[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
EXAMINING REFORMS TO IMPROVE THE
MEDICARE PART B DRUG PROGRAM FOR SENIORS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JUNE 28, 2013
__________
Serial No. 113-64
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee JIM MATHESON, Utah
PHIL GINGREY, Georgia GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey JOHN BARROW, Georgia
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
H. MORGAN GRIFFITH, Virginia KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 2
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 4
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 6
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 7
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 83
Hon. Mike Rogers, a Representative in Congress from the State of
Michigan, prepared statement................................... 83
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 84
Witnesses
Cliff Binder, Health Care Financing Analyst, Congressional
Research Service............................................... 9
Prepared statement........................................... 12
Barry Brooks, M.D., Partner, Texas Oncology, on Behalf of the
U.S. Oncology Network.......................................... 21
Prepared statement........................................... 23
Answers to submitted questions............................... 107
Nancy Davenport-Ennis, CEO and President, National Patient
Advocate Foundation............................................ 37
Prepared statement........................................... 39
Answers to submitted questions............................... 111
Larry B. Melton, M.D., Ph.D., FACP, Medical Director, Kidney/
Pancreas Transplantation, Baylor Medical Center................ 45
Prepared statement........................................... 47
James Cosgrove, Director, Government Accountability Office....... 50
Prepared statement........................................... 52
Submitted Material
Materials submitted by Mr. Burgess
Article entitled, ``Penny Wise, Pound Foolish? Coverage
Limits on Imunosuppression after Kidney Transplantation,''
New England Journal of Medicine, 10.156/NEJMp1114394....... 85
Statement of the National Kidney Foundation.................. 89
Statement of the American Society of Nephrology.............. 91
Letter of March 25, 2013, from the American Society of
Transplant Surgeons to Hon. Michael C. Burgess and Hon. Ron
Kind....................................................... 93
H.R. 460, submitted by Mrs. Capps................................ 95
Statement of the California Healthcare Institute, submitted by
Mr. Pitts...................................................... 100
Statement of the American Society of Clinical Oncology, submitted
by Mr. Pitts................................................... 102
Statement of the American College of Rheumatology, submitted by
Mrs. Ellmers................................................... 105
EXAMINING REFORMS TO IMPROVE THE MEDICARE PART B DRUG PROGRAM FOR
SENIORS
----------
FRIDAY, JUNE 28, 2013
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts
(chairman of the subcommittee) presiding.
Present: Representatives Pitts, Burgess, Whitfield, Lance,
Cassidy, Griffith, Bilirakis, Ellmers, Engel, Capps, Green,
Barrow, Caster, and Waxman (ex officio).
Staff Present: Clay Alspach, Chief Counsel, Health; Gary
Andres, Staff Director; Sean Bonyun, Communications Director;
Matt Bravo, Professional Staff Member; Julie Goon, Health
Policy Advisor; Sydne Harwick, Legislative Clerk; Robert Horne,
Professional Staff Member, Health; Carly McWilliams,
Professional Staff Member, Health; Monica Popp, Professional
Staff Member, Health; Andrew Powaleny, Deputy Press Secretary;
Heidi Stirrup, Health Policy Coordinator; Brian Cohen, Staff
Director, Oversight and Investigations, Minority Senior Policy
Advisor; Alli Corr, Minority Policy Analyst; Elizabeth Letter,
Minority Assistant Press Secretary; Karen Lightfoot, Minority
Professional Staff Member; and Stephen Salisbury, Minority
Special Assistant.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. The time of 10:00 o'clock having arrived, the
subcommittee will come to order. The chair will recognize
himself for an opening statement.
Today's hearing is an opportunity for us to examine
Medicare's part B drug benefit and to assess how well it is
working for both seniors and providers. While most prescription
drugs are covered under Medicare part D, certain outpatient
prescription drugs and biologics are covered under part B.
Covered part B drugs are usually those administered in a
physician's office or hospital outpatient setting, including
injectable and infused drugs, drugs used in conjunction with
durable medical equipment, oral drugs for cancer or end stage
renal disease, and some self-administered drugs in the hospital
outpatient setting. As a result of the 2003 Medicare
Modernization Act, MMA, Medicare reimburses providers for the
cost of part B drugs and their administration at what is known
as the average sales price, ASP, plus 6 percent, with Medicare
paying 80 percent of that amount and beneficiaries paying the
remaining 20 percent. I would like to commend members on both
sides of the aisle for their work on the part B drug benefit.
And I will highlight a few pieces of legislation.
H.R. 800 by Congressmen Whitfield and Green, which seeks to
exclude prompt pay discounts from manufacturers to wholesalers
from the calculation of ASP; H.R. 1416 by Congresswoman
Ellmers, which would terminate application of sequestration to
certain physician-administered part B drugs; and H.R. 1428 by
Dr. Burgess and Representative Kind which seeks to provide
coverage for immunosuppressive drugs for kidney transplant
recipients.
And there are other issues as well. For example,
reimbursement rates have caused a shift of some patient
populations, such as those with primary immune deficiency
diseases and other rare diseases, from treatment in the
physician's office, treatment in the hospital outpatient
department, arguably the worst setting for someone with a
compromised immune system. We should also examine the variation
in reimbursement rates for the same drugs and services across
various settings to ensure that patients are being treated at
the most clinically appropriate and cost effective site. While
some drugs and biologics must be administered in the hospital
outpatient setting, it is also the most expensive site of care
for the Medicare program itself and for the beneficiary, who
pays a 20 percent copayment.
I would like to welcome our witnesses today. They represent
perspectives from the Federal Government, providers, and
patients. And I look forward to their testimony. Thank you.
I yield the remainder of my time to Dr. Burgess.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
The Subcommittee will come to order.
The Chair will recognize himself for an opening statement.
Today's hearing is an opportunity for us to examine
Medicare's Part B drug benefit and to assess how well it is
working for both seniors and providers.
While most prescription drugs are covered under Medicare
Part D, certain outpatient prescription drugs and biologics are
covered under Part B.
Covered Part B drugs are usually those administered in a
physician's office or hospital outpatient setting, including
injectable and infused drugs, drugs used in conjunction with
durable medical equipment, oral drugs for cancer or End-Stage
Renal Disease, and some self-administered drugs in the hospital
outpatient setting.
As a result of the 2003 Medicare Modernization Act (MMA),
Medicare reimburses providers for the cost of Part B drugs and
their administration at what is known as the Average Sales
Price (ASP), plus 6%, with Medicare paying 80% of that amount
and beneficiaries paying the remaining 20%.
I'd like to commend Members on both sides of the aisle for
their work on the Part B drug benefit, and I'll highlight a few
pieces of legislation:
H.R. 800, by Reps. Whitfield and Green, which
seeks to exclude prompt-pay discounts from manufacturers to
wholesalers from the calculation of ASP;
H.R. 1416, by Rep. Ellmers, which would terminate
application of sequestration to certain physician-administered
Part B drugs; and
H.R. 1428, by Dr. Burgess and Rep. Kind, which
seeks to provide coverage for immunosuppressive drugs for
kidney transplant recipients.
There are other issues, as well.
For example, reimbursement rates have caused the shift of
some patient populations, such as those with primary immune
deficiency diseases and other rare diseases, from treatment in
the physician office to treatment in the hospital outpatient
department - arguably the worst setting for someone with a
compromised immune system.
We should also examine the variation in reimbursement rates
for the same drugs and services across various settings, to
ensure that patients are being treated at the most clinically
appropriate and cost-effective site.
While some drugs and biologics must be administered in the
hospital outpatient setting, it is also the most expensive site
of care for the Medicare program itself, and for the
beneficiary, who pays a 20% copayment.
I'd like to welcome our witnesses today. They represent
perspectives from the federal government, providers, and
patients, and I look forward to their testimony.
Thank you, and I yield the remainder of my time to Rep. --
--------------------------------.
Mr. Burgess. I thank the chairman for the recognition.
So there is no question the part B drug coverage has
improved the lives of patients. But Federal regulations can
really stand in the way of compassionate patient care and
common sense. After the Medicare Modernization Act, now nearly
10 years ago, we saw dramatic consolidations in the oncology
space such that now the purchase and storage of drugs is
regarded as physician service for the purposes of
sequestration. Well, this ruling does not serve patients well.
In fact, it is contrary to the statute itself, I believe. It is
contrary certainly to any flexibility the agencies are supposed
to have. And it is contrary to basic math.
Mr. Chairman, thank you for working with myself and others
on both sides of the dais here to pursue answers from the
Centers for Medicare & Medicaid Services on this important
issue.
The math is also problematic and doesn't add up in how we
pay for patient care after kidney transplantation. Medicare
pays for 50,000 kidney transplants each year at a cost per
patient of well over $125,000. So do the math on that, and it
is over $60 billion a year. Kidney transplantation offered end
stage renal disease patients an alternative to a lifetime of
costly, time consuming, and sometimes painfully dialysis
treatment. However, the government's protection of its
investment arbitrarily ceases after 36 months, when Medicare
suddenly refuses to pay for the life-sustaining
immunosuppressant drug coverage needed to keep a transplanted
kidney alive and functioning. So oddly, it is Federal policy--
not the disease itself--that is the greatest threat to these
patients. So instead of ensuring the investment, the government
would rather lose patients or rather patients lose their graft,
lose their kidney, return to dialysis, and get back in line for
another transplant, taking another organ out of circulation for
someone else. Instead of protecting the transplant, we further
limited supply of donors' organs, and we burden the Federal
budget while jeopardizing patient lives.
I challenge every member on this committee to support the
bipartisan H.R. 1428 to correct this irrational and arbitrary
policy. Our patients are waiting. I think they have waited long
enough. It is time for us to put common sense in front of
arcane policy.
Thank you, Mr. Chairman. I yield back.
Mr. Pitts. The chair thanks the gentleman.
Now filling in for the ranking member of the subcommittee
Mr. Pallone, we have Mr. Green from Texas, who is recognized
for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Chairman Pitts, for holding this
important hearing. And thank you to the witnesses for taking
the time to be with us, particularly Dr. Brooks and Dr. Melton.
And we have so many Texans on here, you will hear we are from
the great State of Texas many times, although sometimes that is
redundant.
The part B drug program, which helps pay for chemotherapy
and other services, is an important piece of Medicare. I have
had a long interest in preserving seniors' access to quality
care by ensuring Medicare pay at a rate that will retain a
robust network of providers. This is what we are trying to do
with the SGR reform. And I think part B rates are part of this
larger discussion.
Today we are discussing at least three bills. The first, a
bipartisan bill offered by my colleague from Texas Dr. Burgess,
will provide Medicare coverage for immunosuppressive drugs for
kidney transplant recipients. This bill has earned support from
both sides of this committee. And it is my hope we can act on
it and move to the full House for a vote.
The next bill offered by Mrs. Ellmers has earned support
from both sides of this committee. Also it is imperative that
we examine the impact of sequestration on cancer patients. And
I am pleased this bill has been introduced because it
highlights the shortcomings of using sequestration as a tool to
accomplish our much needed goal of balancing the Federal
budget. I am proud to lead the letter to CMS with my colleague
from Texas, Congressman Pete Sessions, that was signed by 124
Members of Congress expressing concerns that cuts resulting
from sequestration to critical cancer medications are forcing
oncologists to turn cancer patients away. We asked CMS to do
something about this problem with their existing authority but
haven't gotten the answer we wanted. I should point out that I
do not believe Mrs. Ellmers' bill goes far enough as part of
the discussion around restoring the reimbursement rates. It
must also be restoring funding for after-school lunches,
medical research, education funding, Corps of Engineers, and
other critical funding.
