Misguided Medicare Money Mayhem

Karl Schwartz is a tireless lymphoma patient advocate who is co-founder and president of Patients Against Lymphoma. Karl also oversees their excellent website, Lymphomation.org.

A missive from Karl came in today detailing how the Centers for Medicare and Medicaid Services (CMS) is proposing to cut reimbursements for two radioimmunotherapy drugs to less than their cost. Their collective response to the Deputy Administrator of CMS can be viewed in PDF or HTML.

The two immunotherapy drugs in question are Bexxar (I-131 tositumomab) and Zevalin (Y-90 ibritumomab). They are among the most effective drugs used to treat lymphoma, a cancer that strikes 1 in every 50 people in the US with over 500,000 patients now living with the disease.

Since most health insurance companies use Medicare reimbursement rates as their basis for cost coverage, the proposed change in reimbursement will have broad impact on lymphoma patients living with the disease. What does this mean to lymphoma patients? Some hospitals may discontinue use of these drugs (unless they want to subsidize the costs) and the resulting reduction in their use will provide disincentives for drug companies to develop future therapies for lymphoma. Most importantly and most acutely, patients will be denied the most effective therapies for this disease, one which can be put into prolonged or complete remissions with treatment regimens that include radioimmunotherapy.

If you care to respond to this insanity, Lymphomation.org makes it very easy for you to fill in four lines of information to register your support for their letter urging CMS to reconsider this dangerous and disturbing precedent.

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Thank you so much!!!!

Thank you, I was planning on using one of these drugs for my next relapse and had I known some of the new data, I might have chosen it for my 1st treatment. THESE ARE VERY IMPORTANT MEDICINES!!!!

Thanks for spreading the word. This is a critical issue for lymphoma patients and Karl is right on. Leonard

By Leonard Rosen (not verified) on 30 Aug 2007 #permalink

Thank you so much for posting this. Any help we can get to keep these drugs available for those of us who may need them is so appreciated!

Thank you for helping to spread this unfortunate news. In less than two weeks, I will celebrate 5 years of remission, thanks to radioimmunotherapy. It worked when nothing else did. If Medicare's proposal is adopted, others won't have the same opportunity that I did - and so would encourage every reader to endorse Karl's letter and ask friends and family members to do the same. A grassroots effort may be our only hope. Appreciate your support!!!

By betsy de Parry (not verified) on 30 Aug 2007 #permalink

Thanks for putting this up.

Lymphoma is hard enough to deal with without losing a treatment option! They'd never do this to a breast cancer treatment that had been shown to work!

Thank you for posting this. Those of us who may need these drugs are fighting to keep them available.

Thanks for your support.

By Jim Fitzgerald (not verified) on 30 Aug 2007 #permalink

Can't thank you enough...I have FNHL and have not yet chosen a method of treatment. I would be deprived of my right to live if they do away with this option because of what appears to be a MONEY issue... It is DISGUSTING, INHUMANE, DISHEARTENING & DEMORALIZING for people who need these options available in order to LIVE LIFE!

If these people (The Government) had a family member that was diagnosed with a NHL or any form of cancer for that matter, they would want the best treatment available for their loved one...and you can bet your bippy that they would be fighting tooth and nail to get any and all treatment options available to them, not to take away from PEOPLE IN NEED ...This Misguided Medicare Money Mayhem
needs to be stopped in it's tracks... enough said?


Having this important option of RIT for those of us with NHL is so necessary, and I remember it was labeled as a "smart bomb" back when it was approved by the FDA. Now, with all the research money that was spent developing this treatment back when, to not have this lifesaving drug available because of money is unbelievable! Thank you so much for this blog! Betty

By Betty Post (not verified) on 30 Aug 2007 #permalink

Thanks so much for posting this. As an MCL patient in remission, my husband needs every arrow in the quiver when/if it's time to do battle again.

This proposal would certainly effect everyone's ability to get the drugs whether they are using CMS or are privately insured.

Your blog is thoughtful and informative to those of us who are looking for answers. I appreciate your work.

Thank you so much for your support of this important chemo option!

Thanks so much for your attention to this issue

Have been poking around through the Federal Register trying to get some handle on the actual figures and CMS's explanations for same. So far, I note that Medicare reimbursement for administration and supply of tositumomab in 2007 was set at $1374.83, and the proposed reimbursement for administration and supply in 2008 is $1925.11.

