September 2, 2008

Mr. Kerry Weems

Acting Administrator                                                                           

Centers for Medicare & Medicaid Services

Attention: CMS-1385-P

P.O. Box 8018

7500 Security Boulevard

Baltimore, MD 21244-8018

Re: CMS 1404-P-- Medicare Program; Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2009 Payment Rates; Proposed Changes to the Ambulatory Surgical Center Payment System and CY 2009 Payment Rates

Dear Administrator Weems:

AABB welcomes the opportunity to comment on the proposed changes to the hospital outpatient prospective payment system for 2008.  AABB (formerly known as the American Association of Blood Banks) is a professional association dedicated to advancing transfusion medicine and cellular therapies.  AABB’s members include approximately 1,800 institutions, including hospital-based blood banks and laboratories, transfusion services and blood and bone marrow collection facilities, as well as approximately 8,000 individuals involved in blood, bone marrow, cord blood and peripheral blood stem cell collection, processing, storage and infusion.

Blood Products

AABB appreciates CMS’ continued attention to payments for life-saving blood products and we are pleased that CMS has proposed to modestly increase payment for the most commonly transfused blood products.  However, despite the slight increases in payment, CMS’ proposed payments in 2009 will continue to lag behind actual acquisition costs for the high volume  products. For example, we would note that the proposed payment of $192.43  for  the most commonly transfused blood product, leukocyte-reduced red blood cells (APC 0954) does not even cover the costs for acquiring this product in 2006, the most recent year for which comprehensive national blood cost data were collected. 

AABB conducted the 2007 National Blood Collection and Utilization Survey under a contract with the Department of Health and Human Services to collect data on a number of issues relating to blood supply and utilization, including cost issues.  In this nationwide survey, data were collected from approximately 1,700 hospitals.  Hospitals provided information regarding the average amount paid by hospitals in 2006 for blood products. AABB is particularly concerned about the proposed payment for APC 0954, leukocyte-reduced RBCs, which is by far the highest volume blood product reimbursed under Medicare.  In 2006, a unit of leukoreduced RBCs cost $213.94 and yet CMS is proposing to pay only $192.43 for this critical product in 2009.  In the intervening three years the costs of acquiring blood products continued to increase with new safety advances and increasingly expensive donor recruitment and retention efforts.  These safety measures include a new screening test for Chagas’ disease, initiatives to mitigate the risk of transfusion related acute lung injury (TRALI) and the movement toward improved, ISBT 128, labeling of blood products. 

Given the higher costs of providing blood products, AABB believes it is reasonable to assume that the average amount hospitals will pay for leukoreduced RBCs in 2009 will have increased  well above the 2006 acquisition cost of $214. This is true of other blood products as well. It should be noted that this rate reflects the cost of acquiring the blood product and does not include any allowance for the cost incurred by hospitals for overhead, storage, handling and wastage due to shelf-life limitations.  Thus, it is clear that the proposed APC rates will not cover the cost of this and other critical blood products.  AABB therefore recommends that CMS continue to increase payments for blood products, and particularly leukoreduced RBCs, to bridge the gap between Medicare payments and the actual costs incurred by hospitals.   

Thank you again for the opportunity to offer these comments.  If you have questions or require additional information, please contact me at 301-215-6554 or theresa_l@aabb.org.

Sincerely,

Theresa L. Wiegmann, JD

Director, Public Policy