Finally, H.R. 800 is also known as the prompt pay bill that
is being discussed today. I am proud to have introduced this
bill in past sessions of Congress. I am pleased my colleague
and friend Chairman Whitfield decided to introduce it most
recently. We have worked together over the years to move this
issue forward. The bill simply excludes the prompt pay
discounts offered by manufacturers to wholesalers for the
average sales price for drugs and biologics covered under
Medicare part B. This became an issue when the Medicare
Modernization Act was enacted. It reduces the amount doctors
are reimbursed, sometimes below the amount they actually pay
for administering cancer treatment and the result is fewer
doctors participating in Medicare. Reducing the number of
options for cancer patients reduces access, and that is just
bad policy.
While some of my colleagues have pointed out that
sequestration has also done this--and they are right--this is a
separate issue. The prompt pay discount has negatively affected
cancer patients for many years before sequestration. Whether we
adopt legislation, repealing it, replacing it or otherwise
altering sequestration, without adopting H.R. 800, the
underlying issue will still exist. H.R. 800 is noncontroversial
and has been supported by virtually every member of this
committee. In fact it was adopted by this committee during the
consideration of the Affordable Care Act by a voice vote, only
to be unfortunately left out in the bicameral negotiations. The
prompt pay bill deserves this committee's support. And I ask
that Chairman Pitts move forward by marking up this legislation
in the near future. Moving this bill or including it in a
larger package makes sense.
And now, Mr. Chairman, I would like to yield my remaining
time to my colleague, Congressman Engel.
Mr. Engel. Thank you. Thank you very much. I appreciate it.
As Wednesday's hearing highlighted, the current Medicare
benefit structure is very complicated. It is particularly true
with the drug benefit, where some drugs are covered if infused
by an infusion pump under the part B benefit while others are
covered under the part D benefit. Unfortunately, the part D
benefit does not cover the supplies, equipment, and
professional services necessary to deliver infusion drugs
safely in the house. The nursing component for infusion therapy
can only be performed under part A through a certified home
health agency if the patient meets the definition of
``homebound.'' As a result of this fractured benefit, many
beneficiaries that could safely receive treatment at home are
relegated to being served in a skilled nursing facility or
hospital which adds unnecessary costs to the health care system
and exposes patients to hospital-acquired infections.
Unfortunately, Medicare stands virtually alone in denying
coverage for home infusion even though the private sector has
proven for decades that infusion in the home can be cost
effective as well as done in a setting that best meets the
patient's wishes. While Medicaid covers the drugs used in home
infusion therapy and while that payment is important, we cannot
continue to look only at the silo of drug payment without also
looking at the need for full coverage of the associated
equipment, supplies, and services for infusion therapy provided
in the home or other alternate site settings. In the past, I
have included legislation to make sure that the least costly
clinically appropriate environment for infusion services is
covered rather than forcing individuals to obtain these
services in the hospital or nursing homes. And it is my hope
that the committee and Congress work with me in that effort.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
We are voting on the floor. We have 11 minutes left. We
will try to finish the opening statements of members at this
time.
The chair yields to Mr. Whitfield for 5 minutes.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. Well, Chairman Pitts, thanks very much. And
I really appreciate the witnesses being with us today as we
discuss these important topics. I certainly want to thank Gene
Green and others who have been involved in our efforts to
resolve the so-called prompt pay issue. As many of you know,
manufacturers give discounts to distributors that help offset
costs of shipping, handling, and reflects the time value of
money and risk incurred in the distribution process. But when
Medicare calculates how much a physician will be reimbursed for
drugs under the part B program, it includes them in the sales
price. And doing this artificially reduces the reimbursement to
the physician, the oncologist, which places even more stress on
these practices. In cancer, for instance, we know that four out
of five patients that are treated are treated outside of a
hospital, within a physician's practice. And over the past few
years, there has been a trend of closings and consolidation of
these practices. And any time I meet with an oncologist today--
it makes no difference where they are from--they all cite
reimbursement as one of the primary reasons for this
consolidation and closing. But it is ultimately the patient
that suffers the consequence of this problem, as clinics close
or consolidate, access to care for the treatment of cancer is
diminished, and patients are shifted into the hospital which we
all know is the most expensive type of treatment. So I hope
that as we work on this physician payment reform that we also
take a serious look and solve the so-called prompt pay issue.
So I look forward to working with you, Mr. Chairman, and
others as we try to resolve this very serious problem. And at
this time, I would like to yield whatever time she may consume
to Mrs. Ellmers of North Carolina.
Mrs. Ellmers. Thank you to my colleague and thank you, Mr.
Chairman, for holding this subcommittee hearing on these very
important pieces of legislation. I have sponsored H.R. 1416,
which is the Cancer Patient Protection Act. This benefit to our
seniors, our Medicare recipients, is essential. We all know
sequester went into effect. We needed those funding cuts at the
Federal level. However, I believe wholeheartedly that as an
unintended consequence of this, we have now harmed one of our
most vulnerable populations, Medicare patients who have now
received the diagnosis of cancer. You know we have wonderful
cancer treatment centers in our communities. And I would like
to point out also that it isn't just about cancer patients. It
is also about patients with rheumatoid arthritis, osteoporosis,
lupus, any autoimmune disease that medication has to be given
under the direction of a physician.
We have to restore this sequester cut because it is the
drugs that have been cut. And these drugs are very, very
expensive. The physicians have received their 2 percent cut in
reimbursement. But we have to restore that drug cut because we
will not be able to continue to provide that benefit to them
within their communities.
I can't imagine a family in crisis finding out about cancer
to their loved one and then knowing that they are going to have
to travel 20 miles outside of their community to go to a
hospital. Many of these individuals are on fixed incomes. They
are low income. They will not have the ability to be
transported to those facilities where the cost actually
increases which, as we all know, defeats the purpose of the
sequester to begin with.
So I feel very strongly we need to pass this piece of
legislation. We have a bipartisan list of cosponsors. I am very
proud of that. And we will continue in this effort, again, to
protect those seniors in this way. It is very important.
And I yield back the remainder of my time.
Mr. Pitts. The chair thanks the gentlelady.
We have a little over 6 minutes left. At this time, the
chair recognizes the ranking member of the full committee, Mr.
Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman. I want to thank our
witnesses for coming here today. And I want to thank you for
holding this hearing. It is our first time in quite a while
that we have looked at the Medicare part B drugs. And this is a
worthwhile focus because we spend, according to the GAO, almost
$20 billion for these drugs each year, including some of the
most expensive drugs on the market. We should be looking
carefully at where the money goes.
We will be hearing about several pieces of legislation. We
have already heard about them. And I know for several years
oncologists and other providers have raised concerns about
whether payments under the part B program are adequate. Their
focus has been on legislation that would increase the Medicare
average sales price and part B reimbursements by excluding
prompt pay discounts. The Obama administration has a different
view. Its budget proposes cuts in reimbursement rates. And I
hope our witnesses can give us some insight on both the
adequacy of part B drug reimbursement rates and whether there
are opportunities to save money for taxpayers by modifying
these rates.
We have already heard a little bit about Congresswoman
Ellmers' bill. It would exempt part B drug reimbursement from
the effects of the sequester. As part of the broad sequestered
Medicare payments, part B drug reimbursement rates were reduced
by 2 percent. We are going to hear from other witnesses today
that will say that this cut will have a disproportionate impact
on administrative reimbursements. Cancer clinics have reported
that due to these payment cuts, they will have to turn patients
away. Well, that would be a terrible outcome. These drugs are
essential to cancer patients, and the arbitrary payment cuts
undermine patient health and the entire Medicare program. This
illustrates once again why an arbitrary and automatic sequester
is such a bad policy.
My concern with Mrs. Ellmers' bill is that it only
addresses one problem. We need a comprehensive and balanced
sequester fix, not a piecemeal fix that increases payments for
cancer drugs and ignores cuts to Head Start or Pell Grants or
physician reimbursements or vaccines for children or vital
defense programs. Sequestration was supposed to never happen.
It was supposed to be so ridiculous that we were to avoid it.
And now it is in place, and we ought to correct it.
Mr. Chairman, we shouldn't pretend the consequences of the
part B payment cuts are an isolated example. They highlight the
broader reality. When you take the hatchet to the Federal
budget, there are going to be serious consequences. This is not
an unintended, unforeseeable consequence. I also hope we can
learn about other ways to cut part B drug spending. As I said
earlier, part B drugs pay for $20 billion worth of drugs
annually, including many expensive biological and specialty
drugs. In some cases, these drugs can cost tens and even
hundreds of thousands of dollars per patient per year. The
Medicare program is the primary purchaser of these expensive
drugs. Drugs save lives. We need these drugs, and we need to
keep developing new ones. But we should also make sure that
Medicare is getting a good deal.
I supported legislation in the past that ends the pay for
delay abuses and brings generic biologics to market faster. My
legislation, requiring part D drug manufacturing rebates, would
save over $140 billion in the next decade, and we should be
looking to see if there are other ways, like negotiations or
rebates, that would help make sure taxpayers are getting their
money's worth on part B drugs.
Let me give an example: For those people who are on
Medicare and Medicaid, the dual eligibles, we used to pay for
their drugs under Medicaid and we got a rebate. When the
prescription drug part D bill was adopted, they said, let's
take them out of Medicaid and put them under Medicare. Suddenly
we are paying a higher rate for the same drugs, often for the
same people. The drug companies love it. But why should we be
spending that extra money when we can be using that for
worthwhile purposes by making sure that the cancer drugs and
the physicians who deal with those cancer drugs get adequately
reimbursed. It is very frustrating to see people wanting to
protect the drug companies' profits, wanting to protect every
special interest group until they find one that they are
sympathetic to. And we all are sympathetic to this issue
because it deals with the most vulnerable people who have
cancer.
I look forward to the hearing and am looking for some
solutions.
Mr. Pitts. The chairman thanks members. That concludes the
members' opening statements.
For information of the members, I am looking at the screen
here, we have 1 \1/2\ minutes left in the first vote but still
314 Members haven't voted. So we will have time to get over. We
have a series of votes. We will reconvene after the last vote,
which should be around 11:00. So at this point, the
subcommittee stands in recess.
[Recess.]
Mr. Pitts. The recess having expired, we will reconvene.
On our panel today, we have five witnesses. Mr. Cliff
Binder, Health Care Financing Analyst, Congressional Research
Service; Dr. Barry Brooks, Partner at Texas Oncology on behalf
of the U.S. Oncology Network; Ms. Nancy Davenport-Ennis,
President and CEO of the National Patient Advocate Foundation;
Dr. Larry Melton, Medical Director of Kidney/Pancreas
Transplantation from Baylor Medical Center; James Cosgrove,
Director of the Government Accountability Office.
Thank you for coming. Thank you for your patience as we
were interrupted by votes on the floor.
Your written testimony will be entered into the record. You
will each be given 5 minutes to summarize your testimony. And
so at this time the chair recognizes Mr. Binder for 5 minutes
for his opening statement.
STATEMENTS OF CLIFF BINDER, HEALTH CARE FINANCING ANALYST,
CONGRESSIONAL RESEARCH SERVICE; BARRY BROOKS, M.D., PARTNER,
TEXAS ONCOLOGY, ON BEHALF OF THE U.S. 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; AND
JAMES COSGROVE, DIRECTOR, GOVERNMENT ACCOUNTABILITY OFFICE
STATEMENT OF CLIFF BINDER
Mr. Binder. Chairman Pitts, Congressman Green, and
distinguished subcommittee members, I appreciate the
opportunity to be here today. My name is Cliff Binder. I am a
Health Care Financing Analyst at the Congressional Research
Service. I was asked to provide an overview----
Mr. Pitts. Pull the mic a little closer, if you could.
Mr. Binder. I was asked to provide an overview of Medicare
part B prescription drug payments. In 2010, Medicare spent
about $81 billion on most prescription drugs; and about a
quarter of these expenditures, $19 billion, were for part B
drugs. There are two broad principles that determine if a drug
is covered under part B. The drug is furnished incident to
physician services, and it is usually not self-administered.
