Medicare Plan on Payment for Cancer Drugs Stirs Battle

WASHINGTON – A Medicare proposal to test new ways of paying for chemotherapy and other drugs given in a doctor’s office has sparked a furious battle, and cancer doctors are demanding that the Obama administration scrap the experiment.

The vehement reaction is raising questions about the government’s ability to tackle high drug costs, the top health care concern for the public.

At issue are some of the most expensive drugs for treating life-changing diseases. The question isn’t whether those drugs are fairly priced, but whether Medicare’s current payment policy encourages doctors to prescribe the costliest medications so they can make more money.

Injected and infused drugs for such conditions as macular degeneration, rheumatoid arthritis and Crohn’s disease are also affected.

FILE - In this July 30, 2015 file photo, a sign supporting Medicare is seen on Capitol Hill in Washington. A Medicare proposal to test new ways of paying for chemotherapy and other drugs given in a doctor's office has sparked a furious battle, and cancer doctors are demanding that the Obama administration scrap the experiment. (AP Photo/Jacquelyn Martin, File)

A sign supporting Medicare is seen on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin, File)

Medicare now pays doctors and hospital outpatient clinics the average sales price of a drug, plus a 6 percent add-on, somewhat reduced by federal budget cuts. Naturally, 6 percent of a $15,000 drug is more than 6 percent of a $3,000 drug. But does that influence doctors’ decisions, raising costs for the government as well as those on Medicare?

Medicare officials seem to think so.

The new formula announced last month combines a 2.5 percent add-on with a flat fee for each day the drug is administered. A control group of doctors and hospitals would continue to be paid under the current system.

The experiment could become permanent policy if it lowers costs while maintaining quality. A second wave of experimentation would try to link what Medicare pays for a given drug to how well it works.

Specialist doctors, drugmakers and some patient advocacy groups are trying to compel Medicare to drop the plan. Primary care doctors, consumer groups representing older people, and some economic experts want the experiment to move ahead.

Opponents say if that happens, cancer patients will be forced to go to outpatient hospital clinics instead of their local cancer doctor for the latest and most effective drugs. That’s because smaller, doctor-owned clinics may no longer be able to afford the upfront costs of cutting-edge medications. In rural areas, patients may have to travel long distances to get to a hospital clinic, they say.

Supporters call that “Medi-scare,” a reference to the timeworn political strategy of exaggerating the impact of proposed Medicare changes to frighten beneficiaries.

The rhetoric has escalated.

“It is remarkably insulting that some people today think that cancer physicians in large numbers are saying, ‘What’s the most expensive way I can treat this patient?’ ” said Dr. Allen Lichter, CEO of the American Society of Clinical Oncology, which represents some 20,000 U.S. cancer specialists.

Medicare is making “a dreadful mistake,” added Lichter, who says that many cancer drugs don’t have a low-cost alternative. “It will severely damage oncology practices across the country, and it will not solve what we have long recognized is a serious problem, that cancer drug prices are skyrocketing.”

But Dr. Peter Bach, director of a policy center at Memorial Sloan Kettering Cancer Center in New York, believes Medicare is doing the right thing. Doctors, like other human beings, respond to financial incentives, he said, and the current payment policy sends the wrong signal.

“When drugs are more profitable, both doctors and hospitals tend to use them more,” Bach said.

Change would mean “getting doctors out of the business of profiting when the drugs they use are more expensive” and instead “prescribing drugs based on what’s best for patients,” he added.

Doctors are the gatekeepers of the health care system, and their prescribing decisions can determine the fortunes of new medications. That’s brought the drug industry deep into the Medicare fight. The Pharmaceutical Research and Manufacturers of America, one of the most powerful lobbying groups in Washington, and the Biotechnology Innovation Organization are in the forefront of opposition.

The cost of cancer treatment can vary dramatically with the type of disease; some medications cost tens of thousands of dollars a month.

The drugs in the payment experiment are covered through Medicare’s outpatient benefit, known as Part B, for which most beneficiaries pay a monthly premium of $104.90. Part B drugs cost the program about $20 billion a year. That’s a fraction of what Medicare spends overall on prescription drugs.

