Home Infusion Therapy
Differences between Medicare and Private Insurers' Coverage
Gao ID: GAO-10-426 June 7, 2010
Infusion therapy--drug treatment generally administered intravenously--was once provided strictly in hospitals. However, clinical developments and emphasis on cost containment have prompted a shift to other settings, including the home. Home infusion requires coordination among providers of drugs, equipment, and skilled nursing care, as needed. GAO was asked to review home infusion coverage policies and practices to help inform Medicare policy. In this report, GAO describes (1) coverage of home infusion therapy components under Medicare fee-for-service (FFS), (2) coverage and payment for home infusion therapy by other health insurers--both commercial plans and Medicare Advantage (MA) plans, which provide a private alternative to Medicare FFS, and (3) the utilization and quality management practices that health insurers use with home infusion therapy benefits. To do this work, GAO reviewed Medicare program statutes, regulations, policies, and benefits data. GAO also interviewed officials of five large private health insurers that offered commercial and MA plans.
The extent of Medicare FFS coverage of home infusion therapy depends on whether the beneficiary is homebound, as well as other factors related to the beneficiary's condition and treatment needs. Some Medicare FFS beneficiaries who are homebound have comprehensive coverage of home infusion therapy, which includes drugs, equipment and supplies, and skilled nursing services when needed. For non-homebound beneficiaries with particular conditions needing certain drugs and equipment, Medicare FFS coverage of home infusion is limited to the necessary drugs, equipment, and supplies, and excludes nursing services. For other non-homebound beneficiaries, Medicare FFS coverage is further limited; infusion drugs may be covered for those enrolled in a prescription drug plan, but neither equipment and supplies nor nursing services are covered. These non-homebound beneficiaries would need to obtain infusion therapy in a hospital, nursing home, or physician's office to have all therapy components covered. The health insurers in GAO's study provide comprehensive coverage of home infusion therapy under all of their commercial plans. Some insurers also provide comprehensive coverage under their network-based MA plans, which may provide benefits beyond those required under Medicare FFS. Nationwide, nearly one out of every five MA beneficiaries has comprehensive coverage through an MA plan that has chosen to cover home infusion therapy as a supplemental benefit. To pay providers of home infusion therapy, most of the insurers in GAO's study use a combination of payment mechanisms. These include a fee schedule for infusion drugs, a fee schedule for nursing services, and a bundled payment per day of therapy for all other services and supplies. Most of the health insurers in GAO's study use standard industry practices to manage utilization of home infusion therapy and ensure quality of care. Specifically, most health insurers require that infusion providers submit patient information in advance to support a request for coverage and receive payment authorization. Also, health insurers may review samples of claims postpayment to determine if claims were billed and paid appropriately. None of the insurers in GAO's study stated that they have had significant problems with improper payments or quality for home infusion therapy services. In addition, health insurers reported taking various steps to ensure the quality of services delivered in the home. These included developing a limited provider network of infusion pharmacies and home health agencies, requiring provider accreditation, coordinating care among providers, and monitoring patient complaints. In commenting on a draft of this report, the Department of Health and Human Services stated Medicare covers infusion therapy at home for beneficiaries receiving the home health benefit, while other beneficiaries have access to infusion therapy in alternate settings. The Department suggested GAO reword its recommendation to clarify that a change to Medicare benefits would require statutory authority, and GAO has done so.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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GAO-10-426, Home Infusion Therapy: Differences between Medicare and Private Insurers' Coverage
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2010:
Home Infusion Therapy:
Differences between Medicare and Private Insurers' Coverage:
GAO-10-426:
GAO Highlights:
Highlights of GAO-10-426, a report to congressional requesters.
Why GAO Did This Study:
Infusion therapy”drug treatment generally administered intravenously”
was once provided strictly in hospitals. However, clinical
developments and emphasis on cost containment have prompted a shift to
other settings, including the home. Home infusion requires
coordination among providers of drugs, equipment, and skilled nursing
care, as needed. GAO was asked to review home infusion coverage
policies and practices to help inform Medicare policy. In this report,
GAO describes (1) coverage of home infusion therapy components under
Medicare fee-for-service (FFS), (2) coverage and payment for home
infusion therapy by other health insurers”both commercial plans and
Medicare Advantage (MA) plans, which provide a private alternative to
Medicare FFS, and (3) the utilization and quality management practices
that health insurers use with home infusion therapy benefits.
To do this work, GAO reviewed Medicare program statutes, regulations,
policies, and benefits data. GAO also interviewed officials of five
large private health insurers that offered commercial and MA plans.
What GAO Found:
The extent of Medicare FFS coverage of home infusion therapy depends
on whether the beneficiary is homebound, as well as other factors
related to the beneficiary‘s condition and treatment needs. Some
Medicare FFS beneficiaries who are homebound have comprehensive
coverage of home infusion therapy, which includes drugs, equipment and
supplies, and skilled nursing services when needed. For non-homebound
beneficiaries with particular conditions needing certain drugs and
equipment, Medicare FFS coverage of home infusion is limited to the
necessary drugs, equipment, and supplies, and excludes nursing
services. For other non-homebound beneficiaries, Medicare FFS coverage
is further limited; infusion drugs may be covered for those enrolled
in a prescription drug plan, but neither equipment and supplies nor
nursing services are covered. These non-homebound beneficiaries would
need to obtain infusion therapy in a hospital, nursing home, or
physician‘s office to have all therapy components covered.
The health insurers in GAO‘s study provide comprehensive coverage of
home infusion therapy under all of their commercial plans. Some
insurers also provide comprehensive coverage under their network-based
MA plans, which may provide benefits beyond those required under
Medicare FFS. Nationwide, nearly one out of every five MA
beneficiaries has comprehensive coverage through an MA plan that has
chosen to cover home infusion therapy as a supplemental benefit. To
pay providers of home infusion therapy, most of the insurers in GAO‘s
study use a combination of payment mechanisms. These include a fee
schedule for infusion drugs, a fee schedule for nursing services, and
a bundled payment per day of therapy for all other services and
supplies.
Most of the health insurers in GAO‘s study use standard industry
practices to manage utilization of home infusion therapy and ensure
quality of care. Specifically, most health insurers require that
infusion providers submit patient information in advance to support a
request for coverage and receive payment authorization. Also, health
insurers may review samples of claims postpayment to determine if
claims were billed and paid appropriately. None of the insurers in
GAO‘s study stated that they have had significant problems with
improper payments or quality for home infusion therapy services. In
addition, health insurers reported taking various steps to ensure the
quality of services delivered in the home. These included developing a
limited provider network of infusion pharmacies and home health
agencies, requiring provider accreditation, coordinating care among
providers, and monitoring patient complaints.
In commenting on a draft of this report, the Department of Health and
Human Services stated Medicare covers infusion therapy at home for
beneficiaries receiving the home health benefit, while other
beneficiaries have access to infusion therapy in alternate settings.
The Department suggested GAO reword its recommendation to clarify that
a change to Medicare benefits would require statutory authority, and
GAO has done so.
What GAO Recommends:
GAO recommends that the Secretary of Health and Human Services conduct
a study of home infusion therapy to inform Congress regarding the
potential program costs, savings, and other issues associated with a
comprehensive Medicare benefit.
View GAO-10-426 or key components. For more information, contact
Kathleen M. King at (202) 512-7114 or kingk@gao.gov.