I also see there is a discussion of proposed Medicare reimbursements for therapeutic radiopharmaceuticals beginning on page 42738 of the Federal Register, volume 72 (August 2, 2007). I haven't had a chance to read it yet.

I've scanned the discussion of proposed Medicare reimbursements for radiopharmaceuticals like Bexxar and Zevalin. I'm going to quote a chunk of it. Apologies in advance that it is in CMS's own peculiar version of medico-legalese. A couple of definitions (my own - if these are defective or less than adequate in some way, please correct me) first: "OPPS" - the outpatient prospective payment system, Medicare's reimbursement system for hospital outpatient services; "CCR" - cost-to-charge ratio, used by Medicare to calculate a hospital's costs based on its billed charges; "charge compression" - marking up prices for expensive items less than prices for cheaper items.

Here's the quote:

"We note that we have received anecdotal reports from some industry stakeholders asserting that the mean costs for the most expensive radiopharmaceuticals are understated in our claims data. We specifically invite comment on how the CY 2008 OPPS payment rates that we are proposing for therapeutic radiopharmaceuticals compare with the acquisition and associated handling costs of an efficient provider. We also are soliciting suggestions on approaches that could be adopted by Medicare or industry groups to promote improvements in hospital reporting of charges and costs for therapeutic radiopharmaceuticals to the extent that they are warranted and feasible. Some stakeholders have stated that charge compression may be adversely affecting our estimates of the mean cost for expensive radiopharmaceuticals. As discussed in more detail in section II.A.1 of this proposed rule, while we are not proposing to implement adjustments for charge compression for CY 2008 based on the RTI Report, which focused only on inpatient charges, we are proposing steps to explore this issue further for the future. We are proposing to develop an all-charges model that would compare variation in CCRs with variation in charges to establish disaggregated CCRs that could be applied to both inpatient and outpatient charges. We are also proposing to evaluate the results of that methodology for purposes of determining whether the resulting disaggregated CCRs should be proposed to adjust for charge compressions in developing the CY 2009 OPPS payment rates."

Explanation of the foregoing, and other stuff I left out of the quote so it would be of manageable size:

1. The only change proposed in Medicare's reimbursement for these drugs, other than using hospital claims (Medicare billing) data from 2006 instead of 2005, is to base them on the CCRs of the specific hospital departments in which the drugs are administered, rather than overall hospital CCRs. This isn't what's causing the ruckus, so far as I can tell, so I believe it may be inaccurate to characterize the problem as a proposed Medicare reimbursement cut.

2. Rather, it appears to me the problem is that Medicare proposes in 2008 to continue to base reimbursement on a calculation method that many feel results in payments inadequate to ensure a continuing market for these drugs, endangering patient access.

The crux of the difficulty appears to be that (a) Medicare bases its reimbursement on costs as calculated from hospitals' charges, using the CCR; (b) in the case of very expensive treatment regimes like Bexxar or Zevalin, hospitals mark them up less than they do less expensive treatments; so (c) applying a CCR calculated on the basis of higher mark-ups to charges for these low mark-up items results in calculated costs lower than the actual costs of the drugs.

3. In the quoted section above, CMS says it's aware of reports to this effect, and will consider ways to try to make reimbursements for these treatment regimes more accurately reflect actual costs - after 2008, though.

THANK YUO SO MCCH for yuor support! TRUTH!

Hey all, thanks for the thanks but it's totally unnecessary. Like everyone else, I have a number of family members who are cancer survivors and have benefited from cutting-edge cancer treatments. It's unfair for reimbursements to not even cover the institutional costs of the drugs so I hope that every letter signed will make an impact.

Can't say how much I appreciate Abel's assistance on helping to raise awareness of this issue that's so vital to patients facing lymphomas.

Must also note and underscore that the main credit goes to Betsy de Parry for alerting our group to this issue, to her research work, and signficant contributions in drafting the letter.

Dear Jud: Appreciate your comments on how the costs may be estimated by CMS. Noting that our uncertainty about methodology was touched on in the letter:

"Whatever the basis for the mean costs by CMS � in both the therapeutic (rx) and diagnostic (dx) setting � the proposed ... results in substantial reimbursement reductions, resulting in payments to hospitals that �are too low and inadequate�. "

Please feel free to contact our group and discuss further. There may still be time for an addendum.