Opponents are trying to raise the profile of the issue in Congress. Sen. Charles Grassley, R-Iowa, a critic of the pharmaceutical industry, said he’s already gotten 70 letters from constituents, 59 of them from concerned patients.

“The proposal creates different access based on where a Medicare beneficiary lives,” said Grassley. “The Obama administration should abandon the proposal and go back to the drawing board.”

Medicare’s experiment was designed by the Center for Medicare and Medicaid Innovation, a government agency created by President Barack Obama’s health care law to find ways to improve quality and contain cost.

Obama has less than a year left in office and isn’t facing re-election, so it seems unlikely that his administration would tear up its plan. But the proposal remains open for public comment, and changes may follow.

“If the administration were to pull back, it would be an ominous sign,” said Leigh Purvis, a health policy expert for AARP, which supports the experiment. “We’ve done a lot of talk about prescription drug spending, but we really haven’t moved to the action part. This is really the first time we’ve seen talk translated into action.”

The Associated Press

CMS Finalizes 2017 Payment and Policy Updates to Medicare Health and Drug Plans

SAN JUAN – The Centers for Medicare & Medicaid Services (CMS) has released the final Medicare Advantage and Part D Prescription Drug Program changes for 2017, which seek to provide stable payments to plans and make improvements to the program for plans that provide care to the most vulnerable enrollees.

Factoring in adjustments for the health of patients covered by a plan, the final number works out to about a 3 percent increase for Medicare Advantage and Part D prescription plans. CMS will also implement an interim adjustment to the star ratings to “reflect the socioeconomic and disability status of a plan’s enrollees.” Additionally, the finalized policies “will provide much needed stability to the Medicare Advantage program in Puerto Rico,” CMS’s statement reads.  

money stethoscopeIn response to the release, Resident Commissioner Pedro Pierluisi said, “I and others have been fighting hard to stabilize and strengthen the Medicare Advantage program in Puerto Rico, which provides health insurance to nearly 570,000 seniors and disabled individuals on the island, including nearly 300,000 low-income seniors who are enrolled in both Medicare and Medicaid, which is known in Puerto Rico as Mi Salud.

“Although I am still reviewing the details of the final rule, my preliminary reading indicates that we have achieved a very positive result.  According to a summary released by CMS, ‘CMS will implement a number of changes in 2017 that will significantly benefit Medicare Advantage enrollees in Puerto Rico.’  The summary further states:  ‘As a result of the finalized policies, the expected revenue change for Medicare Advantage Plans in Puerto Rico is 1.25 percent.’  According to one estimate I have received, the final rule will result in an increase in annual funding to Puerto Rico of approximately $430 million per year.  

“Notwithstanding this positive development, there is still much work that remains to be done to ensure that Puerto Rico is treated fairly under federal health programs, whether it be Medicaid, traditional Medicare or Medicare Advantage.”

Medicare also announced a transition period for some employer-sponsored plans that were facing a cut. It will be spread over two years.

“We continue to strengthen Medicare Advantage and Medicare Part D, in particular for enrollees who need additional investments in their health, such as dually Medicare-Medicaid eligible individuals and those with complex socioeconomic needs,” said Acting Administrator Andy Slavitt.


New Analysis: ‘Obamacare’ Coverage Costs Rising

WASHINGTON — Expanded health insurance coverage under the Affordable Care Act, President Barack Obama’s signature legislative legacy, will cost the government more, according to an official study released Thursday. Still, on balance, the measure more than pays for itself.

The nonpartisan Congressional Budget Office said the health care law will cost $1.34 trillion over the coming decade, $136 billion more than the CBO predicted a year ago. That 11 percent hike is mostly caused by higher-than-expected enrollment in the expanded Medicaid program established under the law.

All told, 22 million more people will have health care coverage this year than if the law had never been enacted, CBO said. The measure’s coverage provisions are expected to cost $110 billion this year.

