A Simple Fix Will Save Medicare Millions and Protect Vulnerable Patients

The 21st Century Cures Act, passed in the final days of 2016 with broad bipartisan support, represents a rare instance in which both parties came together to advance landmark health care legislation. But while the law is designed to boost medical research and accelerate the approval of new treatments, it will unintentionally force many frail and elderly patients across the country to go to the hospital for medical care they would normally receive at home.  

Infusion therapy — delivering medicines intravenously or by catheter — is used to treat a wide range of medical conditions that cannot be effectively addressed by oral medications. Thousands of patients can receive infused medications in the convenience of their own home, thereby avoiding the cost and burden of going to a hospital or skilled nursing facility for treatment. Home infusion therapy can improve the health and quality of life of elderly heart failure patients who are waiting to receive an implantable device or heart transplant. It helps people with rare immunodeficiency disorders live a more normal life without the constant fear of infection. People with terminal illnesses such as cancer and end-stage heart failure can spend their final days in peace surrounded by loved ones and free of pain. But without some small changes to the Cures Act, these benefits, and the attendant cost savings, may be lost for up to four years.

Home infusion services are delivered by skilled health care professionals who provide the medical equipment and medications patients need, teach them and their caregivers how to properly use them, and monitor their well-being on a continual basis. And while historically the entire health care community recognizes and pays for home infusion therapy, one payer — Medicare — has paid for the medications, but has never covered the skilled care to deliver infusion therapy in the home.

Fortunately, Congress passed Cures to address the problem. But despite the clear benefits of the law in many areas, there was an unintended consequence for the home infusion community. Under the new law, payments for infused drugs were standardized as of 2017 to capture significant costs savings for Medicare, but payments for home infusion services were not enabled until 2021. As a result, many patients who have been doing very well at home are being forced to seek care in a hospital or skilled nursing facility and some may experience readmissions and extended stays in the hospital. In addition to placing an unnecessary burden on thousands of patients, their caregivers and families, this will cost taxpayers tens of millions of dollars per year because infusion therapy in the hospital costs as much as 10 times more than delivering the same care in the home.  

For decades, commercial insurers, Medicare Advantage Plans, the Veterans Administration and TRICARE, which covers the cost of medical care for active military personnel, have covered the cost of home infusion services, recognizing that it offers tremendous cost-saving and health benefits over treatment in the hospital or skilled care setting. In a historic quirk, the only major health care program that did not provide coverage for home infusion services was Medicare. In 2003, Congress modernized the Medicare Part B drug reimbursement system to move from an “Average Wholesale Price” benchmark to an “Average Sales Price” metric. Ironically, because Medicare did not pay for home infusion services, but did pay for infused drugs, home infusion drugs were excluded from the change, and remained reimbursed based upon AWP. As a result, some commonly infused drugs were not adequately reimbursed, and others were over-reimbursed.

Congress, in partnership with the infusion industry, sought to fix the disparities in reimbursement for home infusion therapy in Cures. Section 5004 of the Cures legislation changed the drug reimbursement from AWP to ASP to streamline Medicare payments for infused medications. This change, which quickly took effect on Jan. 1, 2017, will save Medicare an estimated $660 million dollars over the next decade. At the same time, in Section 5012 of Cures, Congress made provisions to allow Medicare to fairly reimburse home infusion services provided to patients. However, given the rushed nature of the process by which the final Cures bill was put together, the new provision in Section 5012 will not take effect until 2021. This leaves a four-year gap during which home infusion providers are not reimbursed for their services.

A proposed fix to Cures, if enacted by Congress, will allow Medicare to implement the home infusion administration benefit fees authorized by Section 5012 on Jan.1, 2018. This will allow Medicare to realize cost savings three years earlier than expected by allowing home infusions to continue — but at a much lower congressionally-set rate than the hospital costs Medicare would otherwise pay for.  

Congress has the authority to ensure patients can be conveniently and effectively treated at home, while saving Medicare millions of dollars. But it needs to act now.


Dan Greenleaf is CEO and president of BioScrip, a home infusion therapy provider. More information can be found here.

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