Specified Covered Outpatient Drug Payments Make GAO Unhappy

Right now the Government Accountability Office is not a medical billing staff member’s best friend. The Centers for Medicare & Medicaid Services are going head to head with the Government Accountability Office in regards to the new medical billing outpatient prospective payment system (OPPS).

The Government Accountability Office claims that the Centers for Medicare & Medicaid Services has overestimated payments for prescription drugs and radio pharmaceuticals. They claim that the amount Medicare will pay for medical billing is more than it will cost hospitals to acquire these drugs.

The Centers for Medicare & Medicaid Services are planning to use a system called SCOD (specified covered outpatient drugs) to calculate the medical billing payments. This method uses the drugs’ average sale prices and then adds 6 percent to that figure. The GAO claims that this figure is much to high for hospital drug medical billing.

There are two reasons the GAO doesn’t like the SCOD payment figuring method. First, they claim that the average sale price is merely a composite measure. It does not contain information to support the certain prices. Without this valuable information, the Centers for Medicare & Medicaid Services cannot get an accurate picture of the hospital costs. Second, the medical billing reimbursement rate for these drugs is the ASP plus 3 percent. According to the GAO, this will exceed the drug cost to the hospital. They have suggested that a more appropriate medical billing reimbursement would be a level less than the ASP plus 3 percent.

At this point nothing has been decided for the prescription medical billing reimbursement rate. The GAO is determined not to pay hospitals any more than their specific acquisition rate. The Centers for Medicare & Medicaid Services are willing to error on the side of abundance. In this case, medical billing will not change, only the reimbursement rate.

View all Articles by: Melissa Clark, CCS-P