Medicare reimbursement policy is hindering patient access to IVIG (intravenous immunoglobulin), patient advocates charge, and at least one has found a bit of solace in a recently released government analysis that pointed to multiple reasons.
"It certainly does show that there's been an access problem," said Marcia Boyle, chairwoman and president of the Immune Deficiency Foundation. "There's a large number of physicians who haven't been able to purchase IVIG, so that's confirmed what we were seeing."
Among the causes, the Office of Inspector General (OIG) report determined that manufacturers' increased IVIG prices early last year were not reflected in reimbursement until midyear. That meant that providers - physicians and hospitals - initially were charged more for IVIG without a corresponding increase in payment. There is a two-quarter lag under the average sales price plus 6 percent (ASP-plus-6) reimbursement methodology, which went into effect at the beginning of 2005 for physicians and a year later for hospitals, between the time manufacturers report ASPs to the Centers for Medicare & Medicaid Services (CMS) and those prices become the basis for Medicare payment.
By the third quarter of last year, a little more than half of IVIG sales to physicians and hospitals were at prices below Medicare payment amounts, reflecting that catch-up period. Specifically, 59 percent of sales to physicians and 56 percent of sales to hospitals by the three largest distributors were priced below Medicare's payments. That signaled "a dramatic shift" from the previous three quarters, the OIG report said, in which the percentage of IVIG sold at prices below the Medicare payment amounts was as low as 4 percent for physicians and 23 percent for hospitals.
OIG Conclusion Flawed?
The report concluded that the situation is improving, but that conclusion is flawed, Boyle told BioWorld Today. She pointed out that 41 percent of sales to physicians and 44 percent of sales to hospitals are at prices higher than Medicare reimburses. "If this is the best-case scenario," she said, "we still have a very large number of physicians and hospitals that still are losing money on the purchase of each gram of IVIG."
Further, the next price increase would presumably cause more physicians and hospitals to again be charged more for IVIG than they're reimbursed before the lagging payment increase catches up. "From what I've heard," Boyle said, "most companies raise their prices at the beginning of the year."
In short, she said she disagrees with the OIG report's assumption that the situation is getting better.
The report also pointed to other factors that limit access, including the cyclical nature of producing IVIG, a plasma-derived protein therapeutic dependent on the volume of blood collection, preferential distribution to group purchasing organizations and off-label use, all of which lead to tight supplies in heavy periods of demand. Importantly for some advocating change to reimbursement policy, the report also said coding "may drive" difficulties with IVIG pricing and availability, so it's worth noting that soon after the OIG issued its analysis, CMS established separate codes for the different liquid IVIG products.
Previously, ASP-plus-6, reimbursements were calculated by using manufacturers' average wholesale price (AWP). The change, which came about to prevent overpayments for drugs covered under Part B of Medicare, was part of the Medicare Modernization Act.
Congress requested the OIG report to determine the impact of that change on IVIG treatment.
Five manufacturers produce 10 IVIG products, four of which are liquid formulations that are more convenient than the six lyophilized versions, but also cost a bit more. Each "are different products with different characteristics," explained Bruce Bunyan, vice president of corporate communications and public policy for Talecris Biotherapeutics Inc., which makes a liquid IVIG product called Gamunex.
As a result, they're all priced differently, so higher-priced IVIG products leave providers "underwater," he told BioWorld Today, meaning they're reimbursed at a rate lower than their acquisition cost.
Bunyan and others had argued that having a single J code to essentially set a flat rate for the multiple IVIG products marketed in the U.S. - multisource drug coding - hindered access. So lobbying for separate codes on each of the products paid off, which Bunyan said "would ensure that at least providers would be able to remain whole on any particular product they reach for," allowing them to make clinical decisions "based on the best therapy for that particular patient."
The FDA has approved IVIG to treat several conditions, including primary immune deficiency disease (PIDD), a group of disorders in which the immune system fails to produce enough antibodies, leaving patients at increased risk of infection. Additional indications are acute and chronic idiopathic thrombocytopenia purpura, B-cell chronic lymphocytic leukemia, Kawasaki syndrome, pediatric human immunodeficiency virus and bone marrow transplantation. In addition, off-label use for conditions such as multiple sclerosis, rheumatoid arthritis, peripheral neuropathies and infections in low-birth-weight newborns is on the rise, supported by growing medical evidence.