Most part B drugs are administered to patients by injection or
infusion, but there are exceptions. Cancer drugs account for a
large portion of part B drug expenditures. Providers--mostly
physicians--but also hospital outpatient departments, clinics,
and durable medical clinic suppliers buy part B drugs, then
bill Medicare when they administer the drugs to patients.
Physicians and other providers receive two payments from
Medicare for part B drugs, one payment for administering the
drug and the second payment for purchasing and supplying the
drug. The Balanced Budget Act of 1997, BBA, set the payment
rate for Medicare part B drugs at 95 percent of the average
wholesale price, AWP. In spite of BBA changes, however,
Medicare drug payments increased rapidly between 1999 and 2003,
rising nearly 25 percent a year. In response to the part B drug
price escalation, Congress modified the payment methodology in
the Medicare Prescription Drug Modernization Act, MMA. MMA
changed part B reimbursement in two ways. It increased the
amount physicians received for part B drug administration and
it decreased the amount physicians were paid for supplying part
B drugs. Beginning in 2005, Medicare began paying for the
majority of part B drugs based on a formula of 106 percent of
the drug's average sales price, ASP. ASP includes most price
concessions, such as volume and prompt pay discounts and
rebates. When manufacturers factor price concessions into ASP
data, the effect is to lower a drug's ASP. Drug manufacturers
are required to submit data to CMS on ASP and the companion
price used mostly for Medicaid rebates average manufacturer
price, AMP. CMS sets the part B drug prices for each quarter
based on sales data submitted by drug manufacturers from two
previous quarters. If drug manufacturers raised prices in the
two quarters after they submitted their ASP data, providers
might be unable to purchase drugs below what Medicare pays.
When prices decline after manufacturers submitted their ASP
data, such as when generic products are introduced, providers
often are able to purchase these drugs for prices significantly
below Medicare's payment rate. Medicare part B drug payments
have increased at a slower pace since 2004, posting average
increases of less than 5 percent a year. MMA also required the
Inspector General to conduct drug price monitoring to determine
if ASP is more than 5 percent higher than AMP. If Medicare part
B drug payments exceed ASP by 5 percent or more, the Secretary
has authority to substitute a different payment methodology
that would reduce Medicare drug reimbursement. OIG has reported
that there was at least a 5 percent difference between ASP and
AMP for some part B drugs. There has been concern that part B
drug reimbursement may be inadequate for some providers.
Provider groups contend that discounts manufacturers give drug
wholesalers have the effect of reducing ASP, making it
difficult for these providers to cover the cost of purchasing
some drugs. In addition, some in Congress and other groups have
questioned whether drug shortages have been complicated by the
part B drug pricing methodology and whether these, along with
manufacturers' production problems, speculation, industry
consolidation, and other factors have contributed to drug
shortages, particularly for sterile injectable drugs, a part B
drug category. Moreover, questions have been raised whether the
two-quarter lag between the time when manufacturers report ASP
and the time when CMS releases Medicare part B drug prices make
it difficult for some providers to purchase drugs at
competitive prices. Most recently, some providers have raised
concerns that the effect of applying the mandatory Budget
Control Act of 2011, BCA, reductions to Medicare part B drug
reimbursement will further reduce payments to providers,
potentially reducing Medicare beneficiaries' access to
services.
In general, sequestration is the permanent cancelation of
budgetary resources by a uniform percentage, but certain
programs and activities are exempt from sequestration, and
special rules may be applied to programs such as Medicare.
Even though there are special Medicare rules that would
limit a reduction in program benefit spending to 4 percent, BCA
limits the Medicare program benefits reduction to 2 percent;
thus beginning April 1, 2013, Medicare payments for covered
services, including physician services and part B drug
payments, are subject to 2 percent reductions. According to
CMS, the 2 percent reduction applicable to Medicare only
applies to Medicare's provider payments. Beneficiary cost
sharing amounts and amounts paid by other health insurance are
not reduced.
This concludes my statement. I would be happy to answer
questions.
Mr. Pitts. The chair thanks the gentleman.
[The prepared statement of Binder follows:]
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Mr. Pitts. I now recognize Dr. Brooks for 5 minutes for an
opening statement.
STATEMENT OF BARRY BROOKS, M.D.
Dr. Brooks. Chairman Pitts, Congressman Green, members of
the committee, thank you for the opportunity to testify on
behalf of the U.S. Oncology Network and community oncology in
general on the Medicare part B drug program.
I am Barry Brooks. For 31 years, I have been taking care of
cancer patients. Being an oncologist is intellectually and
emotionally challenging, but I think it is the best job in the
world, and I love it. As a community oncologist, I feel I am
part of a dying breed. Our way of life and practice is being
squeezed out of existence. We are struggling to make ends meet
and continue to care for our beloved cancer patients in the
private practice setting. But the way red ink is spreading over
our ledgers, there won't be many of us left in a few years.
Instead, we will all be employed in arrangements we don't like
in institutions where doing the right thing requires executive
approval. But I am not here to complain about my job prospects.
I am here to talk about demographics and math.
Medicare covers over 60 percent of cancer patients and the
Medicare population is growing every day. And worse, the
expensive care these patients need are shifting from my low
cost realm into higher cost arenas. You all know the problem,
cancer care costs more in the hospital outpatient department.
And hospital-based care is growing by leaps and bounds. The
root of the problem has two parts. One, Medicare doesn't
adequately cover the cost of community oncology practice care;
and, two, Medicare payments and rules are tilted in favor of
the hospital. Since 2005, community oncologists have been
slowly bleeding to death. After MMA, Medicare pays us for
cancer patients an average sales price plus a 6 percent service
payment for the costs and risks associated with purchasing,
storing, mixing, administering, disposing these drugs. The 6
percent is the only Medicare payment for the significant work
to prepare chemotherapy for administration. And even if the
drugs are ready for infusion on arrival to our practice, paying
acquisition costs would not reflect the cost of inventory and
the systems needed to manage it.
Even prior to sequestration, Medicare drug reimbursement
did not cover our costs. Due to technical flaws in the ASP
formula plus six in theory does not equal plus six in reality.
Wholesaler prompt pay discounts reduce ASP values that are not
extended to our clinics. ASP values always take 6 to 8 months
to be reflected in our price. We cannot collect the entire
copay allowable and Medicare does not reimburse us for
uncollectible beneficiary coinsurance.
These issues are not new. As far back as 2007, MedPAC
reported the reimbursement for some drugs was below market
price. This means that we have to give away our services for
free or, worse, we have to pay for seniors' cancer drugs out of
our own pockets. Since April 1, we are living under ASP plus
4.3 percent. While controlling deficit spending is important,
the Administration's decision to apply the sequester both to
our 6 percent payment services part and to the entire drug
costs has effectively cut our services payment by 28 percent.
It forces us to subsidize Medicare patients or send them
elsewhere for care.
Oncologists around the country are making these difficult
decisions, and I respect each practice's choice. But one thing
is certain, operating at a loss on more than half your patients
is not a sustainable model. While tweaks to the Medicare
reimbursement rates would go a long way towards shoring up
community cancer care, variations in reimbursement for the same
services in different outpatient services tilt the competitive
landscape in favor of the hospital and encourage inefficiency.
One-third of U.S. hospitals purchase chemotherapy drugs through
the 340(b) program and enjoy margins of over 30 percent on
their Medicare cancer drugs. It is no wonder drug spending in
hospitals is increasing so rapidly and patients and oncologists
alike are migrating to these settings. Pushing patients with
expensive to treat conditions into more expensive settings to
get the same care and the same result makes as much sense as
adding a trap door to a canoe. The patients get lost in this
setting. The hospitals get lower drug costs. They get higher
reimbursements. The patients have to travel further. They have
to wait longer. They have to pay more out of pocket. This is
just not right, and it is not necessary.
I know I am preaching to the choir here. Members of this
committee have introduced and supported legislation like that
from Congressmen Green and Whitfield to help with prompt pay;
Congresswoman Ellmers' H.R. 1416; 30 members of the committee
have signed a letter questioning how the Administration handles
sequester cuts on Medicare part B for oncology; and others have
just signed a recent leadership letter to the so-called Lance-
Pascrell. We also want to thank Congressman Rogers and others
working with him to implement site-neutral payment, as
recommended recently by MedPAC. The world's best cancer care
delivery system is struggling to take care of our patients. We
and they need your help.
Thank you for letting me talk today.
Mr. Pitts. The chair thanks the gentleman.
[The prepared statement of Dr. Brooks follows:]
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Mr. Pitts. I now recognize Ms. Davenport-Ennis for 5
minutes for an opening statement.
STATEMENT OF NANCY DAVENPORT-ENNIS
Ms. Davenport-Ennis. Thank you, Chairman Pitts, and thank
you, Congressman Green, and thank you also, members of the
committee. I have submitted previously written testimony to the
committee. And so what I would like to do now is to simply have
a conversation with you and share with you what we see
happening to the Medicare patients in the United States that we
have been taking care of for the past 17 years.
To date, we have closed over 750,000 cases dealing with
Medicare and Medicaid patients in the United States. And what
we see is that since the passage of MMA, when we stripped away
the reimbursement between the drug margin and the services with
the commitment that there would be additional codes put in
place in 2004 to bring the reimbursement for physicians up to
where they had been so they can maintain their practices, we
have seen a waterfall of changes and reductions to
reimbursement to physicians. And why do our patients care? Why
is that our battle? It is our battle because the number one
asset we have in winning our individual war on cancer or any
other chronic disease is a physician who is there to treat us.
What I can say to you is that we look at the destabilization of
the workforce today as a result of things like a prompt pay
discount which loses a 2 percent or the imposition of
sequestration which is a 2 percent cost cut across both the
drug and the service. We look at the continued threat of ASP
reduction. So there is no stability when a practice is trying
to plan for the future. And the result to the patients that we
serve is really simple. They are now facing a reduction in
actual practices available in their community to see them. And
when we lose a practice in the community, not only does the
senior or the disabled lose it, so does every man, woman, and
child living in that community. We are seeing patients being
shifted to hospitals for site of care. It may mean longer
distances for them to travel. It may mean longer wait times for
them. We have had it documented that it means an additional
cost of $6,000 to the system for each patient that is shifted
to the hospital outpatient setting for care. And because the
patient is responsible for a 10 percent copayment, it means
$600 to $650 for the patient.
We have seen the formularies change within Medicare part B
and we have seen many of our newer drugs that our patients need
are now being put out on a specialty tier. And at that level
when we did an analysis of 996 of our Medicare patients, what
we found is that they were paying on average out of pocket for
specialty tier drugs through Medicare $684 per prescription
that represented 50.2 percent of the cost of the drug.
Let me describe to you the Medicare patients that we
handle. Traditionally, their household incomes are under
$23,000. They are very proud people, many of whom have worked
their entire lives to save and to live independently throughout
the final years of their lives. The seniors that we treat come
to their diagnosis and seek support through copay even though
for them to do that it is such a transgression against their
independent living. We had $447.6 million donated to nine copay
programs in the United States of America over the past year,
and it was not sufficient to meet the demands. As your
committee has looked at remedies for the prompt pay issue and
you are looking at remedies to solve many of the Medicare part
B reimbursement issues, I want to thank you on behalf of the
Medicare patients that we represent. And I want to also commit
to you that our foundations are here to work by your side to
see that these bills that have been introduced through your
committee are passed.
I am pleased to answer in great detail what is happening
with our patients going through shifts in site of care. But as
my closing remark, I would like you to note that since April 1,
we have started tracking the number of patients being shifted
from a community practice to a hospital outpatient setting. In
90 days, we have had 10 States that have reported shifting
patients from the community practice setting into the hospital
setting. So I would urge the committee to do what you do best,
and that is to look at how do we minimize financial devastation
for Medicare part B beneficiaries?
I thank you for the opportunity to answer questions.
Mr. Pitts. The chair thanks the gentlelady.
[The prepared statement of Ms. Davenport-Ennis follows:]
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Mr. Pitts. And now recognizes Dr. Melton for 5 minutes for
an opening statement.
