Respiratory Funding Update

Nebulizer Medications

• By Elisha Bury
• Sep 01, 2007

For nebulizer medications, this year has been one of refinement. After many changes since the Medicare Modernization Act of 2003, reimbursement for nebulizer medications was further adjusted in the first half of the year.

One such change adjusted the price of alburterol and levalbuterol (or Xopenex) to the same reimbursement.

In June, TriCenturion issued a bulletin that CMS was eliminating the codes for albuterol and levalbuterol — J7611, J7612, J7613 and J7614. The new codes, effective for claims dated on or after July 1, combined the two drugs under Q4093 for concentrated albuterol (per 1 mg) or levalbuterol (per .5 mg) and Q4094 for unit dose albuterol (per 1 mg) or levalubetrol (per .5 mg).

Tom Pontzius, president of Nationwide Respiratory, sees the change — which bumps albuterol from $29 a box to $189 a box — as positive for albuterol. “I think it’s good because a lot of people use albuterol,” he says. “It’s a very viable respiratory med that a lot of people need and should use.”

On the other hand, the change was bad news for levalbuterol.

Tim Gordon, director of marketing for Respiratory Drug Delivery at Respironics, Murrysville, Pa., says that Xopenex does what albuterol does but with a lower risk of side effects. As such, Xopenex is a branded product that costs much more than albuterol.

CMS was “looking at it in terms of, ‘Should we be reimbursing when basically it’s delivering the same benefit as albuterol?’ ” Gordon says. The fear was that CMS would reimburse Xopenex at albuterol’s rate, but something different actually happened.

In fact, CMS grouped albuterol and Xopenex in “one big bucket,” Gordon says, and took a blended average selling price. “The effect is that it actually bumps up the albuterol reimbursement and it significantly brings down the Xopenex reimbursement.”

Pontzius predicts many manufacturers of levalbuterol are either going to stop offering it or drastically reduce the price. Either way, if use of albuterol increases, Pontzius believes CMS will again review reimbursement on that drug.

Perhaps the most shocking change to nebulizer medications this year was CMS’s decision in March to end reimbursement for compounding inhalation solutions. The revised medical policy stated that claims effective July 1 and later would be denied as not medically necessary.

“The compounding is troublesome in itself,” Pontzius says. He says CMS decided not to reimburse it because the manufactured product was available. Pontzius blames “rogue pharmacies that weren’t holding up their end of the bargain” for causing CMS to penalize everybody.

Joe Lewarski, Invacare’s respiratory group vice president, Elyria, Ohio, says that CMS has made it clear that they oppose compounding respiratory drugs because they do not feel it is clinically necessary or supported by published literature. Lewarski acknowledges that while clinicians agree that drug compounding is an important component of pharmacy practice, compounding respiratory drugs has been difficult to support scientifically.

“While I am a proponent of evidenced-based medicine, it is important to keep in mind that there are many areas of medicine with limited supportive research and that a lack of published evidence does not directly correlate to a lack of value or need,” Lewarski says. “These changes force providers to closely evaluate their pharmacy business. Some may choose to stay in and others may elect to exit.”

According to AAHomecare, based on Medicare expenditures from 2003 and 2004, an estimated one million Medicare beneficiaries require home inhalation therapy. About 500,000 beneficiaries currently require either DuoNeb or Xopenex.

The Latest Changes to Nebulizer Medications
In March, the DME Program Safeguard Contractors (DME PSCs) released the following coverage changes in a nebulizer draft LCD:
• Payment for levalbuterol will be based on the allowance for albuterol.
• Payment for DuoNeb will be based on the allowance for separate unit dose vials of albuterol and ipratropium.
• Coverage will be eliminated for the following nebulizer drugs based on inadequate support in the medical literature for administration using a DME nebulizer: amikacin, atropine, beclomethasone, betamethasone, bitolerol, dexamethasone, flunisolide, formoterol, gentamicin, glycopyrrolate, terbutaline and triamcinalone. Coverage will be limited to these drugs: acetylcysteine, albuterol, budesonide, cromolyn, dornase alpha, iloprost, ipratropium, isoetharine, isoproterenol, levalbuterol, metaproterenol, pentamidine and tobramycin.
• Maximum milligrams/month for budesonide were defined.

This article originally appeared in the Respiratory Management Sept/Oct 2007 issue of HME Business.