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Compare your costs with ASP and Medicare allowable

Compare your costs with ASP and Medicare allowable

The price of oncology medications is skyrocketing, and reimbursement rates for these agents are often inadequate. This situation may be hurting your medical practice more than you realize. You need to determine what you are paying for your oncology drugs, as compared to the Average Sales Price (ASP) and to the Medicare allowable for these drugs.

Why smaller practices are suffering

Within our client base, we are finding that several small oncology/hematology practices and solo practitioners are ending up in the red relative to their oncology drugs. Here are some of the factors influencing this situation:

• Smaller practices and solo practitioners don't have the purchasing power of larger practices. Therefore, they pay higher drug prices.

As an example, the average solo practitioner in the United States can typically purchase drugs at ASP plus 3%. This indicates that some entities are purchasing drugs below ASP.

• The Medicare allowable for these drugs is ASP plus 6%. Medicare's payment is 80% of the allowable. While this may seem to come out in your favor, many times it does not, and you end up paying for your patients' drugs.

• The drug cost that isn't covered by Medicare is covered by either secondary insurance or paid by the patient himself. Medicare estimates that 80% of patients have secondary insurance. Our experience at Neltner Billing shows otherwise. Your mix of Medicare patients will impact your collections.

Facts on Drug Costs

We have found within several solo practices:

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