[End of section]
Contents:
Letter:
Background:
Medicare FFS Covers Home Infusion Therapy for Some Homebound
Beneficiaries; Coverage Is Limited for All Other Beneficiaries:
Many Health Insurers Cover Home Infusion Therapy and Use a Combination
of Payment Methods:
Health Insurers Employ Standard Industry Practices to Manage
Utilization of Home Infusion Therapy and Ensure Quality:
Conclusions:
Recommendation for Executive Action:
Agency and Other External Comments and Our Evaluation:
Appendix I: Comments from the Department of Health and Human Services:
Appendix II: GAO Contact and Staff Acknowledgments:
Figures:
Figure 1: Medicare Fee-for-Service Coverage of Home Infusion
Components for Homebound Beneficiaries:
Figure 2: Medicare Fee-for-Service Coverage of Home Infusion
Components for Non-Homebound Beneficiaries:
Figure 3: Hypothetical Example of Home Infusion Therapy Coverage in a
Commercial Health Plan:
Figure 4: Hypothetical Example of Home Infusion Therapy Payment in a
Commercial Health Plan:
Abbreviations:
ASP: average sales price:
AWP: average wholesale price:
CMS: Centers for Medicare & Medicaid Services:
DME: durable medical equipment:
FFS: fee-for-service:
HHS: Department of Health and Human Services:
MA: Medicare Advantage:
OTA: Office of Technology Assessment:
TPN: total parenteral nutrition:
WAC: wholesale acquisition cost:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 7, 2010:
The Honorable Frank Pallone, Jr.
Chairman:
Subcommittee on Health:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Eliot L. Engel:
House of Representatives:
Infusion therapy--drug treatment generally administered intravenously--
was once provided strictly to patients in hospitals. However, clinical
developments and a greater emphasis on cost containment over the last
30 years have prompted a shift to providing this therapy in alternate
settings, including the home. Home infusion therapy has since become a
large industry with estimated net revenues of up to $11 billion
annually, and between 700 and 1,000 home infusion providers, ranging
from small local companies to large national ones. Industry experts
project the home infusion market will continue to grow steadily, with
one expert predicting growth to about $16 billion by 2012.
Physicians may prescribe infusion therapy when they determine that
oral medications may not be effective. During infusion therapy, drugs
are generally administered into a vein using a device to control the
rate of drug flow. Such devices include gravity drip systems, which
rely on gravity to move the drug into the patient, and electronic
infusion pumps that may be programmed to deliver constant and precise
amounts of the drug. Commonly infused drugs include antibiotics that
may be administered multiple times each day over several weeks to
treat infections and analgesics that may be infused continuously over
months or years to relieve pain. In addition to the specialized
equipment and prescribed drugs, home infusion therapy requires other
components, such as skilled nursing care and supplies. The complex
nature of home infusion therapy also requires coordination of care
among providers of these components.
Currently, Medicare--the federal health insurance program for people
aged 65 and older and certain other individuals[Footnote 1]--does not
have a distinct benefit for home infusion therapy that provides
coverage for all components for all beneficiaries. Efforts to extend
coverage to this treatment setting date back to the 1980s,[Footnote 2]
and recently, some members of Congress have expressed renewed interest
in establishing a home infusion therapy benefit.[Footnote 3] The
proposed benefit would provide coverage of all components of home
infusion therapy for all Medicare beneficiaries enrolled in the
traditional fee-for-service (FFS) program as well as those in the
Medicare Advantage (MA) program[Footnote 4]--in which beneficiaries
enroll in health plans offered by private entities that contract with
the Centers for Medicare & Medicaid Services (CMS).[Footnote 5]
You asked us to review home infusion therapy coverage policies and
practices to inform the development of Medicare policy. Specifically,
you asked us to develop information on Medicare FFS and private health
insurers--both commercial health plans and MA plans, which, in
addition to providing the benefits covered by Medicare FFS,[Footnote
6] may cover more services. In this report, we describe (1) coverage
of home infusion therapy components under Medicare FFS, (2) coverage
and payment for home infusion therapy under other health insurers--
both commercial and MA plans, and (3) the utilization and quality
management practices, if any, that health insurers use with home
infusion therapy benefits.
To describe the extent to which Medicare FFS covers the components of
home infusion therapy, we reviewed federal statutes, regulations, and
policies issued by CMS. We also reviewed national and local coverage
determinations--policies specifying items and services covered by
Medicare. We also talked to CMS officials responsible for various
Medicare program components.
To determine coverage and payment for home infusion therapy under
other health insurers, we interviewed officials from a selective
sample of health insurers. We contacted officials of MA plans and
commercial plans sponsored by six of the largest MA organizations and
one additional commercial health plan. Five of the six MA
organizations responded within our chosen time frame and were included
in our study. This selective sample of MA organizations enrolled about
45 percent of all MA beneficiaries as of June 2009. The information we
obtained is not generalizable to all health insurers. In addition, we
examined the plan benefit packages that MA organizations submitted to
CMS for contract years 2009 and 2010. To obtain an industry
perspective, we interviewed representatives of the National Home
Infusion Association and Infectious Diseases Society of America as
well as one home infusion provider.
To identify utilization and quality management practices that health
insurers may use with home infusion therapy benefits, we discussed
these issues with officials of our sample plans. In addition, we
interviewed an official from a large utilization management
organization who has expertise regarding the home infusion industry.
We also interviewed officials and reviewed materials from
organizations that accredit home infusion providers--the Accreditation
Commission for Health Care, the Community Health Accreditation
Program, and the Joint Commission--regarding potential quality and
safety concerns related to these providers.
We conducted this performance audit from February 2009 through May
2010 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
Patients receive infusion therapy for a variety of conditions, and
physicians may determine that the home is an appropriate venue for
treatment based on a particular patient's condition and circumstances.
Medicare covers and pays for a range of health care services,
equipment, and drugs, and uses various payment systems. Over the last
three decades, Congress has taken steps to address coverage of home
infusion therapy.
Home Infusion Therapy Patients and Providers:
Patients may receive home infusion therapy for acute conditions, such
as infections unresponsive to oral antibiotics[Footnote 7] or pain
management (cancer-related or postsurgical), or for chronic conditions
such as multiple sclerosis or rheumatoid arthritis. Prior to
initiating infusion therapy in the home, physicians and home infusion
providers first assess the appropriateness of home treatment for the
needed drug therapy and for the patient's condition. They then
determine whether the patient is able to understand and carry out
therapy procedures, and if the patient has family or other caregivers
available to provide assistance. For certain therapies, such as
antibiotic therapy, the patient or a family member may be taught to
administer the drug. In these cases, a nurse would generally visit
once or twice at the beginning of treatment, and then once per week
throughout the course of treatment. Other therapies may require more
frequent nursing care. The home setting is not appropriate for all
patients receiving infusion therapy, for all conditions, or for all
drugs.
Many patients receive home infusion therapy following a hospital stay.
The home infusion provider may provide any necessary skilled nursing
services directly or may contract with a home health agency to do so.
Some patients receive home infusion therapy for chronic conditions
that may not require hospitalization; in these cases, a patient's
physician may order the therapy to be delivered by a home infusion
provider after diagnosis. Outside of the home, patients may also
receive infusion therapy in an independent infusion center, a
physician's office, or a hospital-based infusion clinic.
Medicare Payment Systems and Methods:
Since it was established in 1965, the structure of Medicare and the
benefits covered by the program have evolved. Currently, Medicare
consists of four parts, A through D:
* Medicare Part A: Covers inpatient hospital stays, as well as skilled
nursing facility care, hospice care, and home health care.[Footnote 8]
To be eligible for covered home health services--which include skilled
nursing care, physical therapy, and occupational therapy--a
beneficiary must be homebound and have a home health plan of care
approved by his or her physician.[Footnote 9] In 2008, approximately
3.2 million, or about 7 percent of all Medicare beneficiaries,
received home health services. Medicare pays home health agencies that
provide these services using a prospective payment system under which
they receive a predetermined rate for each 60-day episode of home
health care. The payment amounts are generally based on patient
condition and service use.
* Medicare Part B: Provides optional coverage for hospital outpatient,
physician, and other services, such as laboratory services. It also
covers durable medical equipment (DME) and supplies,[Footnote 10]
including infusion pumps and other equipment needed for infusion
therapy.[Footnote 11] Medicare pays for many Part B services and
supplies using fee schedules, and beneficiaries enrolled in Part B are
generally responsible for paying monthly premiums as well as
coinsurance for services they receive.[Footnote 12] Certain specified
outpatient prescription drugs also are covered under Part B, including
drugs needed for the effective use of DME. Part B drugs are generally
paid based on a fee schedule; infusion drugs covered under the DME
benefit are paid based on a different fee schedule than other Part B
drugs.
