New Medicare Rule Cuts Reimbursement For Class Of Non-Hodgkins Lymphoma Treatments

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Medicare Reimbursement

CMS beginning Jan. 1, 2008, will set a standardMedicare reimbursement rate for a class of cancer drugs calledradioimmunotherapies that patient advocates and makers of the treatments saysharply reduces payment and might make the drugs inaccessible to patients, the NewYork Timesreports. The treatments include GlaxoSmithKline's Bexxar and Biogen Idec's Zevalin.

The drugs, which only need to be administered once, are used to treatnon-Hodgkins lymphoma in people who have not responded well to other treatmentsand have few remaining treatment options. Clinical studies have shown that thedrugs can put the cancer into remission for years in some patients.

Under the new rule, CMS will reimburse Medicare physicians about $16,000 foreach treatment administered. The drugs contain radioactive material, so theymust be administered by licensed technicians and physicians, usually found onlyat hospitals. CMS officials said that they based the new rate on actual priceshospitals have paid for the drugs. According to the agency, Medicare currentlyreimburses each claim individually, which has caused rates to vary widely. DeputyCMS Administrator Herb Kuhn said that although officials realize the value ofthe drugs, Medicare does not want to overpay and believes that using hospitaldata is the most accurate method of determining reimbursement.

Most other drugs administered by injection at physician offices and hospitaloutpatient clinics are reimbursed based on the average price of the drugs, asreported by the companies that manufacture the treatments, plus a 6% fee tocover handling costs. However, Medicare has refused requests by GSK to use thatreimbursement method for radioimmunotherapies.

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Response

GSK and Biogen criticizedthe new reimbursement rate, saying that the treatments cost about $30,000 each.Patient advocates and the drug makers say hospitals could refuse to provide thetreatments to Medicare beneficiaries because the new reimbursement rate is toolow. Under federal rules, hospitals that do not offer a treatment to Medicarebeneficiaries cannot offer the treatment to other patients, even if insurerscover the full cost of the treatment.

GSK submitted its pricing data to CMS to prove that the hospital claims datawere inaccurate. GSK spokesperson Sarah Alspach said, "Our feeling isthere is a flaw in the methodology."

Advocates also are concerned that the new reimbursements will preventdevelopment of other types of radioimmunotherapies. Advocates had hoped that anew study, to be released on Monday at a hematology conference, that found thedrugs work as well as or better than standard treatments for non-Hodgkinslymphoma would persuade more physicians to prescribe the drugs (Berenson, NewYork Times, 12/7).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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