Infusion Centers do a notoriously poor job of setting fees, particularly in the hospital setting. Part of this is the nature of the volatility of infusion drugs. Our team knows the infusion center business both from the hospital and practice perspective – We know that by developing a systematic approach to setting the fees for drugs and infusion services you are much more likely to have a sustainable service line or practice.
1) Infusion Center fees are not typically managed in a consistent manor. It is not uncommon to see fees that have not been changed in years - yet the reimbursement of pharmaceuticals is changed on a quarterly basis by Medicare. Commercial carriers typically do not change their rates of reimbursement more than annually, but they are starting to mirror the Medicare model of reimbursement.
2) You might feel "safe" by charging a fee for your infused drugs that is 300 or 400 percent of Medicare, but you might want to re-think this as transparency in healthcare becomes more pervasive. Recently an article identified that one hospital had charges for a certain drug that was 10 times the rate of the competing hospital. That is the way this business goes you might say, but the reality is that the lower priced facility was still several times higher than the Medicare allowable.
3) Margin for your infusion drugs seems to be a simple calculation: Simply take the reimbursed rate less the acquisition cost. However, drugs are reimbursed based on their HCPSC codes. Consequently organizations that set the fee for a drug like Remicade at the vial price, or the typical dose may be either over charging or under charging for their products.
Our team believes that by developing a systematic approach to pricing you can still ensure adequate margin, be transparent to the public and this approach can be helpful as you negotiate contracts with your payors.
To find out more, contact our team for a free 30 minute consultation to learn more about how we can help you manage a sustainable infusion center.