* Medicare Part C: Since the 1970s, most Medicare beneficiaries have
had the option to receive their Medicare benefits through private
health insurance plans--now known as MA plans--under Medicare Part C.
In 2008, nearly one out of every four Medicare beneficiaries was
enrolled in an MA plan. MA organizations enter into contracts with CMS
that require plans to cover Medicare Part A and B services.[Footnote
13] These organizations have flexibility in designing their plan
benefit packages and may offer additional benefits. Medicare pays MA
plans a fixed amount per beneficiary per month--based in part on the
projected expenditures for providing Medicare-covered services--and
adjusts payments to account for beneficiary health status.
* Medicare Part D: First offered in 2006, Medicare Part D provides
optional coverage of outpatient drugs, including infusion drugs, to
beneficiaries who enroll in prescription drug plans offered by private
entities.[Footnote 14] Medicare beneficiaries may receive Part D drug
coverage through stand-alone prescription drug plans or through MA
plans that include drug coverage. Each Part D plan maintains a list of
drugs it will cover--a formulary--that must meet certain criteria,
[Footnote 15] and may organize those drugs into pricing groups or
tiers.[Footnote 16] Part D plans contract with pharmacies to create a
network of participating providers. Medicare makes subsidy payments to
Part D plans, and most beneficiaries pay applicable premiums and cost
sharing. Plans negotiate drug prices with drug manufacturers and
pharmacies. As such, payment for a drug covered under Part D could be
different than payment for the same drug were it covered under Part B.
In general, Part D does not cover drugs for which payment is available
under Parts A or B.[Footnote 17]
Both home-based services and outpatient infusion therapy have been
areas of concern for Medicare program integrity.[Footnote 18]
Recently, the Department of Health and Human Services (HHS) and the
Department of Justice have renewed attempts to reduce inappropriate
utilization and fraudulent activities in these areas.[Footnote 19]
According to an HHS official, CMS has completed demonstrations that
involve strengthening the initial provider and supplier enrollment
processes to prevent unscrupulous DME and home health care providers
from entering the program. The demonstrations also incorporated
criminal background checks of providers, owners, and managing
employees into the provider enrollment process. In addition, CMS has
found instances of infusion clinics and office-based practitioners
billing Medicare for infusion services that were not medically
necessary or were not actually provided.
Congressional Action and Regulatory History:
Despite the lack of a distinct benefit for home infusion therapy,
Medicare policies have played a significant role in the development of
the home infusion industry. Specifically, Medicare's coverage of
certain therapies--enteral and total parenteral nutrition (TPN)
[Footnote 20]--in the home beginning in the late 1970s, and the
subsequent implementation of prospective payment for Medicare
inpatient hospital services in 1983, contributed to the rapid growth
of the home infusion industry during the 1980s.[Footnote 21]
Over the last three decades, Congress has taken steps to address
expanding Medicare coverage of home infusion therapy. The Medicare
Catastrophic Coverage Act of 1988 created a home infusion therapy
benefit for all Medicare beneficiaries.[Footnote 22] The benefit would
have provided comprehensive coverage of all the components of home
infusion therapy, including intravenous drugs, equipment and supplies,
and skilled nursing services when needed. The act called for a per
diem fee schedule to pay for the supplies and services used in home
infusion therapy and set forth qualifications for infusion providers.
Before the provision became effective, however, it was repealed.
[Footnote 23]
At the request of the Senate Committee on Finance, the Office of
Technology Assessment (OTA) conducted an extensive study of home
infusion therapy, released in 1992.[Footnote 24] The study examined
trends in the industry, the safety and efficacy of the technology, and
the implications for Medicare coverage, including various coverage and
payment options available at the time. OTA found that additional
Medicare coverage of home infusion therapy might lead to lower
payments to hospitals in some cases because of shorter stays and lower
costs. Yet, OTA concluded that Medicare coverage of home infusion
therapy could increase overall Medicare spending.
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 expanded coverage of home infusion therapy significantly, in that
home infusion therapy drugs were covered for beneficiaries enrolled in
Part D plans beginning in 2006.[Footnote 25] Subsequently, CMS
released guidance for Part D plan sponsors on their responsibilities
in covering home infusion therapy drugs, which may be more complicated
to dispense than oral medications. One element of the guidance stated
that Part D plan sponsors should ensure that home infusion drugs are
dispensed by network pharmacies in a usable form that can be readily
administered in beneficiaries' homes.
In January 2009, members of the House and Senate introduced bills that
would create a home infusion therapy benefit that provides
comprehensive coverage for all Medicare beneficiaries.[Footnote 26]
The proposed legislation called for coverage of infusion-related
services, supplies, and equipment under Medicare Part B. The
legislation also called for supplies and equipment to be paid through
a set fee per day of service, while nursing services would be paid
separately based on a fee schedule. Coverage of the drugs used in home
infusions would be consolidated under Medicare Part D. Supporters of
the legislation have asserted that providing comprehensive coverage of
infusion therapy in the home would generate cost savings for the
Medicare program, and that beneficiaries who would prefer having
treatments at home could not afford it without Medicare coverage.
However, concerns have been raised that additional coverage could add
to the Medicare program's growth in spending.
Medicare FFS Covers Home Infusion Therapy for Some Homebound
Beneficiaries; Coverage Is Limited for All Other Beneficiaries:
Medicare FFS covers components of home infusion therapy in some
circumstances. The extent of coverage depends on whether the
beneficiary is homebound, as well as factors related to the
beneficiary's condition and treatment needs. For some homebound
beneficiaries, Medicare FFS covers all the components of home infusion
therapy, while other homebound beneficiaries have limited coverage.
Non-homebound beneficiaries who have certain conditions and who
require certain drugs and equipment are covered by Medicare FFS for
some components of home infusion therapy. Other non-homebound
beneficiaries have little or no coverage for home infusion therapy
under Medicare FFS.
Some Homebound Beneficiaries Have Comprehensive Coverage of Home
Infusion Therapy, and Others Have Limited Coverage:
Some Medicare FFS beneficiaries who are homebound--that is, generally
confined to their homes and in need of nursing care on an intermittent
basis--have coverage for all components of home infusion therapy. (See
figure 1.) Because these beneficiaries qualify for Medicare's home
health benefit, the skilled nursing services--such as training,
medication administration, and assessment of the patient's condition--
as well as certain equipment and supplies used at home are covered.
These services, equipment, and supplies are provided by or arranged
for by a home health agency according to a physician's plan of care.
[Footnote 27] Any care coordination or clinical monitoring services
needed with home infusion therapy would be provided by the home health
nurse assisting the beneficiary at home or by the physician who
ordered the therapy. The equipment and supplies covered for homebound
beneficiaries include certain infusion pumps covered as DME and
supplies such as intravenous and catheter supplies. Homebound
beneficiaries who require other equipment, such as disposable infusion
pumps, would not have coverage for those items, and therefore have
limited coverage.
Figure 1: Medicare Fee-for-Service Coverage of Home Infusion
Components for Homebound Beneficiaries:
[Refer to PDF for image: illustration]
Homebound:
Physician orders infusion therapy for homebound beneficiary.
Nursing services are covered under the home health benefit.[A]
Does beneficiary require only intravenous or catheter supplies?
Yes:
Supplies covered under the home health benefit;
Does beneficiary have Part D drug coverage?
Yes:
Comprehensive coverage: Formulary drugs are covered.
No:
Limited coverage: Drugs are not covered. Beneficiary may have other
drug coverage,[B] or may need to pay for drug component out of pocket.
Does beneficiary require only intravenous or catheter supplies?
No:
Does beneficiary meet criteria for equipment and drug coverage under
DME benefit?
Yes:
Comprehensive coverage: Drugs and equipment are covered.
No: Equipment and supplies not covered.
Does beneficiary have Part D drug coverage?
Yes:
Limited coverage: Formulary drugs are covered. Beneficiary may have
other coverage for equipment/supplies,[B] or may need to pay for these
out of pocket.
No:
Limited coverage: Drugs and equipment/supplies are not covered.
Beneficiary may have other coverage,[B,C] or may need to pay for these
out of pocket.
Source: GAO analysis of federal statutes, federal regulations, and CMS
guidance.
