Did you think you were safe from the whims of CMS apparatchiks simply because you’re not a geezer yet? Think again.
Because Medicare bureaucrats have, in their infinite wisdom, decreed a reimbursement rate that barely covers half the cost of certain cancer drugs, many private patients will probably be denied life-saving treatment:
New Medicare rules for this class of radioimmunotherapy cancer drugs may bar thousands of lymphoma patients from receiving the treatment.
How does this affect private patients?
Federal law mandates that a hospital which doesn’t offer a drug to Medicare patients cannot offer it to patients with private insurance either.
Thus, since hospitals can’t afford to take a 50% loss on each Medicare patient receiving the treatment, they are effectively barred from offering it to anyone.
So, you could be a 40-year-old with gold-plated private insurance and still be subject to a death sentence handed down by some faceless Medicare bureaucrat.
Government bureaucrats are bad for your health.
UPDATE:
The Cheerful Oncologist weighs in on this from the perspective of a physician who treats cancer patients. Definitely worth a read.
Comments 12
Look, you work in hopsital economics I believe so you must know that it can’t possibly be true that all hospitals are paying the full whack for these overpriced drugs. The decision is based on typical rather than drug company determined fees, and surely you must agree that your taxes should go to paying only what is spent, not to what drug firms say it costs. Further, there must be more moves for transparency if we are ever to afford the many new therapies that are on the way.
Posted 11 Dec 2007 at 8:22 am ¶The decision is based on typical rather than drug company determined fees.
Actually, it is determined using information from something called an 837 file (which Medicare requires hospitals to provide with claims), and CMS has mismanaged its analysis of the data. Thus, the bureaucrats came up with the wrong number. But, being bureaucrats and impervious to market forces, they won’t go back and validate their findings.
Posted 11 Dec 2007 at 9:12 am ¶And what data is in that file? Here’s some quotes from an NYT piece - note ‘But most other drugs administered via injection in doctors’ offices or hospital outpatient clinics — as Bexxar and Zevalin are — are not reimbursed on the basis of what hospitals say they have paid.’
http://www.nytimes.com/2007/12/07/business/07drug.html?adxnnl=1&ref=business&adxnnlx=1197383026-C0I8+uLoQWQfu0mwRvQ7Kw
‘Hospitals typically do not disclose their reimbursement rates, or whether they make money on any given treatment. The American Hospital Association declined to comment on the matter….
…Herb B. Kuhn, deputy administrator of the Centers for Medicare and Medicaid Services, the agency overseeing Medicare, said that the agency recognized the value of the drugs. But, he said, Medicare does not want to overpay for the medicines and believes that hospital data is the most accurate way to set reimbursement.
But most other drugs administered via injection in doctors’ offices or hospital outpatient clinics — as Bexxar and Zevalin are — are not reimbursed on the basis of what hospitals say they have paid. Instead, companies report the average price of their drugs to Medicare. Medicare then reimburses doctors and hospitals at that price, plus a 6 percent fee to cover handling costs.’
Posted 11 Dec 2007 at 9:34 am ¶The 837 file is a requirement of HIPAA (And you thought that reg was about privacy, didn’t you?). It has nothing to do with what hospitals pay for drugs or anything else. The file contains all manner of data about the patients (much more than anything that could be gleaned pursuant to the Patriot act, BTW). The specific data that CMS is supposed to use for reimbursement purposes has to do with how much hospitals have billed Medicare over some finite period of time. But, as I said, they screwed up the calculation.
The 837 file is what the linked article is referring to when it says “Moules said he believed the data received from hospitals was skewed …”
Posted 11 Dec 2007 at 10:12 am ¶‘Medicare then reimburses doctors and hospitals at that price, plus a 6 percent fee to cover handling costs.’
As someone who treats medicare patients with injectable drugs, i can tell you that this is false.
What actually happnes (at least in my area) is that medicare reimburses the lowest available wholesale proce, which it determines by polling the suppliers. Now they don’t tae into account volume discounts or minimum purchase requiremens.
So if the lowest available rcioe for drug X is $500 per dose, that is what medicare pays. Now say the supplier with that price has a 20 dose purchase minimum. The supplier with the next best price has a 5 dose minimum and sells the drug for $600. If I cannot afford to float the 20 dose purchase (or cannot dispense 20 doses before they expire), I must displense the drug at a loss of $100/dose, or not dispense it at all.
Posted 11 Dec 2007 at 10:16 am ¶‘As someone who treats medicare patients with injectable drugs, i can tell you that this is false.’
Well, I’m sure you’re right - the article may have confused average price with wholesale price. But the key point is that it is not based on what hospitals actually paid.
Posted 11 Dec 2007 at 10:47 am ¶No Marc, the “key point” is that CMS (using whatever calculation) has imposed a rule that will cause lots of patients (including many who are not on Medicare) to DIE.
Posted 11 Dec 2007 at 11:02 am ¶Where is your source that they ’screwed up the calculation’? And given that drug companies will still be getting lots for their drugs it is not likely that anyone will go without - and it isn’t “lots of patients” - these drugs are third line treatments.
Posted 11 Dec 2007 at 11:33 am ¶Read the article, Marc. The answer to both questions can be found there.
Posted 11 Dec 2007 at 11:40 am ¶So, you’d be prepared to go to the grave on the word of a pharma rep?
Posted 11 Dec 2007 at 12:12 pm ¶His comments confirm my own experiences dealing with CMS apparatchiks. The often screw up their statistcal analyses, and when you call their attention to it, they ignore you.
And it isn’t me that will be going to the grave. It will be those cancer patients.
Posted 11 Dec 2007 at 12:54 pm ¶NPR just did a story about Medicare pricing with regard to drugs.
http://www.npr.org/templates/story/story.php?storyId=17158948
Posted 12 Dec 2007 at 12:05 pm ¶Post a Comment