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Comments to CMS on Proposed 2010 Outpatient Payments for Blood Products – 08/31/09

August 31, 2009

Ms. Charlene Frizzera
Acting Administrator
Centers for Medicare and Medicaid Services
Attention: CMS-1414-P
7500 Security Blvd.
Baltimore, MD 21244-8013

Re: Medicare Program: Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2010 Payment Rates (CMS–1414–P)

Dear Acting Administrator Frizzera:

AABB appreciates the opportunity to comment on the proposed changes in the hospital outpatient prospective payment system (HOPPS) for 2010. 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. This letter outlines our concerns relating to the proposed payment rate for blood and blood products. Our additional concerns relating to the proposed payments for stem cell procedures are set forth in separate, joint comments filed by AABB, the American Society for Blood and Marrow Transplantation, and the National Marrow Donor Program.

The payment for blood and blood products under HOPPS has been problematic since the inception of the HOPPS system. The problem flows from the fact that blood is unique and the usual methodology for calculating ambulatory payment classification (APC) rates based on hospital charges adjusted to costs (CCR) has proven problematic for calculating accurate APC rates for blood products. This is due in part to a natural reluctance by many hospitals to mark-up charges for blood products to the same degree as other services. Moreover, blood products go through various processing steps which sometimes are performed by the hospital and sometimes are performed by a blood supplier and which can complicate CCR process. AABB appreciates the fact the Centers for Medicare and Medicaid Services (CMS) has recognized these complexities and has made a number of accommodations over the years so that the calculated rates for blood products are as fair as possible. However, problems remain and in many cases the APC rates for blood products still do not cover the costs incurred.

There are 34 APCs established for the various blood products and a comparison of the proposed 2010 to the 2009 rates shows large reductions in payment for a number of blood products which seem inexplicable when prices for blood have been increasing. For example, payment for Whole Blood (P9010) would go down by 10 percent, payment for platelet rich plasma (P9020) would go down by 62 percent and payment for platelet pheresis irradiated would be reduced by 24 percent. The highest single volume blood product, leukocyte-reduced red blood cells (P9016), would also be reduced in 2010 compared with 2009 under the proposal even though data indicate that the cost of blood products has increased. We do acknowledge that some of the biggest swings in payment are for lower volume products and that there are some increases as well.

For 2010, CMS has adopted the Bureau of Labor Statistics Producer Price Index (PPI) index for blood and organ banks in calculating the hospital market basket. The latest report for the period to July 2009 indicates that the index compared with July 2008 increased by 3.1 percent. In lieu of using the claims-based data for blood and blood products which is error prone and subject to wide and inexplicable swings in costs, AABB strongly recommends that CMS base the 2010 APC rates for the 34 blood APCs on the 2009 rates increased by the 3.1 percent change in the PPI from July 2008 to July 2009. This recommended change would involve using governmental, and not private sector, estimates which have already been accepted by CMS for purposes of calculating the hospital market basket. Finally, use of the PPI for blood products in calculating APC rates is not without precedence. For example, in the final HOPPS rule for 2005, CMS used the then-recognized PPI for blood and derivatives in calculating the rates for low volume products (see page 65816 of the November 15, 2005 Federal Register).

Thank you again for the opportunity to offer these comments. AABB looks forward to continuing to work with CMS to improve the process for calculating the payment for blood products.


Theresa L. Wiegmann, JD
Director of Public Policy