A new discussion draft of health care reform legislation released this past week by the House Tri-Committee (Ways & Means, Energy & Commerce, and Education & Labor) would add oral drugs that do not have an intravenous equivalent to the proposed Medicare bundled payment system for dialysis services.

The existing bundled payment plan already includes oral drugs that are substitutes for IV drugs. If approved, this new inclusion of drugs under the bundle would make it difficult for dialysis clinics to get reimbursement for oral-administered drugs like Amgen Incs, Sensipar, Shires Fosrenol, Genzymes Renvela, and Fresenius Phos-lo, all of which have no IV equivalent. Currently, they are covered under Medicares Part D prescription program.

The real question is how is the [Centers for Medicare & Medicaid Services] going to calculate the incremental costs of these additional agents and increase the bundled payment, said National Renal Administrator Association president Keith Mentz, in his June 26 column in Renal Watch, the Associations weekly newsletter. At least with separately injectable drugs like Epogen, IV iron and IV vitamin D, they have the billing data from the dialysis providers. The dialysis providers were also able to calculate these costs. With these oral agents, unless the patients were on Medicare Part D, CMS has no record of how much of these agents the patients have been taking, and what the costs are.

Even the Medicare Part D data is flawed because many patients stop taking the drugs due to high co-pays [and the coverage limitations] of the donut hole, Mentz wrote. The amount spent on these drugs that will go into the baseline calculation of the bundled payment is not necessarily what the patients were prescribed, only what they actually took.

The vagueness of the statement including oral drugs that are not the equivalent of an intravenous drug opens the door for CMS to throw just about any oral drug they want into the bundle.  This should be a major and troublesome concern for the entire industry and one that needs to be addressed by all renal industry associations, he said.

If drugs like Sensipar arent reimbursed outside the bundle, one nephrologist told NN&I, it could lead to a much higher rate of parathyroidectomies.   

The House plans to start marking up the 850-page draft in mid-July, according to the NRAA.
Other important provisions for ESRD in the proposal included:

• ending the 1% reduction in the market basket update that starts in 2012 and replacing it with a productivity adjustment.  

• extending immunosuppressive drug coverage from 36 months to no time limit for those receiving a transplant under the Medicare program

• changing the phase-in period for the bundle, which would become effective in 2011, so dialysis clinics can join the bundle in 2011, 2012 or 2013.

An additional clause calls for dialysis companies to provide information to the Office of Inspector General relating to any ownership or compensation arrangement between dialysis clinics and the medical director or other physicians.

The Tri-Committee draft legislation can be found at:
http://waysandmeans.house.gov/media/pdf/111/hrdraft1xml.pdf.