New Medicare Rules May Curb Use of Anemia Drugs for Dialysis

[Zach]

http://prescriptions.blogs.nytimes.com/2010/07/26/new-medicare-rules-may-curb-use-of-anemia-drugs-for-dialysis/?ref=health

New York Times
JULY 26, 2010, 7:09 PM
New Medicare Rules May Curb Use of Anemia Drugs for Dialysis

By ANDREW POLLACK
Yet more restrictions in the use of anemia drugs are on the way.

Medicare issued final rules Monday that are expected to sharply curtail the use of anemia drugs, particularly Amgen’s Epogen, in the treatment of patients undergoing kidney dialysis.

However, after getting lots of protest, Medicare decided to exempt certain oral drugs from the new system until 2014, which could be good news for Genzyme.

Under the new system, the Centers for Medicare and Medicaid Services will pay a set fee for each dialysis treatment. That so-called bundled payment is supposed to cover both the dialysis service, in which wastes are removed from the body, and the drugs and laboratory tests that accompany it. The new system starts phasing in on Jan. 1.

The new system somewhat resembles concepts in the new health care law, but the dialysis system reform was initiated earlier by Congress, under different legislation.

Until now, Medicare has paid a set fee for the service but certain drugs, like Epogen, are reimbursed separately.

Critics say that gave hospitals and dialysis clinics financial incentives to use a lot of Epogen, which dominates the dialysis market because of Amgen’s patent position. Amgen sells about $2.5 billion of Epogen a year, virtually all for use in dialysis in the United States, and the drug is one of the biggest pharmaceutical expenses for Medicare.

Concern about this system grew stronger when some clinical trials revealed that overuse of Epogen might harm patients, increasing their risk of heart attacks and strokes.

“When drugs remain outside the payment bundle, financial issues can influence both facility and patient behavior, as the over-utilization of EPO to the detriment of patient care in the past has demonstrated,’’ Medicare said in its ruling Monday.

Of course, the new system could have the opposite effect. Epogen will go from being a potential profit source for dialysis clinics to an expense that detracts from profit. So now there will be an incentive to under-use the drug, perhaps subjecting dialysis patients to more anemia and fatigue.

But clinics will have to meet certain standards for quality of care, which Medicare hopes will deter under-use. Medicare said it expects less costly alternatives might be used.

One approach would be to give Epogen by separate injections under the skin. Less of the drug is needed that way than when it is given through the intravenous line now used to deliver dialysis.

When they had a financial incentive to use more Epogen, dialysis clinics resisted giving such separate injections, saying they added to the pain and discomfort for patients. Now, however, many clinics are expected to switch.

Analysts have been expecting the final rules since Medicare first proposed the changes last year, and they have by and large already factored in a reduction in sales of Epogen of as much as 40 percent.

In a note to clients Monday afternoon, however, Jim Birchenough, an analyst at Barclays Capital, said such estimates might be too high and that the transition to giving patients separate injections will occur gradually.

The big suspense in the final rules would be whether Medicare would stick with its original proposal to include certain oral drugs, like Amgen’s Sensipar and Genzyme’s Renvela, in the bundle. These drugs are used to control calcium and phosphorus levels in the patient’s blood.

Opponents of inclusion of the oral drugs argued Medicare had no right to do so, because the drugs typically are not given at the dialysis clinic. Like most other pills, patients get a prescription and Medicare pays for the drugs under its prescription coverage, known as Part D, not under its dialysis program.

The opponents also said that because the drugs were expensive, inclusion in the bundle would curtail their use, to the detriment of patients.

In the final rules issued Monday, Medicare defended its position to include the drugs, but postponed the starting date by three years, until Jan. 1, 2014, to allow time for the study of “operational and safety issues.’’

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Copyright 2010 The New York Times Company

[Jean]

Oh Goody!!!!! More good news!!!!! Necessary to know tho, so thanks Zach.

[paul.karen]

Luckily President Obama promised there would be NO RASHONING.
So we are ok

[Bub]

  I just got off insulin and now more needles.

[Sunny]

I do EPO injections as needed.
It's not that big a deal. One trick I've learned is to make sure the drug is at room temperature prior to injection so it doesn't sting and inject it into a fatty spot. I use my upper thigh.Don't inject it into your arm. We have enough to contend with regarding our arms!Plus it is a short skinny needle and only needs to get through the upper epidermis layer of the skin.

