Hearing Description:
The Health subcommittee recently met to examine the current issues with Medicare Part B. The consensus among the witnesses was one of the main problems beneficiaries are facing under Part B is where they are receiving treatment. There has been a shift from patients receiving cancer treatment in physician’s offices to hospital outpatient settings. This situation ends up costing Medicare and beneficiaries more money.
Hearing Date: June 28th, 2013
Hearing Summary: Prepared for AAPS by the Market Institute
The Health subcommittee recently met to examine Medicare Part B’s drug benefits and to assess how well it is actually helping seniors and providers. In his opening statement, Chairman Joe Pitts (R-Penn.) said that while good progress has been made in Part B’s benefit design, there is still many issues needing resolution. Most notably, the site at which patients receive drugs has a direct correlation to how much they end up paying out of pocket and how much Medicare has to reimburse providers. Making sure patients are receiving drugs where they should be would be an important step in cost-savings.
Rep. Michael Burgess (R-TX) said in his opening statement that federal regulations are still standing in the way of care and “common sense” treatment. He cited kidney transplant patients specifically. After Medicare covers the operation and the following 36 months of treatment, the program will no longer cover the immuno-suppressant drugs needed to keep the patient’s body accepting the transplant.There is current legislation on the table to resolve this policy and continue coverage past 36 months.
The first witness, Cliff Binder, Health Care Financing Analyst at Congressional Research service testified in his opening statement that the total expenditure for prescription drugs under Part B in 2010 was $19 billion, roughly ¼ of the total expenditures on drugs under Medicare. The most expensive drugs covered under Part B were cancer drugs and treatments. There is concern that Part B reimbursement to providers is not adequate enough leading to a snowball effect of drug shortages and not having the capital to purchase drugs.
The second witness, Dr. Barry Brooks on behalf of the US Oncology Network testified in his opening statement that most prescriptions under Medicare Part B are cancer drugs. The ASP-based system for reimbursement allows for stable spending and pricing, but there is a current lag (4-6 months) in sales data used for reimbursement that could be addressed in legislation. There has been a shift in cancer chemotherapy treatment from community based clinics to hospital outpatient departments. This has resulted in higher costs for Medicare beneficiaries. Part B would benefit from placing a reasonable cap on beneficiary out of pocket spending.
The third witness, Nancy Davenport-Ennis, CEO of the National Patient Advocate Foundation testified in her opening statement that reductions in Medicare reimbursements has made it difficult for providers to adequately service patients. There is a shift happening that sees patients being treated at community practices to hospital outpatient settings. This shift is leading to higher costs for seniors needing cancer treatment. Also affecting beneficiaries is the proximity of Medicare Part B eligible cancer treatment centers. There have been reports that patients are traveling as many as 300 miles to receive treatment.
The fourth witness, Dr. Larry Melton, Medical Director of Kidney/Pancreas Transportation at Baylor Medical Center testified in his opening statement that the 36 month post-transplant coverage restriction is the most flawed Medicare policy. There is no limit for patients being treated with dialysis, but those who have undergone transplants have their coverage capped. Cost savings, aside from common sense patient care, is an important aspect of this inequity. Medicare stands to save money by extending coverage for immuno-suppressive drugs beyond the current 3 years.
The last witness, James Cosgrove, Director at the Government Accountability Office testified in his opening statement that relatively few drugs comprised the majority of expenditures for Medicare Part B. Most of the drugs are not available in generic form and only available from a single manufacturer. The most abundant drug used under Medicare Part B was the influenza vaccine, but it is also the cheapest. Of 35 of the 55 most popular prescription drugs, Medicare was the largest spender.
In response to questioning, Dr. Barry Brooks said:
- Under the administration’s proposed revised payment of ASP (Average Sales Price) + 3%, they could not take Medicare patients while sustaining their practices
- CMS’s cost is higher when patients utilize outpatient settings instead of physician practices
- The 6 month lag in determining ASP has led to manufacturers raising prices every year
In response to questioning, James Cosgrove said:
- In a few cases, Medicare represented 90% of the total purchases of a drug
- Incentives are important for providers to assure they do the right thing in terms of costs
In response to questioning, Nancy Davenport-Ennis said:
- New drugs hold promise of independent living for patients with cancer or other chronic diseases; Regulatory hurdles should not hold back these new drugs.
In response to questioning, Dr. Larry Melton said:
- Federal regulations ending drug coverage after 36 months following a kidney transplant needs to be examined again
Hearing Website:
http://energycommerce.house.gov/hearing/examining-reforms-improve-medicare-part-b-drug-program-seniors
Testimony:
Barry Brooks, M.D.
Partner
Texas Oncology
On behalf of:
The US Oncology Network
Larry B. Melton, M.D., Ph.D., FACP
Medical Director, Kidney/Pancreas Transplantation
Baylor Medical Center
Nancy Davenport-Ennis
CEO and President
National Patient Advocate Foundation
Cliff Binder
Health Care Financing Analyst
Congressional Research Service
James Cosgrove
Director
Government Accountability Office
