In the FY 2011 Inpatient Prospective Payment System (IPPS) Proposed Rule, the Centers for Medicare & Medicaid Services (CMS) described its methodology for measuring the documentation and coding changes the agency believed resulted from the shift to Medicare Severity Diagnosis Related Groups (MS-DRGs).

The Moran Company (TMC) was asked to examine CMS’ approach and determine if it is an appropriate method to isolate documentation and coding from the other factors that could affect the “Case Mix Index (CMI)”—a measurement of average patient severity.

In the proposed rule for calendar year 2009 payments, CMS is proposing to reimburse hospitals for separately paid drugs in the hospital outpatient setting based on Average Sales Price (ASP) plus 4 percent.  According to CMS, this amount includes the acquisition cost of the drugs and an allowance for pharmacy overhead.  In this May 2008 report, The Moran Company simulates an alternative payment methodology which attempts to deal with the problem of charge compression and the uneven distribution of pharmacy overhead among high and low cost drugs, while remaining budget neutral.   

The Moran Company was engaged by Pfizer to evaluate the impact of Authorized Generics (AGs) during the Hatch-Waxman Paragraph IV exclusivity period, in order to estimate the likely impact on consumers and payers if AG entry during the exclusivity period were effectively precluded by statute.  In particular, we were asked to render a judgment on whether the Congressional Budget Office (CBO) would conclude that legislation banning AG entry during a Paragraph IV exclusivity period would be scored as increasing the Federal budget deficit.  We estimate that legislation banning AG competition against generics with Paragraph IV exclusivity would lower Federal revenues and increase Federal outlays for a combined deficit increase of $729 million over 2008-2012, and by $1.1 billion over 2008-2017.  We also conclude that CBO is unlikely to find any economically significant long run deterrent effect on Paragraph IV activity, and hence no offsetting savings from a ban on AG entry.

This report, prepared for CSL Behring, provides our assessment of how the Congressional Budget Office might score legislation which would create the authority for CMS to make explicit add-on payments for IVIG, in both the office and outpatient settings, to cover provider shortfalls between product costs and Average Sales Price (ASP)-based reimbursement rates.  The legislation would also establish separate drug administration payments for home infusion of IVIG.

Under the Medicare Outpatient Prospective Payment System. August 2003. Prepared for Centocor. Prepared for Centocor.

Assessing the Viability of Technical Solutions to Problems in the System.  Prepared for the Practice Expense Coalition.