PIDD patients average about 30g of IVIG per infusion, and about 12 infusions per year. According to a physician survey done last fall for the Immune Deficiency Foundation, the ASP-plus-6 system paid $50.53 per gram of lyophilized IVIG, though physicians were paying on average $60.65 per gram in the same timeframe. Correspondingly, the ASP-plus-6 reimbursement for the liquid product was $60.65, but physicians were paying $67.47.
There's certainly fear that type of payment crunch could extend beyond Medicare patients and creep into coverage for patients with private insurance.
"Where Medicare goes, private pay goes," Boyle said. "We're getting a lot more calls from people with private insurance that they're under a microscope."
More Than Coding Changes Needed
In addition to the efforts of Research Triangle Park, N.C.-based Talecris and other manufacturers, patient advocacy groups like the Immune Deficiency Foundation have been dialing up the dialogue in an attempt to improve IVIG access. The foundation placed a full-page ad in a political publication before the OIG report came out, seeking to gain attention on Capitol Hill on behalf of the quarter-million American PIDD patients who in most cases require IVIG treatment.
Between 15 percent and 20 percent of them are covered by Medicare, which equals about 10,000 patients, Boyle said. Those who use IVIG "are on these products for life," she added.
But many of the Medicare patients are no longer being treated in their doctors' offices, according to a survey cited in the ad, and shifting IVIG treatments more to hospitals isn't optimal because of patients' increased exposure to diseases in those settings. Further, many of them are spacing out the intervals between treatments or postponing them altogether. Infusions of IVIG replace missing antibodies in PIDD patients, but without it, they're more susceptible to an array of infections and illnesses such as pneumonia and bronchitis, and at increased risk of death.
"We understand why the ASP-plus-6 formula was developed in the first place," she said, "but the pendulum on this may have gone a little bit too far, [creating an] unintended consequence."
Boyle praised CMS' decision to provide separate codes for the liquid IVIG products, noting that it would greatly benefit access issues in larger hospitals that contract with group purchasing organizations, but she's also advocating a further step: a so-called furnishing fee, which amounts to an add-on to product reimbursement to make up for the total cost of providing IVIG. In addition to obtaining the product, there are expenses for storing and preparing it, as well as delivery-associated costs like hooking up intravenous lines and monitoring patients on average for three hours.
There is precedent for such a system, Boyle said, noting that reimbursement for hemophiliacs' blood product treatments is based on an ASP-plus-20 calculation to prevent those providers from going underwater.
"Under the AWP, I don't think the true costs of administration were ever really known because enough money was made on the purchase of the product," she said. But with the new formula, "there's no sense of what the real administration costs should be, and we're hearing from physicians that they're certainly not making it up on the administration side to cover the loss on the product."
Along those lines, CMS does provide physicians and hospitals a $70 daily payment per infusion for services related to pre-administration, but it's done on a per-gram basis, and it's only temporary. Boyle expressed worry about rumors that it could be eliminated "before they've determined whether they've fixed the situation of access."
Congress is being petitioned to establish a permanent furnishing fee, given the necessity to change the Medicare Modernization Act, but she said no firm figure has yet been determined. The Immune Deficiency Foundation is asking the Department of Health and Human Services for a study to pinpoint a final number.
Lawmakers also are being asked to revisit what Boyle called "an empty provision" for home IVIG infusions for PIDD patients, because it excludes reimbursements for durable medical equipment and nurses. And as another recently released report showed, home health care companies generally do not accept new PIDD patients with only Medicare coverage because providers can't acquire IVIG at prices at or below Medicare reimbursement and aren't reimbursed for the infusion service.
Prepared for the Department of Health and Human Services, the analysis underscored the difficulties facing patients who require home infusion and also seconded many of the OIG report's conclusions.
"All the reports are showing that the reimbursement is significantly under what it's costing a large number of physicians and hospitals to purchase the product," Boyle said. "Therefore, our patients are having a hard time getting access, and that needs to be fixed."