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Health plans restricting compounded drug payment

The reimbursement opportunities for compounded medications are shrinking. In February, the Centers for Medicare & Medicaid Services announced that it considers compounded inhaled medications not medically necessary. In addition, Aetna and Blue Cross Blue Shield (BCBS) have each taken recent steps to limit the number of compounded medications that they cover.

Last year, CMS announced it would change its billing codes to lower pharmacy payments for compounded medications. Now, under a new policy that went into effect July 1, CMS considers all compounded inhalation solutions "as not medically necessary." The new rule follows a letter sent last year by Sen. Chuck Grassley (R, Iowa) to Mark McClellan, then CMS administrator, questioning the safety of compounded inhalation medications.

According to BCBS, "drug compounding, the process of mixing, combining or alternating ingredients to create a customized medication, is considered experimental, investigational, and unproven." In its rationale for its new policy, BCBS pointed to a 2001 Food & Drug Administration study, which found that 34% of the 29 compounded medications collected for the study failed one or more standard quality tests. BCBS does make an exemption for progesterone therapy as a technique to reduce preterm delivery in high-risk pregnancies.

In addition, beginning in October, Aetna will no longer cover bioidentical hormones and thyroid compounded drugs. Aetna will still cover other compounded medications. According to the company's new policy, it considers a compounded medication appropriate only if it meets the following criteria: it contains at least one prescription ingredient that is FDA-approved, the compounded product is not a copy of commercially available FDA-approved drug product, and the safety and effectiveness of use for the prescribed indication is supported by FDA approval or adequate medical and scientific evidence in the medical literature.

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