The number of uninsured people this year is anticipated at 27 million.

About 90 percent of the U.S. population will have coverage, a percentage that is expected to remain stable into the future.

The study also projected a slight decline in employment-based coverage, although it will remain by far the most common kind among working-age people and their families.

Employers now cover some 155 million people, about 57 percent of those under 65. That’s expected to decline to 152 million people in 2019. Ten years from now, employers will be covering about 54 percent of those under 65.

CBO said part of the shrinkage is attributable to the health care law: some workers may qualify for Medicaid, which is virtually free to them, and certain employers may decide not to offer coverage because a government-subsidized alternative is available. (Larger employers would face fines if they take that route.)

But the agency also noted that employer coverage had been declining due to rising medical costs well before the health care law was passed, and that trend continues.

The analysis underscores the view that the health care law is driving the nation’s gains in insurance coverage, which raises political risks for Republicans who would repeal it.

Taking seniors covered by Medicare out of the equation, the government devotes $660 billion to subsidizing health care for people under 65, including the Medicaid program for the poor and disabled and tax benefits for employer-provided health insurance.

The budget office did not provide a new estimate of Obamacare’s overall impact on the federal deficit, other than to say that it is, on net, expected to reduce the deficit. The law included a roster of tax increases and cuts in Medicare payments to hospitals and other providers to pay for coverage expansion.

The Obama administration said the report shows that the law is working to cover the uninsured and that the cost projections, when viewed in context, remain positive.

“It’s important to appreciate that the (health care law) is not just about some race to meet a given number of enrollees,” spokesman Aaron Albright said in a statement. “It is about health care in America for all of us as we go through life … affordable insurance is not out of reach because of costs or a pre-existing condition.”

CBO is a congressional agency that does budget forecasts and cost estimates of legislation.

By The Associated Press

Pierluisi Letter Signed by US Legislators Seeks Puerto Rico Medicare Program Improvement

SAN JUAN – Resident Commissioner Pedro Pierluisi wrote to the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), urging them to take steps to stabilize and strengthen the Medicare Advantage (MA) program in Puerto Rico. The letter was also signed by 12 members of the U.S. House and Senate.pierluisi twitter

Three of every four Medicare beneficiaries in Puerto Rico—about 570,000 elderly and disabled individuals—are enrolled in a Medicare Advantage plan, which is the highest penetration rate of any U.S. jurisdiction, according to a statement released Monday

“On February 19th, CMS issued its proposed payment policies for MA plans for Fiscal Year 2017, which begins on October 1, 2016. The federal agency discussed Puerto Rico at length and proposed numerous policy changes that will benefit MA plans and patients on the island. This is a major development, since—in previous years—CMS often declined to make such policy changes to assist Puerto Rico. In the letter, my congressional colleagues and I urge CMS to include the positive proposals it discusses in its preliminary rule in the final rule that it will publish on April 4th,” Pierluisi stated.

The other members of Congress who signed the letter are Sens. Charles Schumer and Kirsten Gillibrand of New York; Sens. Bill Nelson and Marco Rubio of Florida; Reps. José Serrano, Charles Rangel and Nydia Velázquez of New York; Rep. Patrick Murphy of Florida; Rep. Luis Gutiérrez of Illinois; Rep. William Lacy Clay of Missouri; and Rep. John Larson of Connecticut.

In 2015, Pierluisi led two other letters to the HHS and CMS regarding the MA program. Those were also signed by various  senators and representatives.


Sanders Health Plan Would be More Generous than Medicare

WASHINGTON – Democratic presidential candidate Bernie Sanders says his plan for a government-run health care system from cradle to grave is like Medicare for all.

But with full coverage for long-term care, most dental care included, no deductibles and zero copays, the Sanders plan is considerably more generous. Think of it as Medicare on growth hormones.

Setting aside ideological issues, the scope of Sanders’ plan and its lack of detail have raised questions about its seriousness. Some health care experts see it mainly as a political document to distinguish Sanders’ revolutionary ideas from Hillary Clinton’s incremental approach.

