New Medicare Rule Will Cut Payments for Cancer Drugs
CMS beginning Jan. 1, 2008, will set a standard Medicare reimbursement rate for a class of cancer drugs called radioimmunotherapies that patient advocates and makers of the treatments say sharply reduces payment and might make the drugs inaccessible to patients, the New York Times reports.
The treatments include GlaxoSmithKline's Bexxar and Biogen Idec's Zevalin. The drugs, which only need to be administered once, are used to treat non-Hodgkins lymphoma in people who have not responded well to other treatments and have few remaining treatment options. Clinical studies have shown that the drugs can put the cancer into remission for years in some patients.
Under the new rule, CMS will reimburse Medicare physicians about $16,000 for each treatment administered. The drugs contain radioactive material, so they must be administered by licensed technicians and physicians, usually found only at hospitals.
CMS officials said that they based the new rate on actual prices hospitals have paid for the drugs. According to the agency, Medicare currently reimburses each claim individually, which has caused rates to vary widely. Deputy CMS Administrator Herb Kuhn said that although officials realize the value of the drugs, Medicare does not want to overpay and believes that using hospital data is the most accurate method of determining reimbursement.
Most other drugs administered by injection at physician offices and hospital outpatient clinics are reimbursed based on the average price of the drugs, as reported by the companies that manufacture the treatments, plus a 6% fee to cover handling costs. However, Medicare has refused requests by GSK to use that reimbursement method for radioimmunotherapies.
GSK and Biogen criticized the new reimbursement rate, saying that the treatments cost about $30,000 each. Patient advocates and the drug makers say hospitals could refuse to provide the treatments to Medicare beneficiaries because the new reimbursement rate is too low.
Under federal rules, hospitals that do not offer a treatment to Medicare beneficiaries cannot offer the treatment to other patients, even if insurers cover the full cost of the treatment.
GSK submitted its pricing data to CMS to prove that the hospital claims data were inaccurate. GSK spokesperson Sarah Alspach said, "Our feeling is there is a flaw in the methodology."
Advocates also are concerned that the new reimbursements will prevent development of other types of radioimmunotherapies. Advocates had hoped that a new study, to be released on Monday at a hematology conference, that found the drugs work as well as or better than standard treatments for non-Hodgkins lymphoma would persuade more physicians to prescribe the drugs (Berenson, New York Times, 12/7).