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June 30, 2009

Charlene Frizzera
Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1406-P
P.P.O Box 8011
Baltimore, MD 21244-1850

Re: CMS 1406-P--Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Fiscal Year 2010 Rates and to Long-Term care Hospitals Prospective Payment System and Rate Year 2010 Rates

Dear Acting Administrator Frizzera:

The AABB, America's Blood Centers, American Red Cross and Advanced Medical Technology Association (AdvaMed) wish to offer our support for the Centers for Medicare and Medicaid Services’ (CMS) proposed change in the hospital market basket related to blood and blood products.

Currently, in calculating price changes for blood and blood products for the hospital market basket CMS uses the Producer Price Index (PPI) for finished goods less food and energy. The use of a “proxy” index was necessitated by the fact that a specific PPI for blood and blood products did not exist. However, using a proxy that had no relationship to the actual cost factors of the blood collection industry created problems in the past.

To address this issue, the Bureau of Labor Statistics worked with members of the blood collection community to establish a blood and blood products index as part of the official Producer Price Index system. The index has tracked the prices faced by hospitals for blood and blood products since June 2006.

Earlier this year, we asked CMS to adopt this index because it clearly was a more accurate and representative measure of changes in the cost of acquiring blood products than the PPI for finished goods. We support CMS’s proposed use of the PPI for Blood and Organ Banks for measuring changes in the cost of blood and blood products in calculating the hospital market basket. CMS can now incorporate a publicly available, government-produced index with known methodology that accurately reflects the costs hospitals actually face.

We appreciate CMS’s responsiveness to the need for greater accuracy in the calculation of price changes attributable to blood and blood products in the inpatient market basket.

Should you have any questions, please contact Theresa Wiegmann, AABB Director of Public Policy, at 301-215-6554 or



America’s Blood Centers

American Red Cross

Advanced Medical Technology Association (AdvaMed)