Note: Medicare designates a beneficiary as homebound if he/she is able
to leave home only with great difficulty and for absences that are
infrequent and of short duration or for the purpose of seeking medical
care.
[A] If a beneficiary meets all of the criteria for coverage of home
health services and the home health agency is providing care under
Part A, any DME provided to that patient and billed by the home health
agency must also be provided under Part A. In situations in which the
patient meets the criteria for coverage of home health services and
the home health agency is providing the home health care under Part B
because the patient is not eligible for Part A, the DME provided by
the home health agency may be furnished under Part B.
[B] Beneficiaries may receive additional drug coverage from other
sources, such as an employer or retiree plan.
[C] Beneficiaries may receive additional coverage for equipment and
supplies from other sources, such as a state Medicaid program.
[End of figure]
Although coverage of drugs is specifically excluded under the home
health benefit, coverage for infusion drugs may be obtained through
other parts of the Medicare FFS program. For beneficiaries with
certain conditions, certain drugs are considered supplies for needed
equipment and are therefore covered under the DME benefit. In
addition, infusion drugs may be covered for beneficiaries who are
enrolled in Part D plans or have other prescription drug coverage. In
2008, approximately 90 percent of all Medicare beneficiaries had
prescription drug coverage through Part D plans, retiree plans, or
other sources. CMS requires Part D plans to ensure appropriate
beneficiary access to commonly infused drugs or drug classes by
including them in their formularies and making sure that multiple
strengths and dosage forms are available for each covered drug.
Non-Homebound Beneficiaries with Certain Conditions Have Limited
Coverage of Home Infusion Therapy, but Others Have Little or No
Coverage:
For non-homebound beneficiaries with certain conditions, Medicare Part
B provides limited coverage of home infusion therapy. Specifically,
the DME benefit covers certain equipment and associated drugs for
beneficiaries with specified conditions, but does not cover other
equipment and drugs or any skilled nursing services.[Footnote 28] (See
figure 2.) In 2008, about 50,000 Medicare FFS beneficiaries received
home infusion therapy under this benefit, according to CMS analysis of
claims data for covered infusion pumps.[Footnote 29] In addition,
Medicare Part B expressly provides coverage for other home infusion
drugs, such as intravenous immune globulin.
Figure 2: Medicare Fee-for-Service Coverage of Home Infusion
Components for Non-Homebound Beneficiaries:
[Refer to PDF for image: illustration]
Non-homebound:
Physician orders infusion therapy for non-homebound beneficiary.
(Because beneficiary is not homebound, skilled nursing services in the
home are not required)
Does beneficiary meet criteria for coverage under DME benefit?
Yes:
Limited coverage:
Drugs and pump are covered. Beneficiary pays for nursing costs out of
pocket, as needed.[A]
No:
Does beneficiary have Part D drug coverage?
Yes:
Limited coverage:
Formulary drugs are covered.[B] Beneficiary pays for nursing costs out
of pocket, as needed.[A]
No:
No coverage: Drugs not covered. Beneficiary may have other drug
coverage,[A] or may pay for treatment out of pocket.
Source: GAO analysis of federal statutes, federal regulations, and CMS
guidance.
[A] Beneficiaries may receive additional coverage for nursing services
and drugs from other sources, such as an employer or retiree plan.
[B] Part D plans must require contracted network pharmacies that
deliver home infusion drugs to ensure that the other components of
therapy are in place before dispensing home infusion drugs.
[End of figure]
Under the DME benefit, Medicare covers certain infusion pumps, as well
as the infusion drugs that are considered supplies needed for the
effective use of the infusion pump, for treatment of particular
conditions as specified in national and local coverage
policies.[Footnote 30] Medicare's national coverage policy related to
home infusion details several conditions for which pumps and certain
drugs would be covered. The local coverage policies for home infusion
outline additional circumstances in which pumps and drugs may be
covered, and are required by CMS to be identical. One policy we
reviewed listed about 30 specific drugs covered for certain conditions
when treated using an external infusion pump. Examples of the limited
circumstances in which infusion pumps and related drugs would be
covered under the DME benefit include:
* morphine administered by external infusion pump for beneficiaries
with intractable pain caused by cancer,
* deferoxamine administered by external infusion pump for the
treatment of acute iron poisoning and iron overload, and:
* TPN administered by infusion pump for patients with a permanent,
severe disease or disorder of the gastrointestinal tract.
At the same time, national and local coverage policies explicitly
exclude certain types of infusion pumps or drugs for certain
conditions. For example, Medicare does not cover an implantable
infusion pump for the treatment of diabetes because, according to CMS,
data do not demonstrate that the pump would provide effective
administration of insulin. Medicare coverage also excludes external
infusion pumps used to administer vancomycin, a commonly infused
antibiotic. According to CMS, this method of treatment is specifically
excluded from coverage because of insufficient evidence that an
external infusion pump--rather than a disposable pump or the gravity
drip method--is needed to safely administer vancomycin. In addition,
drugs administered through other methods, such as intravenous gravity
drip, are not covered under the DME benefit.
Non-homebound beneficiaries needing therapies not covered under
Medicare Part B may have coverage of infusion drugs under Part D, but
they lack coverage for the other components of home infusion therapy--
skilled nursing services, equipment, and supplies. (See fig. 2.)
Therefore, these non-homebound beneficiaries would need to seek
treatment in another setting--such as a hospital, nursing home, or
physician's office--to have all of the components of infusion therapy
covered.
Under Part D, drug plans must ensure that certain requirements are met
before drugs, including infusion drugs for administration at home, may
be dispensed.[Footnote 31] Specifically, Part D plans must require
that their contracted network pharmacies ensure that the other
components of therapy are in place before dispensing home infusion
drugs.[Footnote 32] Pharmacies may, in turn, seek assurances that
another entity, such as a home health agency, can arrange for other
needed services.
Many Health Insurers Cover Home Infusion Therapy and Use a Combination
of Payment Methods:
The health insurers in our study told us that they provide
comprehensive coverage of home infusion therapy under all of their
commercial health plans and some MA plans. Most of these insurers use
a combination of payment mechanisms that include a fee schedule for
infusion drugs, a fee schedule for nursing services, and a bundled
payment per day for therapy for all other services and supplies
provided.
Commercial Health Plans and Some MA Plans Provide Comprehensive
Coverage of Home Infusion Therapy:
The health insurers in our study told us that they provide
comprehensive coverage of home infusion therapy under all of their
commercial health plans and some MA plans. Most of them reported that
they have covered infusion therapy at home for more than 10 years--one
for more than 25 years--and that few or no members experienced
problems with access to home infusion services. Spokespeople for these
insurers generally anticipated more opportunities for home infusion
therapy in the future, as more infusion drugs are developed and
technology evolves to infuse them safely in the home.
All of the health insurers told us that home infusion therapy coverage
was comprehensive and available to all members under their commercial
health plans. (See figure 3 for a hypothetical example of how home
infusion therapy might be covered under a commercial health plan.)
They also told us that their commercial coverage policies have few or
no limitations or exclusions on home infusion therapy, although
coverage may be denied when the drug's label specifies another setting
as the appropriate venue, such as a hospital or physician's office.
Figure 3: Hypothetical Example of Home Infusion Therapy Coverage in a
Commercial Health Plan:
[Refer to PDF for image: illustration]
Patient:
Mrs. Smith is a 50-year-old member of a commercial health plan, who
lives with her husband, Mr. Smith. She was diagnosed with an infected
foot ulcer related to her diabetes and admitted to the hospital for
treatment on Dec. 1.
Dec. 1”Dec. 3: Hospital inpatient treatment:
* In the hospital, Mrs. Smith receives an antibiotic”vancomycin, 1
gram, twice a day”through an intravenous catheter. After observation,
her physician determines that she can be treated effectively at home.
* Mrs. Smith's physician contacts her health plan and an in-network
home infusion provider. The home infusion provider and physician
determine that Mr. Smith can administer the antibiotics to his wife at
home.