STATEMENT OF LARRY B. MELTON, M.D., PH.D., FACP
Dr. Melton. Thank you, Chairman Pitts, Congressman Green,
and Congressman Burgess, for this opportunity to briefly
address the Energy and Commerce Committee as it examines
reforms to improve the Medicare part B drug program. I applaud
this committee for its leadership and ongoing commitment to
strengthening our Nation's health care system. I am Dr. Larry
Melton, Medical Director of Kidney and Pancreas Transplantation
at Baylor University Medical Center. In my many years of
practice and work at Dallas, Texas, I have become familiar with
a variety of Medicare program challenges and policy
imperfections that could be improved to save both lives and
Federal resources. Within my field of organ transplantation,
the most obvious and flawed Medicare policy is the program's
arbitrary 36-month coverage restriction for patients'
immunosuppressive drugs post-transplantation. As you may know,
organ transplant recipients must take immunosuppressive
medications for the lifetime of the transplanted organ. If
immunosuppressive medications are discontinued, rejection and
loss of the transplanted organ are almost certain to occur.
Since 1972, Medicare has covered people with end stage
renal disease without regard to age or SSDI status. There is no
Medicare coverage limit for a dialysis patient. By contrast,
kidney transplant recipients lose Medicare coverage at an
arbitrary 36 months after transplant. In 1972, it was estimated
that the ESRD program would cost $250 million. Today the
program costs in excess of $250 billion. These figures are
staggering, and there is no question that a functioning
transplant with immunosuppressive drug coverage is vastly less
expensive than the cost of dialysis. When renal transplants
fail, patients again require dialysis, and may even be
candidates for retransplantation, both of which would be
covered by Medicare. Extending immunosuppressive coverage
beyond the 36-month limit would decrease the risk of organ
failure due to patients not taking their immunosuppression.
The New England Journal of Medicine highlighted a survey
conducted by the American Society of Transplantation that found
70 percent of U.S. kidney transplantation programs reported
that their patients had an extremely serious or very serious
problem paying for immunosuppressive medications and 68 percent
reported deaths and graft losses attributable to cost-related
nonadherence. The study further found that since patients with
kidney failure need either long-term dialysis or a functioning
renal transplant to survive, failing to pay for ongoing
immunosuppression ensures that Medicare's initial investment in
kidney transplantation is squandered, that patients die
prematurely, and the U.S. Taxpayers pay for more expensive but
inferior therapy after some transplants fail unnecessarily. At
present, Medicare spends approximately $70,000 to $80,000 per
year on a dialysis patient, which Medicare covers indefinitely.
However, Medicare on average spends less than a quarter of that
amount for a kidney transplant recipient after a year of the
transplant. For more than a decade now, members of this
committee have introduced and supported legislation, the
Comprehensive Immunosuppressive Drug Coverage for Kidney
Transplant Patients Act, to address Medicare's deficiencies in
this area. Most recently, Congressman Michael Burgess and Ron
Kind have led the bipartisan and bicameral effort to secure
passage of this reform.
I strongly encourage everyone on this committee to
cosponsor, support, and pass H.R. 1428 during the 113th
Congress. The legislation saves lives, preserves life-saving
donor kidneys, and reduces the cost burden to the Federal
Government, a win-win for patients and the U.S. Treasury. The
bill would allow individuals who are eligible for
immunosuppressive drugs whose insurance benefits under part B
have ended due to their 36 months running out to remain in the
program only for the purpose of receiving immunosuppressive
drugs. If they have group health insurance, they would not
qualify for coverage beyond the 36 months. The legislation is
intended to be a coverage backstop only for those who otherwise
have no coverage. The legislation ensures that Medicare would
remain the payer of last resort and would not usurp coverage
offered by private insurers. It is not sound public policy or
cost effective for Medicare to cover the initial costs of a
kidney transplant and then stop immunosuppressive drug coverage
after 36 months. It is unfair to living donors and to those
families who have donated organs of the deceased loved one for
the Federal Government not to do everything possible to
maintain the transplanted kidney and the gift of life that they
have provided.
On behalf of kidney patients, families, physicians,
surgeons and all involved in the transplant process, I ask that
this committee make the 113th session of Congress the last
Congress in which many patients will lose Medicare coverage
after only 36 months. The Burgess-Kind legislation simply
corrects a costly policy inequity. It covers transplant anti-
rejection medicines only.
I thank you for the opportunity to focus a few minutes on
what we in the organ transplant community view as the necessary
reform to the Medicare drug program. Thank you.
Mr. Pitts. The chair thanks the gentleman and now
recognizes Mr. Cosgrove for 5 minutes for his opening
statements.
[The prepared statement of Dr. Melton follows:]
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STATEMENT OF JAMES COSGROVE
Mr. Cosgrove. Chairman Pitts, Congressman Green, and
members----
Mr. Pitts. Did you push the button? Is the light on?
Mr. Cosgrove. It is on.
I am pleased to be here today as you discussed Medicare's
payment for part B drugs and potential reforms. As you have
heard, part B drugs are often an important part of treatment
for cancer, autoimmune disorders, chronic kidney disease, and
other serious conditions. In 2010, Medicare spent nearly $20
billion for part B drugs in all settings, including physician
offices and hospital outpatient departments. That was about 9
percent of all part B expenditures that year. Last October, we
issued a report that examined spending and utilization data for
high expenditure part B drugs. Specifically, we analyzed the 55
drugs with the highest Medicare expenditures in 2010. We also
examined spending and utilization trends from 2008 to 2010 for
the same drugs. And then finally we estimated national spending
for the total U.S. insured population for these drugs and
calculated the share attributed to Medicare. So in my statement
today, I would like to highlight several findings from our
October report.
First, we found that Medicare expenditures were highly
concentrated among relatively few drugs. In 2010, the 55
highest expenditure drugs represented about 85 percent of all
Medicare spending on part B drugs, or about $16.9 billion. Ten
of those drugs accounted for approximately 45 percent of all
part B drug spending. Most of the 55 drugs are under patent and
can be purchased from only one manufacturer. At the time of our
report, none of the 10 highest expenditure drugs and only nine
of the 55 drugs we analyzed had a generic drug alternative. Of
the 55 drugs in our analysis, 23 were used to treat cancer and
its side effects. Others were used to treat various conditions,
such as immune system disorders, cardiovascular disease,
chronic kidney disease, and asthma or, as you have just heard,
to prevent organ transplant rejection.
Second, the number of Medicare beneficiaries who used each
drug as well as the average cost per beneficiary varied widely.
Some of the drugs were associated with high Medicare
expenditures either because many beneficiaries used the drug or
because the drug had a very high price. For example, Medicare
spent about $193 million on influenza vaccines in 2010. The
cost per beneficiary was only about $13. But more than 15
million beneficiaries were vaccinated. Medicare spent about
$143 million on Factor VIII recombinant used to treat
hemophilia A. In contrast to the influenza vaccines, Factor
VIII recombinant was only used by 660 beneficiaries but it cost
nearly $217,000 per beneficiary. Among the 10 drugs with the
highest cost per beneficiary, four cost more than $50,000 and
five more than $20,000.
Third, spending, utilization, and prices generally
increased in the 2 years. Medicare expenditures increased for
42 of the 55 drugs. The drugs with the greatest increases in
expenditures also had the greatest increases in utilization. In
particular, the four drugs with the largest in increases were
new drugs that had been recently approved by the FDA.
Expenditures for one of these drugs Lexiscan, a stress agent
for beneficiaries who cannot take a stress test, grew by
approximately 10,000 percent over the 2-year period because the
utilization grew by 11,000 percent. Prices for most drugs
increased between 2008 and 2010, although the price changes
were not as dramatic as utilization changes. The price of
Ventavis, a drug used to treat pulmonary arterial hypertension,
increased by 52 percent, which was the largest price increase
we observed. Because utilization of Ventavis also increased,
expenditures for the drug rose by nearly 94 percent over the
period. The price of the vaccine used to prevent pneumonia
increased by 36 percent. Some drugs did decrease in price. The
largest decline was 38 percent, and yet still remained among
the highest expenditure part B drugs.
Finally, our findings show that Medicare is an important
part of the national market for many of these high expenditure
drugs. Specifically, we found that Medicare spending accounted
for the majority of estimated total national spending on 35 of
the 55 highest expenditure part B drugs. Almost $17 billion
Medicare spent for the highest expenditure part B drugs, $11
billion, or 65 percent, was spent on drugs for which Medicare
beneficiaries accounted for the majority of total U.S.
spending. For 17 of the drugs, Medicare spending represented
two-thirds or more of total spending. And for six part B drugs,
Medicare's share of national spending exceeded 85 percent.
This concludes my prepared remarks. I am certainly happy to
respond to any questions.
Mr. Pitts. The chair thanks the gentleman.
[The prepared statement of Mr. Cosgrove follows:]
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Mr. Pitts. That concludes the opening statements. We will
now go to questioning. I will begin the questioning and
recognize myself for 5 minutes for that purpose.
Dr. Brooks, explain a little bit more what impact would
removing the prompt pay discount from the Medicare formula have
on patients and our overall health care system, if you would.
Dr. Brooks. Well, sir, obviously the weight of the
sequester would not be removed just by removing prompt way but
it would help us a great deal. Prompt pay diminishes ASP for
our offices by approximately 1 to 2 percent. It is a floating
number. It is not consistent. But it decreases our
reimbursement by about 1 to 2 percent. As I like to tell my
colleagues, my income in 2012 was 102 percent from commercial
insurance. And what that means is that we lost 2 percent on our
Medicare patients in our office. So if we were to get rid of
the prompt pay discount, that would restore us to baseline if
the weight of sequester were also treated more uniformly in our
space.
Mr. Pitts. Now the President has proposed a 3 percent cut
to the SP formula. What would happen to your practice if that
were to go into effect?
Dr. Brooks. Well, sir, I don't know whether to answer you
seriously or with some humor. But we did not include in any of
my remarks anything about disruption or drama or threats or
anything of that sort. But I can assure you that if ASP plus 3
percent were to ever be enacted, that disruption and drama
would occur. We would not be able to take care of our Medicare
patients at that rate. We would immediately have to discontinue
that because the losses would be enormous. The hospital
outpatient departments that are currently taking our patients
do not have the capacity to overnight take those patients in.
And there would be an enormous access problem.
Mr. Pitts. All right. Mr. Cosgrove, page 2 of your
testimony states that ``Medicare expenditures for part B drugs
in 2010 were concentrated among relatively few drugs.''
Is it fair to conclude then that the majority of drug
expenditures under part B should not be considered high
expenditure drugs?
Mr. Cosgrove. Under part B, Medicare covers hundreds of
drugs. So yes. I think the problem is just complex and it may
not be a one-size-fits-all because you have some drugs that
either because a lot of people use them or few people use them
and they are very expensive or some combination are very
expensive. And that is probably where the attention should be
focused.
Mr. Pitts. Ms. Davenport-Ennis, in reviewing the GAO
testimony, I noticed that a number of the high expenditure
drugs on the list under part B are drugs used to treat cancer
and various autoimmune diseases. And I am reminded of the new
lupus drug that was recently released, representing the first
new treatment for patients with this disease in over 50 years.
How important is it for patients with diseases like cancer to
have access to new and ground-breaking treatments in your
opinion?
Ms. Davenport-Ennis. Thank you for the question.
So from a patient's point of view, often the traditional
drugs that are in the marketplace are not going to continue to
work for cancer patients that have been in therapies for years
and years. If there is a cancer patient that has a very
advanced cancer, often you have to move them to the newer drugs
in the marketplace that will stop that disease where it is. And
whether it is cancer or whether it is another chronic
debilitating or life-threatening condition, the new drugs hold
the promise of independent living. They hold the promise that
people can stay at work. They hold the promise that they can
maintain their role as a parent, as a spouse, and as a member
of society. So each time we create a regulatory hurdle that
puts that new drug further away from the patient, the more
likely we are to see earlier debilitation due to disease and
less independent living and, therefore, additional cost to the
system and other places.