Sanders runs the risk of looking “like he is living in a fantasy land, for putting forward an idea he can’t possibly deliver during his term in office,” said Drew Altman, president of the nonpartisan Kaiser Family Foundation.

Last Sunday, the Vermont senator released an 8-page outline of his “Medicare For All” plan, an idea he’s long advocated. The campaign estimates it would cost $1.38 trillion a year, paid for with new taxes that would take the place of private health insurance premiums. Here’s a look at some things Sanders left out:


Medicare doesn’t cover long-term care, not to mention dentures, and seniors face deductibles and cost-sharing when they go to the doctor. Many buy an additional private insurance policy to cover Medicare gaps. “BernieCare,” as it is being called, would be above and beyond.

“It’s not Medicare for all,” said Republican economist Gail Wilensky, who ran Medicare under former President George H.W. Bush. “It’s nonsense to talk about it as if it were. You’re just giving people a comfort level that’s inappropriate.”

Even if there are important differences with Medicare, supporters of Sanders’ plan say it’s similar in the sense that virtually all seniors are covered under that program. Sanders’ approach is also called ‘single-payer,’ because the government would become the steward of the health care system, currently about one-sixth of the economy.


Sanders says his plan will cost $6 trillion less over 10 years than the current health care system. But his path to savings is unclear.

For starters, a government takeover of health care financing would eliminate all the useful signals about value that private payers generate. A few years ago, it became obvious Medicare had a problem paying for home medical equipment when government officials could find the same items on the Internet for much less.

“How do you learn about the value of things if you don’t have an accompanying private sector?” asked economist Paul Hughes-Cromwick of the Altarum Institute, a Michigan-based nonprofit that does research and consulting. “All of a sudden you wouldn’t have an empirical basis on which to build.”

Altman, the Kaiser foundation president, said it’s possible a single-payer system could produce substantial savings, for example by eliminating administrative duplication among insurers.

“I can’t say how big those savings would be from the Sanders plan because all we have is a sketchy outline,” he added. Any significant savings would have to come from reductions in payments to hospitals and doctors, not discussed in the campaign outline.


Back in 2013, the Obama administration famously promised that the president’s health care plan would launch on the same day in all 50 states. But when they flipped the switch, the website didn’t work. Sanders’ plan makes no mention of a phase-in, meaning the government would have to get everything right the first time.

The head of one of the nation’s largest hospital groups said a test of some kind would seem prudent.

“If the nation wanted to experiment, we would be willing to look at the details and consider being supportive – but the details are huge,” said Sister Carol Keehan, CEO of the Catholic Health Association.

As nonprofits, Catholic hospitals are not locked into any particular payment model, Keehan explained. The U.S. could do better. “There is no question a lot of money in the delivery system is poorly spent,” she said.

Sanders’ own state had wanted to implement a single-payer under the umbrella of flexibility encouraged by President Barack Obama’s health care law. But Vermont pulled back after the magnitude of expected tax increases became clear.

“Bernie may have a bigger job on his hands than he understands, trying to get people to just take a look at this,” Keehan said.


Most economically advanced countries with government-run health care set up their systems long ago, but Taiwan’s National Health Insurance is newer, recently celebrating its 20th anniversary.

Princeton University researcher Tsung-Mei Cheng said there are lessons from Taiwan for any country contemplating the move.

Taiwan’s system has been very popular with the public, but the government had to expand the tax base to keep pace with costs. The system does have copays, although they are affordable for most middle-class households. Doctors’ use of costly technologies such as MRIs is closely monitored. And it can take three to five years after expensive new drugs are introduced elsewhere for them to become widely available in Taiwan.

For single-payer to gain acceptance here, Cheng said Americans would have to change their mindset.

“You would have to have a social consensus that health care is a right, and not only everyone should have it, but everyone should have the same,” said Cheng.


Sanders plan –

Medicare Expands Coordinated Care for 8.9M Beneficiaries

WASHINGTON – Medicare is expanding a major experiment that strives to keep seniors healthier by coordinating basic medical care to prevent common problems that often lead to hospitalization, the agency said on Monday.

