Dear CARRIER MEDICAL DIRECTOR:
I would like alert you to a problem with the least costly alternative (LCA) policy and the present local coverage determination (LCD) on this issue in NAME OF STATE OR STATES. I understand that you do not plan to change that policy in January 2005 when the Centers for Medicare & Medicaid Services (CMS) institutes the new "average sales price (ASP)" methodology. I hope that you will be open to discussing a new (LCD) on reimbursement for the leutinizing hormone-releasing hormone (LH-RH) drugs, specifically leuprolide acetate (brand name: Lupron) and goserelin acetate (brand name: Zoladex). As I understand from reading on the ASP methodology, and from discussions that representatives of the American Urological Association has had with staff at the CMS in Baltimore, MD, the entire concept behind ASP was to "create market forces" that will more accurately reflect the actual cost of these drugs and lead to healthy competition and control drug costs. The original concept behind LCA (which incidentally is not a national policy, but decided by individual carriers - some states do not have LCA) was that the cost of the drugs was so high that to "save money" some carriers decided to pay the lowest price for different drugs that had the same therapeutic effect, even though the drugs had very different methods of administration.
Now that the ASP methodology is about to go into effect, it seems counter-intuitive to continue a policy that was made in the past as an "economic" decision when the "market forces" have been drastically altered by ASP. As the "markup" (difference between what we pay to purchase the drugs and CMS reimburses) now may not even cover our cost of ordering, inventorying, recording the administration of the drug and billing, let alone the additional cost of the "float" on purchasing these very expensive drugs, to continue LCA seem inappropriate and unfair to physician practices.
These two drugs are different, and in particular the administration of the two drugs is vastly different. Because of the method of administration, many patients prefer one drug over the other. J9217 (leuprolide acetate) is given as an intramuscular injection typically into the buttocks; J9202 is given as an implant typically into the rectus muscle of the abdomen after the administration of local anesthesia, or application of an ice pack for 10 - 15 minutes before injection.
As there is now a very small difference between the proposed CMS reimbursement for these two drugs I ask you to consider re-evaluating your position so that physician practices can received the payment intended by CMS for each unique drug under the ASP methodology.
I look forward to hearing from you as soon as possible regarding whether you will continue the LCA policy for leuprolide acetate and goserelin acetate after January 1, 2005, and specifically why you feel the ASP methodology is incorrect and will not address your concerns.