Mr. Pitts. Dr. Brooks, please describe for us some of the
differences patients experience between being treated in a
community-based oncology practice and receiving cancer
treatment in a hospital outpatient department.
Dr. Brooks. Well, I briefly described the differences in
convenience and financial commitments in my testimony. But just
to review, patients often have to travel a bit further to get
to a hospital outpatient department. They often have to wait a
bit longer. And CMS' costs in a hospital outpatient department
are higher by at least 50 percent. Those are the superficial
aspects of the problem. But, in fact, they are greater. I told
my colleagues about a husband and wife pair that I used to take
care of years ago and I ran into recently. And they told me
about their follow-up care in another State. The husband goes
to a private practice for his follow-up and he goes in for his
appointment at 10:00 o'clock in the morning. He gets to the
laboratory, sees his physician, and he is home by 11:00
o'clock. His wife chooses to go to a nearby tertiary hospital
outpatient department. And it is a very well run and well
respected institution. She has an appointment for a laboratory
at 10:00 o'clock and an appointment for an x-ray at 11:00
o'clock, an appointment for a physician at 1:00 o'clock and
outpatient counseling at 3:00 o'clock. And she is home by 4:00
o'clock. And she gets basically the same services as her
husband does in a local community oncology office.
Those are just--that is just an anecdote for you to
understand that while they give good care in hospital
outpatient departments, and we never say otherwise, it is just
different.
Mr. Pitts. Did you want to add anything, Ms. Davenport-
Ennis?
Ms. Davenport-Ennis. I would. I would like to add the human
element to that. So when we have a Medicare patient that
contacts us and says, I am now being moved from the community
setting with my doctor, and I am going to need to travel 28
miles to get to the hospital, I am going to be in an infusion
chair, and I may be there for an hour, I may be there for 6 or
8 hours, the journey when you leave that chair to return to
home is indescribable. So if I may be personal with this body,
I would like to.
My husband is a stage 4 cancer survivor. We had to move him
from a local oncologist, and we had him in a hospital setting.
The simple 28-mile journey resulted in such acute emesis that
we had to be rescued by an ambulance roadside. We are not a
rare exception. The side effects for cancer treatment are
serious, and they are not simply managed, and so when we move
you to a community hospital setting, you may indeed be able to
handle that transfer no problem whatsoever, but we have many
cases that document otherwise.
We think that the hospital cost is something that is
important to us. We have worked for 17 years to try to work
with patients to handle the cost of care in a financially sound
manner, and to exert the full limits of their insurance
benefits, and to encourage them to get Medigap policies so
that, indeed, they are protected as they move forward, and even
though they play by the rules, the system is failing them.
Mr. Pitts. The chair thanks the gentlelady.
I now recognize the gentleman from Texas Mr. Green, 5
minutes for questions.
Mr. Green. Thank you, Mr. Chairman.
Ms. Davenport-Ennis, can you expand on Dr. Brooks'
testimony and share the patient's point of view how the prompt
pay discount would affect access to Medicare beneficiaries?
Ms. Davenport-Ennis. So as we have talked to many of the
patients who have had their sites of care shifted, and as we
have worked with the doctors that are handling them, what we
know is that many of the practices started operating on reduced
margins in 2004 because we never got the codes back up to where
they needed to be, and ASP has been unstable at best. So if we
could, indeed, restore a 2 percent prompt pay discount to many
of these practices, it would be the difference between adding
back another oncology nurse case manager or not having one. It
would be the difference between being able to have after-hours
support for the patient and sending them to the hospital phone
line for after-hours support.
So there are many services that we think could be restored,
and you could maintain practices. And for the record, I would
like to report that to this point we have had 1,200 practices
in the United States that have either closed completely or
compressed their services into hospital settings in which we
lost capacity because the number of chairs available for chemo
at the hospital were not commensurate with what they had before
the compression and equal to the practice as well.
Mr. Green. OK. Dr. Brooks, can you walk through the
importance of that 6 percent additional service fee and what
has it accounted for? And I know cancer-treating drugs can be
very expensive. For example, if it was a $100,000 treatment,
that would be $6,000 that would be part of the service fee. Can
you walk us through that?
Dr. Brooks. I would be delighted to, Congressman.
Obviously, the sequester has definitely removed any
incentive we have for prescribing expensive drugs, because a
small percent on a large number cuts both ways. But the prompt
pay discount takes that 6 percent of ASP and attenuates it by 1
to 2 percent, in our opinion. We have to have working capital
for inventory, administration, storage, inventory management,
systems for transport, pharmacy costs, clean room, equipment,
waste disposal. We have to deal with the problem of inadequate
copay collection from Medicare beneficiaries--that runs about 5
percent in most of our practices--drug denials. And then there
is the problem of price increases which are not reflected in
ASP for about 6 months.
This results in pretty much taking away our 6 percent
service margin that we previously had, but with sequester we
have attenuated that ASP by an additional 1.7 percent, or 28
percent of our services payment that we have gotten before. So
now we are, as we say, breathing through a straw because we are
under water.
Mr. Green. OK. With prompt pay, now sequestration, what is
the effective percentage? It is lower than the 6 percent?
Dr. Brooks. I am not sure I understand your question, but,
yes, sir, if we were to restore both of those, we would be back
to very close to break even on our cancer--Medicare cancer part
B drugs, and we would be able to go back to life as we had it
in 2012. Not great, it was a lot of migration into the
hospitals, but it would be much better than we currently have.
Mr. Green. And I know Ms. Davenport-Ennis talked about the
impact on patients. In your practice have you seen the same
situation that she talked about?
Dr. Brooks. Yes, sir. I thought that she was very eloquent
describing the patient problems of the frail cancer patient
having to travel great distances to a site of care. We see that
a lot in our State of Texas, where people have to travel. When
community practices close, my Texas oncology, if we were to
lose our ability to take care of Medicare patients in rural,
small-town, and in medium-sized Texas, cancer patients,
Medicare beneficiaries would be traveling, 100, 200 miles each
day for site of care that would take----
Mr. Green. I only have about 20 seconds.
Mr. Binder, obviously Congressman Whitfield and I have
introduced legislation on the prompt pay discount and the
calculation. Isn't it true that this was fixed within the
Medicaid program, the prompt pay issue?
Mr. Binder. I am sorry, could you repeat that?
Mr. Green. Was the prompt pay issue fixed within the
Medicaid program?
Mr. Binder. The prompt pay----
Mr. Green. Is your mike on?
Mr. Binder. It doesn't--to my knowledge, the prompt pay
discount that is proposed in the legislation wouldn't impact
the Medicaid program directly. Medicaid prices, the Medicaid
rebate is determined off of average manufacturer price, and
that price excludes all discounts already.
Mr. Green. OK. OK. Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the vice chairman of the subcommittee Dr.
Burgess, 5 minutes for questions.
Mr. Burgess. Thank you, Mr. Chairman. Before I get to
questions, I would like to submit for the record a few things.
The article from the New England Journal of Medicine from, I
think, February of last year that Dr. Melton referenced on the
impact of coverage limits on immunosuppression. I also have
statements from the National Kidney Foundation, the American
Society of Nephrology, and the American Society of Transplant
Surgeons, and I would like to make those all part of our
proceedings today.
Mr. Pitts. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. Dr. Melton, frequently here on this committee
we hear people talk about, you know, we only want sound
science; we want to make our decisions based on sound science.
So tell me, is there a good scientific rationale for the 36-
month interval for covering immunosuppression after a renal
transplant and then stopping that activity?
Dr. Melton. There is no rationale that that is based on at
all that I am aware of. The patients that we transplant are
required to take immunosuppressant medications for the life of
the transplant. And it is true that many times they require
more medications early on in their transplant course, and those
can be reduced later on, but the need to take those medications
continues to exist forever.
Mr. Burgess. So there is not some point at which a
patient's immune system just kind of accepts life as it is with
this new graft that is sitting in the body, and the immune
system just kind of turns off its recognition of this as a
foreign object? That doesn't happen, does it?
Dr. Melton. No, sir, that doesn't happen.
Mr. Burgess. So since it doesn't happen, then what happens
to the graft when you run out of the immunosuppressive
activity?
Dr. Melton. The body begins reacting against the graft, the
immune system begins to reject that graft, and over a period of
time the patient will lose the kidney transplant and will
return to dialysis therapy.
Mr. Burgess. So you as a physician would see what, that the
ability--the filtration rate of that grafted kidney would begin
to diminish, so tests that you do or blood work that you do
would begin to reflect a lower functionality of that
transplanted kidney?
Dr. Melton. Yes, sir, that is correct.
Mr. Burgess. So what is the patient going to experience
during that time?
Dr. Melton. The patient begins to develop symptoms of
kidney failure: tiredness, loss of appetite, inability to
concentrate. They will begin to have some pain over and around
the kidney transplant itself, indicating that there is an
inflammatory rejection process going on there, and many times
that results in us having to remove that kidney transplant
because of the discomfort and pain that the patient is
developing.
Mr. Burgess. So it is not a silent activity as far as the
patient is concerned; they are aware that there is a problem?
Dr. Melton. Yes, sir, they are.
Mr. Burgess. Well, let me ask you this: OK, 36 months go
by, we stop immunosuppressive drugs because we think that is
good Federal policy. The patient begins to reject their kidney.
You do the right thing, which is bring that patient back in to
the dialysis clinic or refer them back to the dialysis clinic.
Does that take care of the problem?
Dr. Melton. Well, that keeps them alive. It doesn't keep
them healthy as they were, and it certainly doesn't correct the
problem of losing the drug coverage after 36 months.
Mr. Burgess. So what about the quality of life for that
individual, does it get affected at that point?
Dr. Melton. Oh, absolutely. Quality of life on dialysis is
nothing compared to transplantation. Transplantation
essentially makes someone a normal individual, if you will;
they are able to work, they are able to travel, they are able
to participate in sports activities, they can have families.
Many patients who are on dialysis are, frankly, beat up by the
procedure and are unable to hold a job, and they suffer a lot
of complications from kidney failure and dialysis therapy that
shortens their life span.
Mr. Burgess. Well, as I seem to recall, this is back in the
1970s, so it is probably much more frequent now that a patient
could even successfully carry a pregnancy who has gone through
a transplant.
Dr. Melton. Oh, absolutely. We have--at our institution we
have about 40 patients now, 40 women, who have successfully had
pregnancies with their transplants, most recent--well, not most
recently, but recently a young woman with a combined kidney and
pancreas transplant that delivered twins successfully.
Mr. Burgess. That is a remarkable story.
So what about the--immunosuppressive drugs have been around
for a while, cyclosporine, I guess. Is that still the main one?
Dr. Melton. Cyclosporine has been around since the mid-
1980s. There are several others that have come into play since
that time.
Mr. Burgess. So do we have generic--the availability of
generics for those?
Dr. Melton. We do have generics for some of the drugs, not
for all of them.
Mr. Burgess. Does the ability of generics reduce the
overall price tag for providing immunosuppressant drugs?
Dr. Melton. Some of the generic drugs are less expensive,
particularly if they are covered through some insurance plans.
I had our social workers actually run a pro forma on that for
me about a year ago, and surprisingly--cyclosporine was one of
the drugs that you mentioned, and surprisingly the generic
forms of cyclosporine came in only about a third less than the
brand-name drug. So there was not a substantial--well, a third
is a substantial reduction, but it was still a pricey drug for
the patients.
Mr. Burgess. I guess the point would be the last time--you
know, we have got to do stuff that the Congressional Budget
Office tells us we can afford to do, so the last time the
Congressional Budget Office scored this particular piece of
legislation, they gave it a dollar score. Would it be fair to
say that rescoring this with this information about the use of
generic medications might result in a lower score?