Dec. 3: Immediate post-discharge:
* Mrs. Smith is discharged with doctor's orders to continue her
antibiotic infusion therapy at home for 4 weeks. Mr. Smith will
administer a dose of the vancomycin twice daily at 7 a.m. and 7 p.m.
* The pharmacy of her infusion provider prepares and delivers to her
home a week's worth of her medication.
* A home infusion nurse visits the home the day of the discharge to
show the Smiths how to administer the antibiotics.
Dec. 4”Dec. 31: Home infusion therapy:
* Once each subsequent week: - A nurse visits to conduct a blood draw
to check various measures, including blood count and level of
antibiotics.
- A nurse also attends to the catheter and dressings and assesses Mrs.
Smith's status.
- The home infusion provider contacts Mrs. Smith's physician to adjust
her dosage as needed.
- The pharmacy delivers another batch of vancomycin to the Smith home.
Source: GAO.
Note: This hypothetical example of home infusion therapy does not
address problems patients may have during the course of treatment,
such as changes in medication or infections.
[End of figure]
Some insurers mentioned that chemotherapy infusions are rarely
administered in the home. One insurer stated that infusion drugs for
home use must have a low likelihood of adverse reaction, and that few
chemotherapy drugs meet that criterion. Even when the home is a safe
setting for such therapy, there may be other reasons to infuse
chemotherapy drugs in another setting. For example, another insurer
pointed out that cancer treatments might require blood tests prior to
the infusion, and fewer supplies would be used if the patient had both
the blood testing and the infusion in a physician's office.[Footnote
33]
Of the five health insurers that had MA plans, two said they provide
comprehensive coverage of home infusion therapy for MA beneficiaries
in the same manner as for their commercial plan members.[Footnote 34]
The remaining three insurers told us that their MA plans' policies
generally follow Medicare FFS coverage. However, two of these insurers
noted that their MA plans may extend coverage to non-homebound
beneficiaries on a case-by-case basis. They said that while such MA
beneficiaries may be able to leave their homes with little difficulty,
it may not be practical for them to go to an outpatient department or
infusion clinic three times a day to receive infusion therapy. In
those cases, the MA plan might cover infusion therapy administered at
beneficiaries' homes.
Nationwide, nearly one out of every five MA beneficiaries has
comprehensive coverage of home infusion therapy through a bundle that
includes drugs and associated supplies and services. CMS allows MA
plans to cover infusion drugs as a Part C mandatory supplemental
benefit--a benefit not covered by Medicare FFS, but available to every
beneficiary in the plan--to better coordinate benefits for home
infusion therapy under Parts C and D.[Footnote 35] According to CMS,
allowing MA plans to cover infusion drugs in this way would also
facilitate access to home infusion therapy--including drugs as well as
the other needed components--and obviate the need for more costly
hospital stays and outpatient services. CMS data show that
programwide, roughly 5 percent of MA plans chose to cover infusion
drugs as a supplemental benefit: 258 plans representing almost 20
percent of MA beneficiaries in 2009 and 224 plans representing more
than 18 percent of MA beneficiaries in 2010. Of the insurers we
interviewed, one offers comprehensive coverage in this manner.
Health insurer officials we talked to asserted that infusion therapy
at home generally costs less than treatment in other settings.
Hospital inpatient care was recognized as the most costly setting. One
insurer estimated that infusion therapy in a hospital could cost up to
three times as much as the same therapy provided in the home. Another
insurer reported that its infusion therapy benefit is structured to
encourage beneficiaries to receive services at home rather than in a
hospital inpatient or outpatient setting whenever possible. For
example, members of that insurer's health plans have no out-of-pocket
costs for home infusion therapy.
However, the relative costs of infusion therapy in physicians' offices
and infusion clinics compared to the home were less clear. For
example, some health insurers stated that the cost of infusion therapy
provided in an infusion center may be similar to the cost of treatment
at home because nurses at infusion centers can monitor more than one
patient at a time. At the same time, other insurers stated that
infusion centers incur facility costs, such as rent and building
maintenance, which could account for higher costs compared with home
infusion.
The home may not be the most cost-effective setting for infusion
therapy in all cases, given the variability of patient conditions and
treatment needs. An insurer noted, for example, that if a patient
needs a onetime infusion rather than a longer term treatment, a
physician's office may be the least costly setting. Similarly, another
insurer stated that it may not be cost-effective or practical for a
patient to be treated at home if that patient requires more than two
nursing visits a day--in such a case, treatment in an inpatient
setting or nursing home might be more appropriate.
Most Health Insurers Use a Combination of Payment Methods for the
Components of Home Infusion Therapy:
Most of the health insurers we spoke with use a combination of methods
to pay providers for the different components of home infusion. (See
figure 4 for an example of how a commercial health plan might pay for
a typical home infusion case, as introduced in figure 3.) For infusion
drugs, they commonly use a fee schedule, which they update
periodically--as frequently as quarterly. Depending on the particular
plan and negotiations with individual infusion providers, insurers
told us they develop payment amounts for drugs based on one or more of
the following:
* Average wholesale prices (AWP) are list prices developed by
manufacturers and reported to organizations that publish them in drug
price compendia. There are no requirements or conventions that AWP
reflect the price of an actual sale of drugs by a manufacturer.
* Average sales prices (ASP) are averages, calculated quarterly from
price and volume data reported by drug manufacturers, of sales to all
U.S. purchasers, net of rebates and other price concessions. Certain
prices are excluded, including prices paid to federal purchasers and
prices for drugs furnished under Part D. Under Medicare FFS, infusion
drugs administered using a covered DME item are generally paid at 95
percent of the October 1, 2003 AWP.[Footnote 36]
* Wholesale acquisition costs (WAC) are manufacturer list prices to
wholesalers or direct purchasers, not including discounts or rebates.
Figure 4: Hypothetical Example of Home Infusion Therapy Payment in a
Commercial Health Plan:
[Refer to PDF for image: illustration]
Payment:
Mrs. Smith‘s commercial health plan pays weekly claims that list the
amount and type of drugs purchased, and the number of nursing visits
furnished by the home infusion provider. Based on the type of therapy
Mrs. Smith received, the plan makes a per diem payment for other
components of her care (e.g., equipment and supplies, care
coordination, and pharmacy services).
The health plan pays the home infusion provider the following amounts
each week:
$100 for the vancomycin and infusion-associated drugs such as heparin;
$85 for each nursing visit, not to exceed 2 hours;
$490 ($70 per diem for other components x 7 days of treatment);
Total is $675per week.
The health plan would pay the following amount for four weeks of
treatment:
$675 per week x 4 weeks = total of $2,700.
Source: GAO.
[End of figure]
The health insurers in our study reported using these pricing data in
different ways. For one insurer, plans in some states base payments on
ASP while plans in other states base payments on AWP. Another insurer
reported that its MA plans pay for Part D drugs using AWP or WAC, and
pay for Part B drugs using either AWP for in-network providers or ASP
plus 6 percent for out-of-network providers.
Most of the health insurers we spoke with also use a fee schedule to
pay for nursing services.[Footnote 37] The nursing fee schedule
generally contains one rate for the first 2 hours of care and another
rate for each subsequent hour. According to industry officials,
insurers may also provide extra payment for nurses traveling to remote
areas or areas considered dangerous enough to require an escort.
Nursing services generally are not required for every dose of an
infused drug, and the need for such services may depend on the
condition of the patient. To explore this, we asked our selected
health insurers to estimate nursing costs for different hypothetical
cases.
* For a typical 4-week antibiotic infusion therapy course, insurers
estimated the cost of nursing services would range from $270 to $384.
* For TPN administered over 12 hours, once a day over 4 weeks,
insurers' estimates of the cost of nursing services ranged from $180
to $384.
Most of the health insurers in our study pay for the other components
associated with home infusion therapy using a bundled payment per day
of therapy--known as a "per diem."[Footnote 38] This daily rate may
cover services, such as pharmacy services, equipment and supplies, and
care coordination. The per diem payment amount is based on the type of
therapy provided and varies depending on the complexity and frequency
of the treatment. For example, the per diem payment for a simple
infusion administered once a day might be $75, whereas the per diem
for a daily complex infusion with multiple drugs might be $225.
