By Alison Knopf
A December 30 article in Modern Healthcare blithely described the cost of methadone—the medication—as $4,000 a year, and went on to repeat the error several times, calculating that the medication costs $76 a week (http://www.modernhealthcare.com/article/20151230/NEWS/151239992). Methadone actually costs less than $7 a week.
Although the article had a bottom-line message that was correct—that this amount of money spent on treatment is reasonable—it was completely wrong about the cost of methadone, which is far below $1 a day. In fact, it’s less than $400 a year.
Overstating the medication cost by 10 times is an unforgivable error, for it’s very easy to find out how much it costs. The average wholesale price—which nobody actually pays, any more than they pay the list price for a car—is 78 cents per 100-milligram dose.
Of course, very few people in this county get methadone only. It’s not a prescription you get filled at the pharmacy. The medication is dispensed by an opioid treatment program (OTP). Under strict federal and state laws, dispensing involves a lot of rules and requirements—and that’s where the cost of treatment with the medication adds up.
This is very important, as payers, including Medicare, start trying to figure out how OTPs are reimbursed. Using a pharmacy benefit alone—Part D in Medicare—obviously wouldn’t work. Billing for each individual service on a fee-for-service basis doesn’t make sense, because it’s cumbersome, and some services lack codes. A bundled rate makes the most sense, many people say, because OTP treatment is provided as a package.
“When I think of methadone treatment, I don’t think of just the medication—I think of the dosing administration, and all the supportive services,” said Jason Kletter, PhD, president of Bay Area Addiction Research and Treatment (BAART), based in San Francisco, California. It can cost more than $10 to administer one 25-cent dose of methadone, in the case of a patient who is getting dosed at the clinic and not with take-homes. Add the supportive services—drug testing, counseling, and other services—and it can be even more.
And for buprenorphine or extended-release naltrexone (Vivitrol), the cost of treatment would be much much more, because of the costs of the pharmaceuticals.
A per-week bundled rate recently proposed by the government for Tricare recipients is probably the best model for reimbursing OTPs, said Mark Parrino, president of the American Association for the Treatment of Opioid Dependence (AATOD). “This is a big step forward,” Mr. Parrino told AT Forum. “They proposed a weekly bundled rate of $125 per patient per week.”
Whether other payers—including Medicare and commercial payers—will follow suit is unclear. Where the Modern Healthcare article was correct was in the annual cost of treatment with methadone in an OTP: It’s about $4,000, including all ancillary services.
Watch future issues for more about reimbursement mechanisms for OTPs in the era of health care reform.
For the Federal Register Tricare proposed rule, go to https://www.federalregister.gov/articles/2016/02/01/2016-01703/tricare-mental-health-and-substance-use-disorder-treatment. Accessed March 29, 2016.