Published Online: Friday, December 1, 2006

Pharmacy leaders are urging Medicare officials to hammer out a 2-tiered reimbursement system that would provide extra compensation to pharmacists who dispense certain compounded medicines.

"Because of the time and effort required to prepare a compounded medication and the additional service costs incurred, the dispensing fee for a compounded medication should be higher than the dispensing fee for a noncompounded form," argued top officials from the American Pharmacists Association (APhA) and the International Academy of Compounding Pharmacists (IACP).

The joint appeal was prompted by recent statements by the former administrator of the Centers for Medicare & Medicaid Services (CMS), Mark McClellan, MD, PhD. He had indicated that CMS would create new billing codes to distinguish between compounded and noncompounded inhalation medications.

These new billing codes will allow CMS to continue reimbursing noncompounded forms of the drugs at 106% of the average sales price. APhA and IACP, however, raised concerns that the agency would be establishing "a separate— and likely lower—reimbursement rate for compounded preparations."

According to the officials of the 2 pharmacy groups, "compounding requires extra time and effort, special equipment, safety precautions, and testing—all of which add costs to the medication." They warned, "Pharmacies may be forced to discontinue providing compounding services and these important medications to their patients."

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