Dr. Melton. I don't know how they go about their scoring
process.
Mr. Burgess. I don't, either.
Dr. Melton. It is a mystery to me. The only comment I can
make about that is it is--certainly relooking at these drug
costs would be of benefit, I think, to our patients.
Mr. Burgess. It would also be a benefit if we could look
longer than a 10-year window, because if you add the cost of
dialysis in perpetuity to a patient who lost their graft after
3 or 4 years, clearly it is going to come down on the right
side of the cost curve.
Thank you, Mr. Chairman. I am going to yield back my time.
If we have time for a second round, I will be willing to
participate.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady from Florida Ms. Castor, 5
minutes for questions.
Ms. Castor. Well, Mr. Chairman, I appreciate you holding
today's hearing and all of the very insightful testimony from
our witnesses. Thank you very much for being here.
I want to talk about one fixable issue, the two-quarter
price lag on the part B price calculations.
Mr. Binder, one issue you discuss in your testimony is that
two-quarter lag in part B price calculations for provider
reimbursement. Can you elaborate on the issue? How does this
come into play?
Mr. Binder. Well, manufacturers report their data, their
ASP prices, to CMS, and then CMS has a period of time to
process the information and apply it to the prices they are
going to pay for those drugs. And it is done on a billing-code
basis, so there is--for some billing codes there is a number of
drugs included, and for some there is just one drug when it is
a sole-source drug. But that process takes some time, and there
is analysis involved, and so it is 6 months before the prices--
--
Ms. Castor. Six months?
Mr. Binder [continuing]. Are applied.
Ms. Castor. What are some of the impacts of that 6-month
lag?
Mr. Binder. Well, it varies. You know, if the drug price
goes up, and, you know, certain buyers, say, for instance,
buyers who don't buy in very large volume, are more likely to
be affected by this than large-volume buyers or purchasers,
they could, you know, have to pay more for the drug than they
can get from Medicare in payment. If the price goes down,
purchasers, providers are more likely to have it--to buy it at
a lower price than they are getting.
Ms. Castor. Dr. Brooks, you discussed this in your
testimony. Give us the real--what is happening in the real
world with a 6-month lag?
Dr. Brooks. Well, the 6-month lag is a problem. There are a
lot of the pharmaceutical and biologic firms that have a
business model whereby they raise prices about once a year, and
they put us under water for 6 months. And then before we quit
prescribing their drugs, they allow 6 months where we can more
or less hold when ASP comes back to respectability, and then
they have another price increase again the next year.
This is what we see, this up-and-down price sequences where
we have 6 months under water, then 6 months to try to catch up,
and then 6 months down again. It is a relentless process, and a
more rapid reconciliation of those price increases that we have
to pay with what we are actually reimbursed would be most
helpful to our ability to deliver cancer care to our Medicare
patients.
Ms. Castor. That is consistent with what I am hearing from
doctors back in Florida. And I know it seems like an arcane
detail, but I think it is having big impacts. And sometimes in
Congress we hear about problems that are difficult to solve,
and sometimes we hear about problems that are easier to solve,
and it seems like one that, Mr. Chairman, would fall into the
easier category. In this day and age, when you can communicate
with anybody anywhere in the world in seconds, and we can pull
up any piece of data on our iPads that we have here or our
iPhones, it certainly seems to me like we should be able to
determine accurate Medicare drug prices without a 6-month lag
in time.
The two-quarter lag is written into Medicare law, so this
is a problem for Congress to solve. And, Mr. Chairman, I hope
we can work together to find a solution on this.
I would also like to talk about the impact of the
sequester. It has been in place for several months now, but it
is no longer front-page news, but that doesn't mean that it is
not causing real harm. One area where it has hit hard is in
reimbursements for Medicare providers, including the part B
drug providers.
The sequester required a 2 percent cut in reimbursements.
Earlier this year The Washington Post had quite an article on
it identifying one cancer clinic that said that due to the
sequester, they would have to stop treating as many as one-
third of their 16,000 patients. And this is consistent with the
testimony here this morning.
Dr. Brooks, can you tell us what--put us in the real world
here. What is this 2 percent cut having--what impact is it
having on patients that you see?
Dr. Brooks. Well, Congresswoman, thank you for the
question. I only alluded to it briefly, but it is not a 2
percent cut for Medicare part B drugs in oncology. CMS has
interpreted the rule perversely, in our view. They have cut not
only our 6 percent services payment, but also the entire 100
percent drug acquisition costs that we do for CMS. So they cut
us on all of Medicare's expenditure so that it results in a 28
percent reduction in our services payment, and this has put us
under water and has cost those of us----
Ms. Castor. It is so irrational. I mean, it really
highlights the irrationality of the sequester, just across-the-
board cuts that are not based on the real needs of the American
people. And it is not just Medicare part B, it is cuts to NIH,
and medical research funding, Head Start, Meals on Wheels. And
I think the solution--I know that legislation has been filed
particularly on this point, but the real solution are both
sides of the aisle coming together to replace the sequester.
Now, yesterday the--my side of the aisle, the Democrats, we
appointed budget conferees. We are ready to go negotiate, and I
would ask my friends on the other side of the aisle to please
do not be afraid to come together and negotiate. We are seeing
a real-world impact of the sequester.
Thank you, Mr. Chairman.
Mr. Pitts. The gentlelady's time has expired.
The chair recognizes the gentleman from Louisiana Dr.
Cassidy, 5 minutes for questions.
Mr. Cassidy. Dr. Brooks, Ms. Davenport-Ennis, I am struck,
it seems like we have a trifecta of bad things driven by
government policy. One, 340B program or something else is,
among other things, driving community oncologists to go into a
hospital outpatient network, that that hospital outpatient
network charges Medicare more, that the patient pays more, and
that they are less convenient.
For folks who don't know what emesis is, Ms. Davenport,
vomiting. Your husband was so sick, he was vomiting on the way
back that he dehydrated in a half-hour drive and had to get an
ambulance. This is like a quadrifecta of bad things. Did I hear
that right, or am I misstating what the two of you said?
Ms. Davenport-Ennis. So from my point of view, you have
heard it exactly right. And I would like to comment, if I may,
on 340B.
Mr. Cassidy. OK. You may want to elaborate what the program
is for those who may not be familiar.
Ms. Davenport-Ennis. So when we look at 340B, the intention
of the program was well intended. We were phasing out Hill-
Burton hospitals that were supplying support to the at-risk
populations. We introduced 340B concept so that hospitals
serving at-risk populations could buy drugs at a reduced price,
could bill them at a standard price; the margin could therefore
be used for that hospital to make certain they could continue
to serve the at-risk populations.
Initially the intent was to have 600 to 900 hospitals in
the country as part of 340B. Today we have over 6,000 hospitals
in the 340B program, and the margins are not necessarily
consistently offering support to the at-risk population. The
margins are being used to recruit community oncologists to come
into that hospital setting.
Mr. Cassidy. Now, is that allegedly, or do you have
evidence of that?
Ms. Davenport-Ennis. No, we have evidence of that, in
talking with a number of the practices. We work with
oncologists in 50 States in the United States who work with us
in case management services and in our copay relief services,
and so it is not alleged, it is documented, and we--I would
like to ask----
Mr. Cassidy. So just to be sure, I am sorry to interrupt,
but the program that supposedly is the subsidized care for the
uninsured and for the Medicaid and Medicare patient to bring a
set of services that otherwise they would not be able to have,
you are saying that there is evidence that it is not being used
for that, but rather to subsidize the purchase of community
practices, bringing them into the hospital outpatient
department, and in the meantime increasing costs to Medicare,
to the patient, and decreasing convenience. Is that what you
are saying?
Ms. Davenport-Ennis. Yes. What I am saying is that indeed
the 340B hospital structure now allows it to offer very
attractive packages to oncologists for them to leave their
practices and associate or to bring their entire practices to
the hospital setting, yes, sir.
Mr. Cassidy. Now, I will say that I work and I still see
patients in the Louisiana public hospital system, and that
there are some hospitals I will declare that are still doing
the correct mission with the 340B program.
Ms. Davenport-Ennis. You are exactly right.
Mr. Cassidy. Yes. A lot of my patients would not have drugs
otherwise.
Mr. Cosgrove, I have been struck anecdotally there is
evidence that the drug shortages, for whatever the etiology of
the drug shortage is, is leading to the need to substitute more
expensive drugs for much less expensive generic drugs; that the
shortage of sterile injectables in the oncologic space, for
example, is requiring the use of more expensive drugs. Now,
that is anecdotes. I read it in the paper. Did you find
evidence for that influencing utilization and cost?
Mr. Cosgrove. We did not. We did not look at that
specific----
Mr. Cassidy. Did you look at that? Microphone, please. Did
you specifically look at that, or you just--you looked at it
and didn't find it?
Mr. Cosgrove. We did not look at that. GAO has a report it
issued in November of 2011, I believe, looking at shortages and
their causes. There is follow-up work going on right now. It is
a mandated study to try to get behind what is exactly causing
those shortages and what the trends are.
Mr. Cassidy. OK. Dr. Brooks, anecdotally are you seeing
evidence for that or--because, again, I read about it in the
paper, so that is why I am----
Dr. Brooks. Well, sir, it is not anecdotal. We in US
Oncology are--and with the help of our corporate partner,
McKesson, we monitor the space extremely tightly, and I am
actually involved in that monitoring. And your comment about
steroids is spot on. We sent out an alert recently that
methylprednisolone is in short supply. It costs pennies, but it
is in very short supply because of the pressure of
manufacturers.
ASP plus 6, I believe--and I don't know that the office of
MMA--but I believe it was designed to curtail expenditures
around expensive products. They never understood that they were
going to create a race to the bottom in generic market so that
our generic oncology drugs get lower and lower and lower
prices, and then eventually it becomes not worthwhile to make
these drugs. It costs only 2 or $3. They are expensive, they
are hard to store and all this other stuff. It just--the
economic incentive vanishes.
Mr. Cassidy. We are out of time, but if I may say, so Mr.
Waxman at the outset saying that we are saving money by price
controls, it may be that we are saving money in the short run,
but long term penny wise, pound foolish, because we are having
to substitute far more expensive drugs.
I yield back. Thank you for your indulgence.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady from California Mrs. Capps, 5
minutes for questions.
Mrs. Capps. Thank you, Mr. Chairman. I am very pleased we
can come together for another bipartisan hearing to address
some commonsense improvements to Medicare, including two
important provisions that I have cosponsored.
Medicare beneficiaries are a medically vulnerable
population, and we have a responsibility to ensure that they
have access to high-quality, community-based care and are not
facing unreasonable financial burden. Unfortunately this isn't
always the case, but I am pleased to see we have a lot of good
bills from this committee to help address some of these
shortcomings.
I have heard a lot from my constituents about challenges
with continuity of care, access to providers, and the
prohibitive costs of treatments for cancer and other chronic
conditions. Cuts as a result of sequestration are taking a real
toll on providers and have serious implications for access. For
one oncologist in my district who sees a patient base that is
over 90 percent Medicare beneficiaries, this has meant letting
staff go, the sequestration, making serious pay cuts, and
taking out a home equity loan just to keep the doors open,
because if she doesn't do this, patients will have to travel
more than 30 miles to the next closest provider.
While I do have serious concerns about piecemeal approach
of easing the impact of only one part of sequestration, that
doesn't mean that this issue isn't an incredibly important one
and does deserve our attention. I hope we can find a solution
that minimizes the harm to patients and providers, especially
in the context of an overall sequestration fix. I know it is
not going to be easy, but I believe we can do this if the House
majority will let us.
I also wanted to highlight that there are other
improvements to Medicare part B that do not involve drug
benefit, but are also critical to address gaps in care that
many patients face. Navigating complicated treatment options
for yourself or a loved one, especially with a cancer
diagnosis, this can be a full-time job and more, and without a
plan it can be really overwhelming. And that is why this week
my colleague from the Ways and Means Committee Mr. Boustany and
I introduced H.R. 2477, the Planning Actively for Cancer
Treatment Act, or the PACT Act. This bill would improve the
health of Medicare beneficiaries with a cancer diagnosis while
reducing inefficiencies in the Medicare system.
