for example, make providers wary of establishing arrangements between providers that could promote adoption of health IT, the report continued.

The GAO stated that, while the Department of Health and Human Services, which is charged with fostering broader adoption of health IT, has attempted to address some of those barriers, the agency’s efforts have not been sufficient to overcome providers’ concerns.

The report is available at

Report shows value of telemonitoring

Remote physiological monitoring can help reduce hospital visits, length of stay, and health care costs for heart failure patients while improving patients’ quality of life, according to a study by the New England Healthcare Institute. The study found that using remote monitoring for heart failure patients lowers re-hospitalization rates by 32% and can produce net cost savings of 25% when compared to standard care.

Because the prevalence of heart failure has grown by 500% over the past 30 years, and because the baby boomer generation continues to age, the authors predicted the cost of providing standard care to heart failure patients could become catastrophic over the next decade.

The report also discussed barriers to use of telemonitoring. Lack of Medicare payment to cover the purchase of telemonitoring devices and to cover the time spent by clinicians monitoring and responding to the data are two reasons some providers are slow to adopt telemonitoring. Other barriers include clinician concerns about a lack of outcome data to support telemonitoring’s benefits and a lack of patient awareness of the technology.

To see the full report, Remote Physiological Monitoring: Innovation in the Management of Heart Failure, go to, choose "Research & Publications," on the top navigational bar, then choose "NEHI Publications" on the left navigational bar.