Officials announced 121 new “accountable care organizations,” networks of doctors and hospitals that collaborate to better serve patients with chronic medical conditions. A limited number will be able to directly recruit patients.

“We do view this as beneficiaries voting with their feet,” said Patrick Conway, Medicare’s chief medical officer. Talking things over with their doctor is the best way for beneficiaries to decide on joining one of the accountable care groups. They can also call Medicare at 1-800-633-4227 to find out if there is a so-called ACO in their community.

ACOs work to improve quality and lower costs. Part of their payment from Medicare is based on how well they meet those goals. It can be as simple as making sure patients receive regular follow-up visits and stay on their medications. Eliminating duplicative tests is another route to savings.

Monday’s announcement means 8.9 million beneficiaries will now be getting their care through ACOs. That’s close to 1 in 4 seniors with traditional Medicare. The total number of ACOs will increase to 477 across the country.

Twenty-one new ACOs will be allowed to recruit patients, and Conway said they’re already starting out with 650,000 beneficiaries.

The ACO’s come in a variety of designs, according to the level of financial risk the groups themselves take on. Conway said organizations that take more responsibility for the bottom line often do better on quality, because they have a greater incentive to keep patients healthy.

Traditionally Medicare paid the bills as they came in from hospitals and doctors. But under President Barack Obama’s health care law, the program is trying to shift to rewarding quality over sheer volume of services. With Medicare’s long-term financial future in jeopardy, much is at stake.

The new approach tries to remake the way medical care is delivered to patients, by fostering teamwork among clinicians, emphasizing timely preventive services and paying close attention to patients’ transitions between hospital and home. The jury is still out on its lasting impact.

By The Associated Press

Medicare to Test if Seamless Social Work can Improve Health

WASHINGTON – Doctors, community workers and social researchers have long recognized a link between the hardships of poverty and health problems.

Now the government is launching an experiment to see if seamless social work can improve the health of vulnerable Medicare and Medicaid recipients, and perhaps even lower costs, by heading off emergency room visits and hospitalizations.

The Department of Health and Human Services on Tuesday announced a five-year, $157 million grant program for as many as 44 organizations that will work to link patients with social services they may need, be that housing, transportation, Meals on Wheels, or help to deal with domestic abuse.

The government is calling the program “Accountable Health Communities.” If it shows promise, it could be expanded nationwide.

Patrick Conway, Medicare’s chief medical officer, said that as a pediatrician he had personally dealt with what experts call the “social determinants of health.” It could be a youngster with asthma whose family lives in a roach-infested apartment, and who keeps going back to the emergency room because substandard living conditions aggravate the disease.

The groups awarded grants under the program will serve as a bridge between participating doctors or hospitals and social service organizations in the community. Medicare and Medicaid beneficiaries will be screened for social needs and – at minimum- referred to agencies that can help. Some patients will get active shepherding.

The grants will be awarded this fall, and the program is expected to commence early next year. President Barack Obama’s health care law gave Medicare and Medicaid broad authority to carry out such experiments. It will be up to Obama’s successor to determine if this one works, and whether it’s worth building on.

By The Associated Press

What’s New for Beneficiaries in a Changing Medicare

WASHINGTON – Whether it’s coverage for end-of-life counseling or an experimental payment scheme for common surgeries, Medicare in 2016 is undergoing some of the biggest changes in its 50 years.

Grandma’s Medicare usually just paid the bills as they came in. Today, the nation’s flagship health-care program is seeking better ways to balance cost, quality and access.

The effort could redefine the doctor-patient relationship, or it could end up a muddle of well-intentioned but unworkable government regulations. The changes have been building slowly, veiled in a fog of acronyms and bureaucratic jargon.

So far, the 2016 change getting the most attention is that Medicare will pay clinicians to counsel patients about options for care at the end of life. The voluntary counseling would have been authorized earlier by President Barack Obama’s health care law but for the outcry fanned by former Republican vice presidential candidate Sarah Palin, who charged it would lead to “death panels.” Hastily dropped from the law, the personalized counseling has been rehabilitated through Medicare rules.

