SNM responds to CMS reclassification of diagnostic radiopharmaceuticals

SNM petitions for CMS to reconsider its new radiopharmaceutical classification. Source: Medi-Radiopharma

Despite statutory language in the Social Security Act defining radiopharmaceuticals as "specified covered outpatient drugs," the Centers for Medicare & Medicaid Services (CMS) recently reclassified diagnostic radiopharmaceuticals as supplies instead of drugs. In response, the Society of Nuclear Medicine (SNM) has proposed recommendations for reforming radiopharmaceutical reimbursement under Medicare.

SNM said the new CMS distinction has bundled payment for diagnostic radiopharmaceuticals into the payment for nuclear medicine procedures, thus threatening Medicare and other patient access to the diagnostic drugs.

“Treatments exist today that can radically improve the prognosis for patients suffering from many devastating diseases, and yet reimbursement by CMS for these drugs is sometimes less than half the actual cost of producing them,” said 2008-09 SNM President Robert W. Atcher, PhD. “As we develop new therapeutic radiopharmaceuticals that have the potential to dramatically change disease outcomes, we need to ensure that they will be adequately reimbursed in order to be effectively utilized.”

To address the issue and ensure that CMS beneficiaries have access to diagnostic radiopharmaceuticals, SNM has issued the following recommendations:

1. All radiopharmaceuticals should be recognized and treated as drugs, not supplies.

2. CMS should continue to reimburse radiopharmaceuticals at charges reduced to cost in 2008, while working with the nuclear medicine industry (pharmacies and manufacturers) to develop standard payment methodology based on the average radiopharmaceutical invoice price at the distributor or nuclear pharmacy level (patterned after the average sales price model for drugs).

3. All radiopharmaceuticals should qualify for the same bundling threshold in 2008 ($60.00) as all other drugs.

4. CMS should accept and utilize external data sources to identify and appropriately reimburse radiopharmaceuticals under HOPPS, as the agency does for all other drugs. The most accurate sources of radiopharmaceutical cost data are nuclear pharmacies and manufacturers, according to SNM.

SNM said the imaging techniques are essential to the management of serious diseases, including heart disease and cancer, as they provide specific information about physiologic, metabolic and other functional activities in the body or its pathology and allow for effective targeted therapy.