Two of the health insurers we spoke with noted that the industry is
trending toward greater use of bundled payments, with more services
and supplies incorporated into a single rate. For one common home
infusion therapy--TPN--the per diem also includes the standard drug
costs. Asked about the costs of a typical monthlong course of TPN,
insurers estimated total costs ranging from about $3,400 to $5,500,
and noted that the per diem payments accounted for more than 90
percent of these costs.
Some health insurers we interviewed stated that the infusion drug is
generally the most expensive component of home infusion therapy, while
others reported most home infusion drugs were among the least
expensive, such as generics. Some insurers reported that many of the
infusion drugs they cover are specialty drugs that cost more than $600
a month.[Footnote 39] Other drugs would cost less. For example, for a
typical case of a month of antibiotic infusion therapy, a health plan
could pay a home infusion provider $300 for the drugs, $350 for
nursing services, and $2,000 for the per diem. One insurer told us
that the pace of development in specialty infusion drugs is
accelerating, which could add to home infusion therapy costs.
Health Insurers Employ Standard Industry Practices to Manage
Utilization of Home Infusion Therapy and Ensure Quality:
Most of the health insurers in our study--both commercial and MA
plans--use standard industry practices to manage utilization of home
infusion and ensure quality of services for their members. None of the
insurers reported significant problems with improper payments for home
infusion therapy services.[Footnote 40] While none of the insurers
identified significant quality of care problems related to home
infusion therapy, they all employ certain practices to help ensure
care delivered meets quality standards.
Health Insurers Use Prior Authorization and Postpayment Claims Review
to Manage Utilization of the Home Infusion Therapy Benefit:
Most health insurers we interviewed use two standard industry
practices--prior authorization, postpayment claims review, or both--to
manage utilization of home infusion therapy for their members.
[Footnote 41] To obtain prior authorization, providers must request
and receive approval from the health plan before the therapy is
covered.[Footnote 42] The plan typically requires providers to submit
patient information in advance to support a request for coverage and
receive payment authorization. With postpayment review, once a claim
has been processed, the plan determines if it was billed and paid
appropriately, and if not, the plan may seek a refund or adjust future
payments.[Footnote 43] Generally, a health plan auditor would review a
sample of claims to see if the patients had medical conditions for
which the proposed treatment was required. None of the insurers
reported significant problems with improper payments for home infusion
therapy.[Footnote 44]
Most of the insurers we interviewed use prior authorization to curb
inappropriate use of home infusion therapy.[Footnote 45] Some insurers
stated that prior authorization is particularly effective in managing
the use of more costly infusion drugs. Some insurers stated that their
plans limit their prior authorization requirement to certain home
infusion therapies and drugs.[Footnote 46] For example, certain
hemophilia drugs may require prior authorization because they are
expensive and patient needs vary substantially. Additionally, insurers
may require prior authorization for immune globulin, checking that
patients' medical conditions indicate use of the drug. In contrast,
one home infusion expert told us that prior authorization has little
utility for this type of therapy because home infusion providers would
incur too much liability risk if they treated patients who were not
appropriate for that setting.
The denial rates for prior authorization requests are reportedly low.
A common reason given for denial of a prior authorization request was
that the therapy did not meet medical necessity requirements.[Footnote
47] Specifically, the requested coverage may be for a treatment of
longer than the recommended duration or for a type of narcotic that
may not be safe for administration in the home. Another common reason
cited for prior authorization denials was insufficient documentation
from the prescribing physician. Insurers also cited denials for drugs
prescribed for off-label use--that is, for conditions or patient
populations for which the drug has not been approved, or for use in a
manner that is inconsistent with information in the drug labeling
approved by the Food and Drug Administration. An insurance official
stated that some conditions that are difficult to treat or diagnose do
not have a universally accepted treatment approach. For example, two
insurers cited denials for requests to treat Lyme disease with long
antibiotic courses that were not supported by medical evidence.
Most health insurers we interviewed use postpayment claims review,
some in addition to prior authorization, to manage the use of home
infusion therapy. One insurer considered postpayment review the
practice most effective in deterring inappropriate use of home
infusion therapy. Such reviews may have a sentinel effect, meaning
that providers who have erroneous claims returned may be less likely
to submit such claims in the future. That insurer and an industry
expert also noted the importance of developing very specific
reimbursement guidelines for providers. An industry expert recommended
guidelines at the dosage and package level, noting that a single
infusion drug may be used for many different diagnoses, with a
different dosage regimen for each diagnosis, and different package
sizes from different manufacturers. For example, to reduce wasteful
spending, reimbursement guidelines could include the specific package
sizes that are covered for products that cannot be reused after they
are opened.
Health Insurers Use Provider Networks, Accreditation, and Complaint
Monitoring to Ensure Quality in Home Infusion Therapy:
While none of the health insurers we spoke with identified significant
quality problems related to home infusion therapy, they all employ
certain practices to help ensure that their members receive quality
care. These include developing a limited provider network of infusion
pharmacies and home health agencies, requiring provider accreditation,
coordinating care among providers, and monitoring patient complaints.
Most health insurers we interviewed create a network by contracting
with a set of home infusion providers and suppliers that meet certain
participation criteria, such as adherence to specified industry
standards and licensure. One insurer's participation criteria contain
a set of standards, including staffing requirements, guidelines for
patient selection, and the ability to initiate therapy within 3 hours
of a referral call. The infusion providers that insurers include in
their networks range in size and may include large national chain
providers and stand-alone local home infusion providers.
Health insurers told us they rely on credentialing, accreditation, or
both to help ensure that plan members receive quality home infusion
services from their network providers. Home infusion accrediting
organizations conduct on-site surveys to evaluate all components of
the service, including medical equipment, nursing, and pharmacy. The
three accreditation organizations in our study reported that their
standards include CMS Conditions of Participation for home health
services,[Footnote 48] other government regulations, and industry best
practices. All of their accreditation standards evaluate a range of
provider competencies, such as having a complete plan for patient
care, response to adverse events, and implementation of a quality
improvement plan. According to accreditation organizations we
interviewed, an increasing number of providers are seeking home
infusion-specific accreditation. One insurer told us that home
infusion has minimal quality issues due to strong oversight of
pharmacies through state and federal regulation and by accrediting
institutions.
Accrediting organizations identified unique safety and quality factors
that must be considered when providing infusion therapy in the home
setting. First, home infusion providers must carefully evaluate the
willingness and ability of the patient, caregiver, or both to begin
and continue home therapy. Because infusion drugs are administered
directly into a vein, the effect of a medication error is greater and
faster in infusion therapy than with oral treatments. Providers must
therefore also take steps to ensure that patients can recognize the
signs and symptoms of an emergency. Second, providers must ensure that
patients have the appropriate infrastructure in the home to store
equipment, drugs, and supplies, and to provide the therapy. Needed
infrastructure often includes a refrigerator to store infusion drugs
and sometimes safeguards to protect patients' drugs and supplies,
particularly in the case of controlled substances such as narcotics.
Home infusion providers must have emergency support services available
24 hours a day, 7 days a week in case of an adverse drug reaction or
to troubleshoot any problems with equipment, such as infusion pumps.
Officials from one accrediting organization told us that they also
expect infusion providers to have plans in place to deal with other
types of emergencies, such as a natural disaster.
While officials from accrediting organizations did not report any
pervasive quality issues, they described several common problems among
home infusion providers that demonstrate the complexity of the
treatment. Home infusion providers may not have staff with the
appropriate training and competencies, which may be a challenge for
small organizations. Also, they may inadequately coordinate care for
patients who receive multiple medications and have multiple
physicians. Furthermore, home infusion providers may not always meet
documentation and planning requirements for accreditation. For
example, officials from one accrediting organization stated that the
top two deficiencies for infusion companies are incomplete plans of
care and a lack of a comprehensive quality improvement program.
In addition, home infusion providers may find it challenging to meet
some technical standards, including pharmaceutical requirements. An
accrediting official observed that some infusion pharmacies are still
learning to comply with recent industry standards for combining
ingredients or other processes to create a drug in a sterile
environment. Poor procedures to track recalled items is another common
technical deficiency for home infusion providers. Providers generally
have recall processes for medications, but sometimes not for every
item used in the provision of care, as required by that accreditation
organization.