But experts who watch Medicare as the standards-setter for the health system are looking elsewhere in the program. They’re paying attention to Medicare’s attempts to remake the way medical care is delivered to patients, by fostering teamwork among clinicians, emphasizing timely preventive services and paying close attention to patients’ transitions between hospital and home. Primary care doctors, the gatekeepers of health care, are the focus of much of Medicare’s effort.

Patrick Conway, Medicare’s chief medical officer, says that nearly 8 million beneficiaries – about 20 percent of those in traditional Medicare – are now in “Accountable Care Organizations.” ACOs are recently introduced networks of doctors and hospitals that strive to deliver better quality care at lower cost.

“Five years ago there was minimal incentive to coordinate care,” said Conway. “Physicians wanted to do well for their patients, but the financial incentives were completely aligned with volume.” Under the ACO model, clinical networks get part of their reimbursement for meeting quality or cost targets. The jury’s still out on their long-term impact.

Still, a major expansion is planned for 2016, and beneficiaries for the first time will be able to pick an ACO. Currently they can opt out if they don’t like it.

“We’re all trying to understand where is that threshold when things will flip,” said Kavita Patel, a Brookings Institution health policy expert who also practices as a primary care doctor. It could be like the switch from snail mail and interoffice memos to communicating via email, she says, but “I’m not sure we have reached critical mass.”

Glendon Bassett, a retired chemical engineer, says he can vouch for the teamwork approach that Medicare is promoting. Earlier this year, a primary care team at SAMA Healthcare in El Dorado, Arkansas, prevented what Bassett feared would turn into an extended hospitalization. It started with a swollen leg.

SAMA is part of Medicare’s Comprehensive Primary Care Initiative, an experiment in seven regions of the country that involves nearly 400,000 beneficiaries and a much larger number of patients with other types of insurance. The insurers pay primary care practices a monthly fee for care coordination, and the practices also have the opportunity to share in any savings to Medicare.

The primary-care teams at SAMA consist of a doctor, a nurse practitioner, three nurses, and a care coordinator. The coordinator shepherds patients to avoid gaps in care. The nurses can be an early warning system for the doctor.

Bassett said he had a history of circulatory problems in his legs, but this was different. “It was scary,” he said. “Within a week’s time it turned from red to dark.”

He thought about the emergency room, but he got in right away to see the nurse practitioner working with Dr. Gary Bevill, his longtime physician. The nurse fetched other clinicians to look at Bassett’s swollen right leg. He was immediately given antibiotics. And the doctor referred him to a cardiologist for an outpatient procedure that has since improved his circulation.

While the medical treatment may have followed fairly standard protocols, Bassett believes the team approach prevented serious consequences.

“If I hadn’t seen the nurse practitioner when I did, I feel like I would have been in the hospital,” he said. Bassett has since moved to Hot Springs, in another part of the state, but stays in touch.

Medicare is weighing whether to expand the primary care model. Conway said more data is needed.

Other notable changes coming in 2016:

– Hip and Knee Surgery

Joint replacements are the most common surgical procedure for Medicare beneficiaries. Starting in April, hospitals in 67 metro areas and communities will be responsible for managing the total cost of hip and knee replacements. The experiment covers a 90-day window from the initial doctor’s visit, through surgery and rehabilitation. At stake for the hospitals are potential financial rewards and penalties.

Medicare’s goal is to improve quality while lowering cost. But hospitals worry about financial consequences and advocates for patients say there’s a potential to skimp on care.

“What we are discovering with all this change is that trying to get to value over volume is very difficult to do,” said Herb Kuhn, who heads the Missouri Hospital Association.

– Hospice Flexibility

Patients choosing Medicare’s hospice benefit at the end of their lives have traditionally had to give up most curative care.

Under Medicare’s new Care Choices model, patients with a terminal illness will be able to receive hospice services without giving up treatment. A cancer patient could continue to get chemo, for example.

By The Associated Press