The Medicare program spends over $55 billion each year to
treat patients diagnosed with cancer, and too many of those
patients do not receive a written care plan that explains the
diagnosis, the prognosis, the treatment, and the expected
symptoms. This leads to poor coordination among providers,
reduced adherence rates, and increased stress or pain for the
patient and their family.
However, a strong body of research shows that care planning
coordinates care between numerous providers, and it also
encourages shared decisionmaking between doctors and patients
about how to best move forward based on both medical evidence
and patient wishes. It addresses both the cancer treatment, but
also the side effects from treatment, while addressing the
patient's needs, and this can be done in a holistic way.
Research has confirmed that this kind of coordinated care
really does improve patient outcomes, increases patient
satisfaction, reduces unnecessary utilization of healthcare
resources.
Ms. Davenport-Ennis, as someone who is very familiar with
the challenges patients face--I know all of you are, but there
is not much time--would you share how this bill could help
patients as they navigate cancer care, something I have been
advocating for for a very long time?
Ms. Davenport-Ennis. You have, and on behalf of the cancer
patients in the country, thank you for the work that you
continue to do.
What this would do is provide a road map to survival, and
it would show them what the stops are going to be along the
way, and it would identify to them what to do when you have
reversals. It would also allow them to manage their resources
and to plan accordingly. It would also allow us to have an
opportunity for end-of-life discussions when we need to have
end-of-life discussions as part of planning for the full
continuum.
It is, indeed, the beacon for the future, and it is
something we have lobbied for in this city for more than 10
years, and we are very hopeful that you are going to make it
happen this time.
Mrs. Capps. Well, I am going to need a lot of help, as you
know, and maybe--Mr. Chairman, this is a request. I have
another whole topic to bring up on restraining excessive cost
sharing, the Patients' Access to Treatments Act, another bill
that I have introduced with Mr. McKinley. I will just submit it
for the record, and perhaps some of you may wish to comment on
it.
[The information appears at the conclusion of the hearing.]
Mrs. Capps. But I kind of wanted to get just a nod from the
rest of you about this kind of coordinated care plan that we
are advocating to see if it fits your needs, yes or no,
quickly. Thumbs up? Is that the verdict?
I mean, it is kind of one of those no-brainers, isn't it,
that we should just set ourselves around to doing, and I
appreciate very much this opportunity to discuss it.
I yield back.
Mr. Pitts. Without objection that will be entered into the
record, and I would also like to ask unanimous consent that the
following documents be submitted for the record: a letter from
the California Health Institute, a letter from the American
Society of Clinical Oncology. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mrs. Capps. Mr. Chairman, I was just informed by staff that
I should ask, because we had a lot of nods, and I don't think
the recorder can----
Mr. Pitts. All right. The witnesses will please respond
verbally to----
Mrs. Capps. Just really quickly yes or no.
Dr. Brooks. It would be a great asset, and as long as it
wasn't sort of an unfunded mandate, we would cherish it.
Mrs. Capps. The question is whether there is agreement
about the need for a coordinated care plan, a plan, a written
plan.
I guess one strong affirmative. We will note that.
Dr. Melton. In support of my oncology colleagues,
absolutely.
Ms. Davenport-Ennis. And in support of the patients that we
serve in the United States, absolutely.
Mrs. Capps. Thank you.
Ms. Davenport-Ennis. Yes.
Mrs. Capps. Thank you.
Mr. Pitts. All right. That concludes the first round. We
will have one follow-up. We will go on each side. Dr. Burgess
for follow-up.
Mr. Burgess. Thank you, Mr. Chairman.
You know, I know people watching these hearings sometimes
get confused. We have got a representative from the
Congressional Research Service here. We appreciate him being
here. We also talk about the Congressional Budget Office, which
does the scoring of legislation that is introduced in Congress.
There is another budgetary body down at the White House called
Office of Management and Budget. Certainly Center for Medicare
and Medicaid Services makes its own determinations to some
degree.
But one of the main things, one of the main foci of today,
has been the inclusion in the category of physician services
the acquisition and storage of very expensive drugs. And I
think, Mr. Binder--I don't want to put you on the spot, but I
think even CRS would agree that you have a family practitioner
who diagnoses pneumonia, writes a scrip, tears it off, hands it
to the patient, says go down to the pharmacy and buy these
penicillin tablets and take them, and you will get better. If
you were--it would be wrong to say we are going to include that
cost in the physician's service and then subtract 2 percent
from that total bill and get that money back to the government.
It just wouldn't make good sense.
So the acquisition--and this was part of my opening
statement, that the math function doesn't compute here. This is
my beef with the Centers for Medicaid and Medicare Services. We
sent them a letter signed by a lot of members of this
committee; we got a nonresponsive response. Sorry, not good
enough. We sent a follow-up letter to them that you really have
to delineate to us how in the world that acquisition and
storage requires a medical degree and a State license in order
to do that, because otherwise it just opens the door for all
other sorts of mischief. So I hope that we are able--Dr.
Brooks, I hope that we are going to be able to get some
sensibility surrounding that.
More difficult aspect to undo the sequester. I mean, the
sequester, after all, was bipartisan legislation, much more
bipartisan than the Affordable Care Act; was signed by the
President. Same President who signed the Affordable Care Act
signed the sequester. So we are often told on this committee
when we complain about the Affordable Care Act, hey, it is the
law of the land, get over it. Well, the same statement could be
made about the sequester: It is the law of the land.
But we do need to be certain that it is administered
properly, and in this case, I think Dr. Brooks is exactly on
target, it is not being administered properly. And you may even
want to address--you get some--I mean, your practice margin is
pretty narrow, and there is lots of things that put pressure on
your business model, but everyone on this dais would say it is
a good business model. We want you to be focusing on what you
do best, which is taking care of the cancer patient. A patient
gets cancer, they want to go to a clinic where that is all they
take care of. They don't want to go to a clinic where they are
also delivering babies and treating kids with runny noses. They
want a cancer specialist, and I don't blame them, and that is
what you provide.
But you are also, if I recall correctly, under State law
and under our Texas law, with the franchise tax. This is
something you also have to deal with with the acquisition and
storage costs that also erodes your ability to take care of
patients.
But the big thing you brought up, and what I really want to
perhaps ask you to comment on, you said 102 percent of your
business is required to pay for all of your business, because
the government doesn't carry its fair share. Did I understand
you correctly when you made that statement?
Dr. Brooks. Yes, sir. Those were numbers for 2012. That is
our calculation. Our professional medical oncology payment for
my salary is 102 percent from commercial payers, meaning that
the Medicare and Medicaid are minus 2 percent. So we actually
paid for the privilege of taking care of those patients, and
that sounds like horrible or something, but we were oK with
that. I mean, I hate to say it. Our mission is to take care of
patients, and we are oK with a small loss to continue doing
what we believe we should do.
Now under sequester our incomes are falling like a stone,
and I don't--I can't give you a number for how bad it is, but
there is a multiplier effect going on here, and it is much
worse than we--our accountants projected for us, the actual
dollars coming in. And we are anticipating that the--everybody
says, oh, there is no drama, nobody is losing access. We
anticipate that there will be a two-stage approach here. The
smaller practices that are not taking adjustments will begin to
have to turn out their lights for the last time in August or
September, in our calculations, and our complicated larger
practices are working quietly behind the scenes to arrange for
transfer of these patients to other venues because we will not
be able to continue to subsidize our Medicare beneficiaries.
Mr. Burgess. But I would just project that the entire--we
also heard some discussion about consolidation of practices.
Certainly cardiologists saw that with the consolidation of
their practices moving to the hospital. The Affordable Care Act
is going to put some pressure on practices of all sorts to
consolidate. I mean, in fact, Zeke Emanuel, one of the
principal architects of the Affordable Care Act over at the
White House, said that he wanted doctors to work for a hospital
or a health plan or the government; that was a better way, in
fact, to practice; that you and I are dinosaurs in private
practice.
I do--we do need to keep a focus on this, because your
comment that part of your practice pays for the other part, it
is the government part that is not carrying its weight. As that
level is expanded, and it will be, make no mistake about it,
January 1st of this next year, by a year from now we will be
seeing that in a big way, we won't be crying about just the
sequester, we will be crying about what a significant negative
impact that has had on your practice.
I want you to know we are prepared--we are trying to
prepare for that, we are trying to make sure we are on top of
that, but it is, indeed, a difficult question. But both sides
need to be involved in this discussion.
I will yield back, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now recognizes the gentlelady Mrs. Capps, 5 minutes for
follow-up.
Mrs. Capps. Mr. Cosgrove, your testimony provides us a
broad overview of key part B drug spending facts. If I could
briefly go over some of these facts with you?
First, about how much does Medicare part B pay for drugs
each year?
Mr. Cosgrove. In 2010, it was almost $20 billion, $19.5
billion.
Mrs. Capps. Your testimony indicates that many of these
part B drugs can be particularly expensive, costing tens of
thousands of dollars or more. Why is this? I know patients want
to know.
Mr. Cosgrove. Well, the price--I mean, Medicare is--working
through physicians is accepting market prices, which are set by
manufacturers.
Mrs. Capps. OK. Am I correct, Mr. Cosgrove, that for many
of these drugs, Medicare part B is the largest single--single
largest purchaser?
Mr. Cosgrove. Yes, that is absolutely true. For 35 of the
55 drugs that we looked at, Medicare was the majority
purchaser, and there were a handful of drugs for which Medicare
paid more than 90 percent of the share of the total market.
Mrs. Capps. And just to be clear here, we need to do all we
can to keep the drug pipeline flowing. These new drugs are
expensive, but they do save lives. And a thriving drug industry
is important for Medicare and for patients, that goes without
saying, but we also need to make sure that we are spending
taxpayer dollars wisely, and we are spending so much on these
part B drugs that I wonder if we are able to get the best deals
possible.
Do you have any thoughts here, Mr. Cosgrove? Does Medicare
part B program have all the necessary tools that it needs to
help reduce drug costs for taxpayers and beneficiaries?
Mr. Cosgrove. Well, I think this is a lot of money when you
are talking about $20 billion.
Mrs. Capps. Yes.
Mr. Cosgrove. And you are also talking about drugs that can
be incredibly valuable on a wide variety of things, but that
can be true for lots of parts of Medicare as well. And so I
think that it is the responsibility of this committee and the
rest of Congress to make sure that we are always getting the
best deal, to make sure that providers are paid appropriately,
and that beneficiaries have access to quality care, but that
Medicare is not overpaying, and that would include making sure
that we pay the right price and we set the right incentives for
providers to do the right thing.
Mrs. Capps. Mr. Binder, do you have any thoughts on this?
Mr. Binder. Well, I agree with what Mr. Cosgrove said. The
drug-pricing methodologies are complicated, and in this case
you are talking about overlaying a methodology on the market
mechanism as well, the manufacturers price their drugs. So you
are overlaying this methodology, this payment methodology, and
that becomes complicated, and you add sequester on that, it
becomes even more complicated.
But there have been a number of proposals, including in the
President's budget and other places, for other fixes or
adjustments to either the ASP plus 6 or other approaches that
could potentially help alleviate some of these issues.
Mrs. Capps. Thank you.
I will just bring up again the second bill, H.R. 460, the
Patients' Access to Treatments Act, that I have introduced with
Mr. McKinley, because it does address restraining the excessive
cost sharing for specialty drugs, bringing medically necessary
treatment within reach for average Americans.