Communication and coordination of care between multiple entities is
particularly important for this type of treatment. Several of the
insurers we interviewed have processes to coordinate care for home
infusion therapy and told us that they take responsibility for that
function. Others rely on the patient's physician, home infusion
provider, discharging facility, or a combination of these to
coordinate care. Two of the health insurers use the prior
authorization process to coordinate care, as case managers initiate
contact with the member and home infusion provider and follow up
throughout the duration of the therapy.
In addition to policies and procedures related to quality, all of the
health insurers and accreditation organizations we interviewed have a
process for addressing patient complaints. None of the health insurers
told us that they have received significant complaints related to home
infusion. One insurer cited a case in which a specialty pharmacy had
diluted drug doses, and suggested that such problems concerning the
quality and integrity of drugs could be overcome with information
technology, such as bar coding of drugs.
Conclusions:
Due to the limited coverage of home infusion therapy under Medicare
FFS and some MA plans, non-homebound beneficiaries would need to
obtain treatment in alternate and potentially more costly settings--
such as a hospital, outpatient department, or physician's office--to
have all of the components of infusion therapy covered. All of the
health insurers in our study provide comprehensive coverage of home
infusion therapy for all members in their commercial health plans, and
some do so in their MA plans as well. Health insurers contend that the
benefit has been cost-effective, that is, providing infusion therapy
at home generally costs less than treatment in other settings. They
also contend that the benefit is largely free from inappropriate
utilization and problems in quality of care. Given the long and
positive experience health insurers reported having with home infusion
therapy coverage, further study of potential costs, savings, and
vulnerabilities for the Medicare program is warranted.
Recommendation for Executive Action:
The Secretary of HHS should conduct a study of home infusion therapy
to inform Congress regarding potential program costs and savings,
payment options, quality issues, and program integrity associated with
a comprehensive benefit under Medicare.
Agency and Other External Comments and Our Evaluation:
We obtained comments on a draft of this report from HHS and from the
National Home Infusion Association, a trade group representing
organizations that provide infusion and specialized pharmacy services
to home-based patients. HHS provided written comments, which are
reprinted in appendix I. Officials from the trade association provided
us with oral comments.
HHS Comments:
HHS stated that Medicare covers infusion therapy in the home for
beneficiaries who are receiving the home health benefit; other
beneficiaries have access to infusion therapy in alternate settings,
such as hospitals, outpatient departments, and physician offices. HHS
noted that adding home infusion therapy as a distinct Medicare benefit
would require a statutory change, and suggested we modify our
recommendation to recognize statutory authority would be required. To
make this more clear, we have rephrased our recommendation for
executive action.
National Home Infusion Association Comments:
National Home Infusion Association officials stated that few
beneficiaries, even among those who are homebound, receive infusion
therapy outside their homes due to the gaps in Medicare FFS coverage.
They told us that Medicare FFS does not cover care coordination and
clinical monitoring services when performed by infusion pharmacists--
the providers most familiar with infusion drugs and treatment
regimens. The officials said that homebound beneficiaries, therefore,
would not receive infusion therapy in their homes without having
supplemental coverage or paying out-of-pocket for services provided by
an infusion pharmacist.
However, CMS officials reported that infusion therapy in the home is
largely provided through home health agencies, which are responsible
for meeting a range of beneficiaries' care needs. These agencies may
perform care coordination and clinical monitoring functions themselves
or arrange for these services from an independent infusion provider,
according to CMS and a home health provider organization. In either
case, these services are covered and paid for under the Medicare home
health benefit.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to the Secretary of Health and Human Services, the CMS Administrator,
and interested congressional committees. The report also will be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 512-7114 or kingk@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff members who made major
contributions to this report are listed in appendix II.
Signed by:
Kathleen M. King:
Director, Health Care:
[End of section]
Appendix I: Comments from the Department of Health and Human Services:
Department Of Health And Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
May 24, 2010:
Kathleen King:
Director, Health Care:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Ms. King:
Enclosed are comments on the U.S. Government Accountability Office's
(GAO) report entitled: "Home Infusion Therapy: Differences Between
Medicare and Private Insurers' Coverage" (GAO-10-426).
The Department appreciates the opportunity to review this report
before its publication.
Sincerely,
Signed by:
Andrea Palm:
Acting Assistant Secretary for Legislation:
Enclosure:
[End of letter]
General Comments Of The Department Of Health And Human Services (HHS)
To The Government Accountability Office's (GAO) Draft Report Entitled,
"Home Infusion Therapy: Differences Between Medicare And Private
Insurers' Coverage" (GAO-10-426):
The Department appreciates the opportunity to review and comment on
this GAO draft report.
Medicare covers home infusion therapy drugs and services for Medicare
beneficiaries who are receiving the home health benefit. Beneficiaries
who are not receiving the home health benefit have access to infusion
therapy services and drugs in hospitals, outpatient departments and
physician offices.
The draft report summarizes coverage of home infusion therapy under
Medicare and private insurers. GAO recommends that the Secretary
conduct a study of the potential cost-effectiveness of establishing
comprehensive home infusion therapy coverage for all Medicare
beneficiaries. Since adding home infusion therapy as a distinct
benefit to the Medicare program would require a statutory change, we
recommend that GAO change its recommendation in the report to say,
"GAO recommends that the Secretary should conduct an analysis of the
program costs and the implications on quality and fraud and abuse
controls if Congress were to consider adding home infusion therapy as
a distinct benefit under the Medicare program."
We thank the GAO staff for their work in this important area and the
Office of the Assistant Secretary for Legislation for the opportunity
to comment.
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Kathleen M. King, (202) 512-7114 or kingk@gao.gov:
Acknowledgments:
In addition to the contact named above, Rosamond Katz, Assistant
Director; Jennie F. Apter; Jessica T. Lee; Drew Long; Kevin Milne; and
Julie T. Stewart made key contributions to this report.
[End of section]
Footnotes:
[1] Medicare also covers certain individuals with disabilities and
individuals with end-stage renal disease. In 2008, Medicare covered
about 45 million beneficiaries, nearly 8 million of whom were dually
eligible for both Medicare and supplemental coverage under their state
Medicaid programs.
[2] See Medicare Catastrophic Coverage Act of 1988, Pub. L. No. 100-
360, § 203, 102 Stat. 683.
[3] H.R. 574, 111th Cong. (2009), and S. 254, 111th Cong. (2009).
[4] Traditionally, Medicare FFS included Medicare Part A (hospital
insurance) and Part B (supplementary medical insurance). For purposes
of this report, we are also including Part D (outpatient prescription
drug coverage) in our analysis of Medicare FFS.
[5] CMS is the agency within the Department of Health and Human
Services that administers the Medicare program.
[6] An exception is hospice care, a benefit provided under Medicare
FFS but not covered in the MA program.
[7] Commonly infused antibiotics include ceftriaxone, vancomycin,
daptomycin, ertapenem, cefepime, cefazolin, piperacillin/tazobactam,
and meropenem, according to industry experts.
[8] Home health care is covered under Part A for beneficiaries needing
treatment following a stay in the hospital and for those not enrolled
in Part B. Home health care is covered under Part B for beneficiaries
who have not been recently discharged from the hospital and, in some
cases, when beneficiaries have exhausted their coverage under Part A.
[9] Medicare designates beneficiaries as homebound if they are able to
leave home only with great difficulty and for absences that are
infrequent and of short duration or for the purpose of receiving
medical care. In this report, our use of the term "homebound" refers
to this Medicare definition.
[10] DME is reusable medical equipment such as wheelchairs or hospital
beds. See 42 C.F.R. § 414.202 (2010). Medicare-reimbursed supplies
include items that are used and consumed with DME, such as drugs used
for inhalation therapy, or that need to be replaced frequently
(usually daily), such as surgical dressings.
[11] An infusion pump may be necessary for patients receiving
therapies of extremely high or low dosage, therapies of long duration
or frequent administration, or therapies needing a carefully
controlled rate of administration. Other infusion devices, such as
intravenous gravity drip systems, are considered to be appropriate in
many other cases.
