Cost Recovery

Issue
Blood is a gift of life, voluntarily donated from generous blood donors to help others. While there is no cost for blood, there are costs incurred by every blood collection agency which supplies blood to hospitals. Questions are regularly raised about the cost of blood to hospitals and why different blood collection agencies have different prices.

Facts
The Red Cross stands alone in being a full service blood center able to readily meet the needs of the community. As a full service blood center, we stand ready, 24-hours a day, 7 days a week to provide blood and blood components to meet normal, special and emergency needs in large trauma centers and small rural hospitals, in the quantities necessary and by the blood types required to help save lives.

As a not-for-profit organization, the Red Cross provides blood to hospitals on a cost-recovery basis. Blood is given voluntarily as a gift from one person to help save a life, but there are costs associated with being a full-service blood center. The cost per unit of American Red Cross blood products is distributed among recruitment, collection, FDA-mandated testing, processing, storage, and distribution. These factors, in addition to the Red Cross being a national blood supplier, contribute to the price of blood.

Individual prices are based on two factors. The first factor is whether a hospital participates in one of our various programs to help increase blood donations. The second factor is the number of blood products purchased.

The American Red Cross has worked hard to advocate better reimbursement policies through the Centers for Medicare and Medicaid Services (CMS). The latest achievement occurred on November 1, 2006, when CMS increased payment amounts for 18 of 34 blood products. According to CMS, the 18 blood products account for approximately 81 percent of all blood units paid under the Outpatient Perspective Payment System (OPPS). The most significant increase was applied to the highest volume product, the leukocyte-reduced red blood cell. Improved hospital reporting can be in part accredited to the payment increases. The ARC has played a prominent role in providing an educational environment through annual reimbursement seminars and reimbursement updates to its hospital customers.

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