While this bill only addresses the private insurance, the
problem isn't unique to the commercial market. Under part B
patients who face a serious diagnosis or are living with a
chronic health condition are subject to significant financial
burdens. Unlike the protection that many of us have with
private plans, seniors who can't afford supplemental coverage
and have traditional Medicare part B plans have no out-of-
pocket max. That means that they continue to pay 20 percent out
of pocket for every part B service, as you know. And for
patients undergoing cancer treatments or requiring ongoing
doctor-administered therapies, this cost can be prohibitive,
especially when you realize that half of Medicare beneficiaries
have incomes below $22,000 a year.
I mean, this is a set-up for failure. Health expenses
constitute almost 15 percent of household budgets for
individuals who are on Medicare, nearly three times the
spending of non-Medicare households. I sound like I am on a
soapbox, but maybe I will ask just in conclusion, 15 seconds,
Ms. Davenport-Ennis to comment.
Ms. Davenport-Ennis. Certainly the Medicare beneficiary is
not in a position to pay what is required in a 20 percent
copayment into perpetuity in part B Medicare.
Mrs. Capps. Thank you.
Yield back.
Mr. Pitts. The chair thanks the gentlelady.
We are going to go to one more round on each side, one more
follow-up on each side. So the chair recognizes Mrs. Ellmers
from North Carolina, 5 minutes for questions.
Mrs. Ellmers. Thank you, Mr. Chairman, and I apologize for
coming in so late to this so important subcommittee hearing.
I do have a couple of questions, and I would like to ask
Ms. Davenport-Ennis and Dr. Barry Brooks this question. Earlier
I made an opening statement regarding the Medicare part D and
the effect that sequester has on those cancer drugs or
chemotherapy agents. Given my discussion with the community
oncologists and the numerous media reports that are going on
now over the past few months, you know, we are now entering
into about the third month of this affecting chemotherapy
drugs. Basically patients are being forced out of their local
community clinics to the more expensive hospital setting. What
impact do you believe my bill would have in stopping this
harmful trend?
Ms. Davenport-Ennis. I believe that it will at least stop
some of the hemorrhaging of what is happening now. I think
ultimately the committee is going to need to look at a
comprehensive approach to what can be done to stabilize
reimbursement to the practices, but your bill is certainly
going to take a significant step forward in resolving this.
Mrs. Ellmers. Thank you.
Dr. Brooks?
Dr. Brooks. I agree that your bill would slow our
hemorrhage and allow us to return to some semblance of
stability. One-third of the market of community oncology has
migrated to the hospital in the last 7 years, and that has been
accelerated in the last 3 months under the weight of the
sequester burden, and were we to relieve that, hopefully access
could be maintained, and community oncology could continue to
be practiced the way it has for the last two decades.
Mrs. Ellmers. Thank you.
I would also like to pose another question to the entire
panel. Basically, as you know, the whole point of sequester is
to reduce the spending at the Federal level; however, treating
people in the hospital is actually more expensive than
providing the same service in a physician's office or clinic
setting. In fact, studies show that providing chemotherapy
costs Medicare and the taxpayers $6,500 more per patient per
year in the hospital setting and $650 out of the patient's own
pocket.
Basically also, and I will just add this, just last night I
saw attacks from doctor--a doctor from Tulsa, Oklahoma, that
read, quote, We have sent 50 percent of our chemo to hospitals
in the past week, even patients with good insurance, because
drugs are unaffordable for us at this point.
Given that the application of sequester by CMS is actually
costing taxpayers money instead of saving it, shouldn't
Congress be doing everything in our power to reverse this and
make a change where we see a need? And I will just ask a
basically yes or no answer from the entire panel.
Mr. Binder. I am sorry, could you repeat that?
Mrs. Ellmers. Basically--I caught you off guard. Basically
my point is as a result of more patients going to the hospitals
and being treated in the hospital setting, it actually costs
Medicare and the hard-working taxpayers of America $6,500 more
per patient per year, but then also, and this is the truly, you
know, shameful part, another $650 out of pocket for that
patient. In your opinion, shouldn't we be doing everything we
can to fix that?
Mr. Binder. Yes.
Mrs. Ellmers. OK. Perfect.
Dr. Brooks?
Dr. Brooks. Absolutely.
Ms. Davenport-Ennis. Completely.
Dr. Melton. I would agree.
Mr. Cosgrove. Medicare needs to save money.
Mrs. Ellmers. Thank you. I appreciate that from all of you.
And, Mr. Chairman, I would like to submit for the record a
statement from the American College of Rheumatology. It is
actually a publication examining reforms to improve the
Medicare part D drug program for seniors.
Mr. Pitts. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mrs. Ellmers. Thank you, Mr. Chairman, and I yield back the
remainder of my time.
Mr. Pitts. The chair thanks the gentlelady.
That concludes the questioning from the Members. The
Members may have additional questions that we will submit to
you in writing. We ask the witnesses to please respond promptly
to the questions that we send you. I remind Members that they
have 10 business days to submit questions for the record, and
Members should submit those questions by the close of business
on Tuesday, July 16th.
Very informative hearing. Thank you very much for your
patience as we had to delay due to floor votes. Without
objection, the subcommittee is adjourned.
[Whereupon, at 12:50 p.m., the subcommittee was adjourned.
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
Today our work continues in the ongoing effort to enhance
the quality of health care for our nation's seniors. We will
examine the Medicare Part B drug program and reform proposals
aimed at improving the important program.
We owe it to our seniors to evaluate the effectiveness of
Medicare and suggest improvements to the program. Earlier this
week, this subcommittee examined Medicare's traditional benefit
design and sought input from experts on how to modernize it.
The Medicare Part B drug program is essential to our
nation's seniors, especially those who are battling cancer. The
invaluable role that these drugs play in the treatment of
chronic illness cannot be overstated. As we look to examine the
program, we must ensure that the program, and seniors' access
to these essential drugs, only continues to get better.
When Congress changed the Part B drug reimbursements to
track their average sales price in 2003, there were questions
as to whether that average sales prices was an appropriate
pricing mechanism. Since then, MedPAC has weighed in on the
issue by noting that Congressional movement to the ASP system
has resulted in substantial price savings for Medicare on
nearly all drugs covered by these reimbursements, and was
contributing to decreased Part B spending.
Recently, members of Congress and the administration have
proposed changes to the Part B drug program. Some of the
changes seek to improve the program; others, like the
president's call to cut physician reimbursements for these
drugs, may not have such positive effects.
As we examine reform proposals to improve the Medicare Part
B drug program, I want to commend all of my colleagues who have
offered such proposals, including Representatives Whitfield,
Green, Rogers, Capps, Lance, Ellmers, and Burgess. I look
forward to hearing testimony on their proposals today.
With that Mr. Chairman, I yield the balance of my time to--
----------------------------------.
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Prepared statement of Hon. Mike Rogers
Thank you Mr. Chairman for holding this important hearing.
The United States is home to the most effective and
successful cancer care in the world, creating an environment
that has resulted in the best cancer survival rates across the
globe.
According to the National Cancer Institute (NCI), overall
cancer death rates have continued to decline in the United
States among both men and women -as well as among all major
racial and ethnic groups -for all of the most common cancers,
including lung, colon and rectum, female breast, and prostate.
However in the last five years, a troubling change in the
delivery of cancer care has begun to emerge - a change that has
been directly affecting not just the continuing rise in the
cost of Medicare, but also the ability for cancer patients to
access treatment.
Since 2008, community oncology clinics have seen the steady
shift from the physician office setting to the hospital
outpatient department (HOPD) as a result of flawed Medicare
payment policies that reimburse hospitals at higher rates than
oncology clinics for the exact same service.
Due to the significant changes in Medicare payment policies
and the eroding revenues to community oncology clinics,
physician practices are suffering from serious financial
difficulties and struggling to keep their doors open.
The most recent Practice Impact Report from the Community
Oncology Alliance (COA) reports that oncology clinics have
closed or consolidated at a 20 percent faster in the past year
than they did a year before - a statistic that should give us
all pause.
In the past year 288 clinic sites closed, 407 practices
were financially struggling and 469 practices had entered into
a contractual relationship or had been acquired by a hospital.
The consolidation of cancer treatment services to the
hospital outpatient setting has serious implications for
patient access especially in rural areas where radiation
therapy is not always available through local hospitals.
Patients may be forced to travel long distances to receive
care, posing a considerable barrier to care for beneficiaries
who require radiation treatment therapy daily for months at a
time.
Moreover, this shift in setting for cancer treatment poses
a threat to the solvency of Medicare as the current disparities
in payment have created incentives for hospitals to buy
physician practices, driving up costs for the Medicare program
and for cancer patients.
Reimbursement should be equal for the same service provided
to a cancer patient regardless of whether the service is
delivered in the hospital outpatient department or a physician
office.
I look forward to working with my colleagues to ensure the
future of community cancer care.
Thank you Mr. Chairman, I yield back.
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Prepared statement of Hon. Frank Pallone, Jr.
Thank you Chairman Pitts, and thank you for holding this
hearing today. Medicare reimburses for prescription drugs in
two settings. Outpatient prescription drugs are covered by
Medicare Part D, while prescription drugs administered in a
physician's office are paid for by Medicare Part B. This is a
critical benefit that allows seniors to have access to
physician-administered drugs which are most commonly cancer
drugs used for chemotherapy and its related side effects or
drugs to treat other serious illnesses.
Congress has debated for years on whether Medicare can save
more money on the drugs it pays for through the Part B program.
Under the Medicare Modernization Act of 2003, to address
widespread spending growth, we changed paying physicians based
off of the manufacturer's Average Wholesale Price (AWP), which
was often inflated, to a payment based on a manufacturer's
Average Sales Price, or ASP. Today, a doctor is reimbursed ASP
+ 6%-an amount much more reflective of the actual price
manufactures receive for their products.
The new system has been working. But according to
stakeholders and industry leaders, challenges with the ASP+6%
reimbursement policy still exist. In addition, some believe
that there is a growing shift from receiving this care in a
community physician setting to a hospital outpatient setting-a
trend which, if based on fact, would have implications to the
overall spending of the Medicare program.
Now, I know there are a number of members of our Committee
who have taken an interest in this area, some who would like
the current system to be amended further. In addition, many
stakeholders, some of who are here today, have outlined
additional challenges with the reimbursement structure of Part
B.
For example, Oncologists are concerned about prompt pay
discounts provided to wholesalers by manufacturers for paying
within a specified time window. These discounts are not
necessarily passed on to physicians when they purchase drugs
from the wholesalers, but do have the effect of lowering the
ASP reimbursement rate. Accordingly, Oncologists would like to
see prompt pay discounts excluded from the ASP calculation. Of
course, when it comes to seriously ill cancer patients, we want
to ensure they have access to the best care and the best drug
for their individual circumstances. So we should certainly
tread with caution if there is credible evidence that lowering
reimbursement could create market disruptions and result in
Oncologist practices closing, thereby limiting Medicare access
for seriously ill cancer patients.
Now, as we all know, sequestration has resulted in a two
percent across the board cut to Medicare. This includes a cut
to Part B drugs. While I believe it is extremely important for
seniors to have access to these lifesaving drugs, I do not
agree with the approach that we should lift sequestration
piecemeal like based on individual member bills. That approach
is simply disingenuous.
I opposed sequestration since it was first conceived. The
idea that across the board, blind cuts could be used as a
vehicle to reduce spending is foolhardy and dangerous. The case
of Part B drugs shows just that. I recognized that
sequestration would have real world effects, which is why I
voted against the set of indiscriminate federal budget cuts. It
is hypocritical that the same Members who voted in favor of the
Budget Control Act of 2011 are now turning around and
introducing legislation to reverse cuts on specific portions of
the system. By pursuing a piecemeal approach to fix
sequestration, we are being asked to place a higher value on
some services than others. These cuts seriously hurt our
economy, debilitate programs Americans rely on, and put our
public safety at risk. Access to Part B drugs by our nation's
seniors is just one example of the negative impact of
sequestration on the daily lives of constituents in every one
of our districts. We need a long term fix that truly addresses
the budget in its entirety.
Thank you.
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