[12] Medicare FFS beneficiaries can purchase Medigap insurance
policies, offered by private insurers, that help cover cost-sharing
amounts for Medicare-covered services.
[13] MA plans do not cover hospice care, a benefit which is provided
under Medicare FFS.
[14] See the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Pub. L. No. 108-173 § 101, 117 Stat. 2066,
2071 (2003) (codified, as amended, at 42 U.S.C. § 1395w-101).
[15] Formularies must include drugs within each therapeutic category
and class of covered Part D drugs. CMS generally requires drug plan
sponsors to cover at least two Part D drugs in each category and
class, subject to approved exceptions or instances when there is only
one drug in a particular category or class.
[16] Plan formularies commonly have three tiers, with an additional
tier for specialty drugs. On a typical three-tier formulary, tier 1
might consist of low-cost generic drugs, tiers 2 and 3 would comprise
brand-name drugs, and an additional tier would include high-cost
specialty drugs. Plans do not consistently list the same drugs on the
same tiers.
[17] See 42 C.F.R. § 423.100.
[18] We have previously reported on Medicare improper payments for
items and services in the home. See GAO, Medicare: Improvements Needed
to Address Improper Payments in Home Health, [hyperlink,
http://www.gao.gov/products/GAO-09-185] (Washington, D.C.: Feb. 27,
2009); Medicare: Covert Testing Exposes Weaknesses in the Durable
Medical Equipment Supplier Screening Process, [hyperlink,
http://www.gao.gov/products/GAO-08-955] (Washington, D.C.: July 3,
2008); and Medicare: Improvements Needed to Address Improper Payments
for Medical Equipment and Supplies, [hyperlink,
http://www.gao.gov/products/GAO-07-59] (Washington, D.C.: Jan. 31,
2007).
[19] U.S. Senate, Committee on the Judiciary, Effective Strategies for
Preventing Health Care Fraud, 111th Cong., 1st sess., October 28, 2009.
[20] TPN is a method of feeding a patient intravenously that is used
when the patient's gastrointestinal tract cannot tolerate nutrition by
mouth or a feeding tube. Enteral nutrition employs a feeding tube to
deliver a liquid nutritional formula to the stomach or small intestine.
[21] The change in payment mechanism for hospitals from per day to per
episode created an incentive to reduce the length of stay.
[22] Pub. L. No. 100-360, § 203, 102 Stat. at 721-25.
[23] Pub. L. No. 101-234, § 201(a)(1). The repeal of many provisions
of the act was largely attributed to negative public reaction to
increased taxes on Medicare beneficiaries, which would have been
needed to finance the main goal of the legislation--an overall limit
on how much beneficiaries would pay out of pocket for health care.
[24] Office of Technology Assessment, Home Drug Infusion Therapy Under
Medicare, OTA-H-509 (Washington, D.C., May 1992).
[25] See Pub. L. No. 108-173 § 101, 117 Stat. 2066, 2071-2152.
[26] H.R. 574, 111th Cong. (2009), and S. 254, 111th Cong. (2009).
[27] If a beneficiary meets all of the criteria for coverage of home
health services and the home health agency is providing care under
Part A, any DME provided to that patient and billed by the home health
agency must also be provided under Part A. In situations in which the
patient meets the criteria for coverage of home health services and
the home health agency is providing the home health care under Part B
because the patient is not eligible for Part A, the DME provided by
the home health agency may be furnished under Part B.
[28] Medicare FFS does not pay a dispensing fee for Part B drugs,
including DME drugs.
[29] These data include infusion pumps provided to homebound as well
as non-homebound beneficiaries; the data provided by CMS did not
distinguish between the two.
[30] National coverage policies are developed by CMS, and local
coverage policies are developed by regional contractors that process
DME claims.
[31] See 42 C.F.R. § 423.153(c).
[32] According to CMS, while Part D sponsors remain responsible for
complying with all Part D requirements, they are permitted to delegate
their responsibilities to network pharmacies.
[33] In addition to safety and cost concerns, prescribing physicians
may have a financial incentive to infuse chemotherapy drugs in their
offices rather than ordering infusion services for the home, according
to one insurance spokesperson.
[34] One of these insurers provides comprehensive coverage of home
infusion therapy in all of its MA plans except private fee-for-service
plans. Unlike network-based MA plans, such as health maintenance
organizations or preferred provider organizations, private fee-for-
service plans are not currently required to have networks of
contracted providers if they pay providers Medicare FFS rates or
higher.
[35] CMS has allowed plans to cover infusion drugs under Part C since
2007.
[36] Medicare pays for most other Part B drugs based on the lesser of
the actual charge or 106 percent of ASP. See 42 C.F.R. § 414.904
(2009). For more information on Medicare payments for Part B drugs,
see GAO, Medicare Part B Drugs: CMS Data Source for Setting Payments
Is Practical but Concerns Remain, [hyperlink,
http://www.gao.gov/products/GAO-06-971T] (Washington, D.C.: July 13,
2006).
[37] One insurer we interviewed generally includes nursing services in
the per diem payment.
[38] Health insurers use a uniform set of reimbursement codes for the
per diem payment. These standard codes--known as "S codes"--were among
those developed to meet the requirements of the Health Insurance
Portability and Accountability Act of 1996. The act required HHS to
adopt standard code sets for describing health-related services in
connection with financial and administrative transactions, and
required members of the health care industry to use these code sets.
[39] The majority of specialty drugs are infusible or injectible
drugs, according to a recent study. Nearly a third of all infusible or
injectible drugs are on a specialty tier in at least one Part D
prescription drug plan while only 1 in 10 pills are on specialty
tiers. E. Hargrave, J. Hoadley, and K. Merrell, Drugs on Specialty
Tiers in Part D (Washington, D.C.: Medicare Payment Advisory
Commission, 2009).
[40] Improper payments include those for services not covered, not
medically necessary, or billed but never actually provided. They can
result from inadvertent errors as well as fraud and abuse. Inadvertent
errors are often caused by clerical mistakes or a misunderstanding of
program rules, whereas fraud is an intentional act of deception to
benefit the provider or another person. Abuse typically involves
actions that are inconsistent with acceptable business and medical
practices.
[41] Health insurers also told us that provider education was an
important and effective tool, in terms of informing providers of both
coverage and payment guidelines and appropriate medical indications.
[42] Prior authorization is one of the front-end management approaches
that we have previously found may help manage Medicare FFS spending
growth for imaging services. See GAO, Medicare Part B Imaging
Services: Rapid Spending Growth and Shift to Physician Offices
Indicate Need for CMS to Consider Additional Management Practices,
[hyperlink, http://www.gao.gov/products/GAO-08-452] (Washington, D.C.:
June 13, 2008).
[43] CMS, through its payment contractors, employs an array of
retrospective payment safeguards in Medicare intended to help ensure
payment accuracy.
[44] All of the health insurers we interviewed stated that they have
not experienced any serious problems with fraud or abuse in home
infusion therapy. There were several high-profile cases of fraudulent
Medicare claims for infusion therapy in recent years, but they
occurred in outpatient clinics rather than in home settings.
[45] A large insurer reported that it requires prior notification
rather than prior authorization for some home infusion drugs.
Providers must inform the patient's health plan before initiating
treatment.
[46] To prevent the overuse of expensive medications, some Part D
sponsors require lower-tier drugs to be tried first. See GAO, Medicare
Part D: Plan Sponsors' Processing and CMS Monitoring of Drug Coverage
Requests Could Be Improved, [hyperlink,
http://www.gao.gov/products/GAO-08-47] (Washington, D.C.: Jan. 22,
2008).
[47] These insurers said that their prior authorization criteria were
based on reviews of clinical guidelines or research from current
medical literature. For example, to determine whether drug-specific
coverage criteria have been met, insurers may look for citations in
drug reference guides to see if research supports using the drug for
the prescribed indication.
[48] Conditions of Participation are minimum health and safety
standards that health care organizations and providers must meet in
order to begin and continue participating in the Medicare and Medicaid
programs.
[End of section]
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