[okarol]

Medicare issues dialysis payment rule
By Michael Fraase
Tuesday, 27 July 2010 07:07PM CST
Section: ESRD

DialysisThe US Centers for Medicare & Medicaid Services (CMS; Medicare) has issued its long-awaited final rule for dialysis patients. Entitled “Medicare Program; End-Stage Renal Disease Prospective Payment System,” (.pdf; 1.3MB http://www.cms.gov/ESRDPayment/PAY/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=4&sortOrder=descending&itemID=CMS1237726&intNumPerPage=10 ) the final rule contains the “bundling” arrangement for dialysis services which becomes effective 1 January 2011. (Here’s the much easier to digest CMS fact sheet. http://www.cms.gov/apps/media/press/factsheet.asp?Counter=3800&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date ) Under the new rule, Medicare will pay a single, predetermined fee for each dialysis treatment, covering the entire “bundle” of services (dialysis, supplies, drugs, and lab tests). As a result, the use of intravenous drugs to treat anemia—notably Amgen’s Epogen—will likely be sharply reduced.

Previously, Medicare paid a predetermined fee for dialysis services, but some drugs—like Epogen—were reimbursed separately. That system gave dialysis providers a financial incentive to overuse Epogen which increased the patients’ risk of heart attacks and strokes. Because Epogen is now part of the “bundle,” it will likely be underused and patients’ quality of life will suffer. While Medicare has set up adequate standards for quality of care—including maintaining patients’ hemoglobin levels between 10-12—it remains to be seen how these standards will be enforced. When my hemoglobin falls below 11.3, I’m wiped out; when it’s below 10, I’m virtually immobile and barely conscious.

Cheryl Clark, writing for HealthLeaders Media, cites CMS as saying, “the law requires CMS to reduce the payment rates to a dialysis facility by up to two percent if that facility fails to meet or exceed the established performance scores with regard to performance standards established for each quality measure.”

Epogen is incredibly expensive because Amgen has had a US monopoly on erythropoietin since 1989. Amgen’s original patent expired in 2004, but because of the broken intellectual property laws in the US, Amgen received a total of seven patents on the same work, some of which won’t expire until 2015.

A 2,000-unit vial of the drug currently costs US$49.99 from a veterinarian supply house; my current dosage is 18,000 units each dialysis run or about US$900 per week, retail. Dialysis providers pay Amgen’s Wholesaler Acquisition Price (WAP). According to the third amended complaint in US v. DaVita, Inc. (.pdf; 156KB), Amgen’s WAP was “calculated based on a 20% reduction from the Average Wholesale Price (AWP). ... The total possible discounts totaled 14.5% off the listed WAP, which itself was heavily discounted off the AWP.”

Under the current Medicare reimbursement plan, dialysis providers were able to make a profit on the spread between the Epogen they purchased at less than wholesale and the Medicare reimbursement rate. Forbes reported in April 2007 that “Medicare also reimburses at 6% above the average sales price of the drug. A Morgan Stanley report estimated that dialysis chains made 25% of their profits on the Epogen spread. Last year 21% of DaVita’s revenue came from reimbursements for Epogen.”

Because of the Epogen expense, dialysis providers may begin to administer it by separate injection (less is needed when the drug is injected directly); something the providers rejected when the drug was reimbursed separately. Some oral drugs—most notably Amgen’s Sensipar and Genzyme’s Renvela—won’t be included in the bundle until 1 January 2014. These drugs, while crucial to the health of dialysis patients, aren’t typically taken during the dialysis treatment.

The Medicare dialysis payment rule sets a base “bundled” payment rate of US$229.63 per treatment.

Medicare’s Quality Incentive Program (QIP), which takes effect 1 January 2012, ties a dialysis provider’s payment to how well it meets Medicare’s performance standards. “For the first time in any of our payment systems, the quality of care facilities furnish to patients will be reflected in their payment rates,” said Donald Berwick, Medicare’s newly-appointed administrator, in a statement. Quality measures included in the QIP include urea reduction ratios (a measure of dialysis adequacy) and the previously mentioned anemia levels. The QIP also mandates that dialysis providers’ facility performance scores be made publicly available.

http://www.farces.com/index.php/hasten/more/medicare_issues_dialysis_payment_rule