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Least Costly Alternative Policies: Impact on Prostate Cancer Drugs Covered Under Medicare Part B

Floor Speech

By:
Date:
Location: Washington, DC

Mr. CALVERT. Mr. Speaker, I rise today to bring to the House's attention a November 2012 report by the Department of Health and Human Services (HHS) Office of Inspector General (OIG), which I requested, titled Least Costly Alternative Policies: Impact on Prostate Cancer Drugs Covered Under Medicare Part B (0E1-12-12-00210). I ask that the Findings, Conclusion and Recommendation of the report be entered into the CONGRESSIONAL RECORD. The full report can be found at: https://oig.hhs.gov/oei/reports/oei-12-12-00210.asp.

In 2004, the HHS OIG concluded that Medicare carriers should apply parity reimbursement to a group of drugs covered under Medicare Part B known as LHRH agonists. This recommendation was in part to remove economic incentives for providers from the prescription process. The HHS OIG further concluded that the implementation of parity pricing for LHRH agonists would produce savings of $40 million per year. Following this recommendation, the Centers for Medicare and Medicaid Services (CMS) encouraged carriers to apply parity reimbursement policies to LHRH agonists. In response to a court decision concerning another class of Part B drugs, CMS withdrew utilization of parity reimbursement for LHRH agonists in April of 2010.

In response to concerns expressed to me that the withdraw of parity reimbursement may have created an unintentional economic incentive for providers to prescribe the costliest drugs in the LHRH class, I requested HHS OIG look into the matter.

In their November 2012 report, HHS OIG found that parity pricing would have saved the Medicare program $33.3 million dollars had it been in place between the third quarter of 2010 and the second quarter of 2011. What's more, $6.7 million of these savings would have been realized by Medicare beneficiaries in the form of reduced coinsurance payments. Additionally, the November 2012 HHS OIG report stated that parity pricing policies may be a useful tool for conserving taxpayer funds in the Medicare program.

Mr. Speaker, given Medicare's current fiscal outlook, it is imperative that policy decisions be made with the program's fiscal health, as well as the patient's health, in mind. I encourage my colleagues to read the HHS OIG report and I look forward to working with my colleagues in Congress to address the OIG's recommendations and ensure the fiscal health of Medicare for generations to come.

FINDINGS
Medicare and its beneficiaries would have saved $33 million in 1 year if LCA policies for LHRH agonists had not been rescinded

If LCA policies had been in effect between the third quarter of 2010 and the second quarter of 2011, payment amounts for Lupron, Eligard, and Zoladex would have been based on that of the least costly alternative, Trelstar. As shown in Table 2, the potential savings per dose in each quarter would have ranged from $1.61 to $33.49 for Zoladex and from $17.70 to $40.85 for Lupron and Eligard.

If the more expensive products had been reimbursed at the lower price in each quarter under review, total expenditures for monthly injections over the year period would have been reduced from $264.6 million to $231.3 million, yielding a total savings of $33.3 million (13 percent). Twenty percent of these savings ($6.7 million) would have been realized by Medicare beneficiaries in the form of reduced coinsurance amounts.

During the year before LCA policies were rescinded, the most costly LHRH monthly injections--Lupron and Eligard--were administered at about twice the rate of the least costly alternative, Trelstar (Figure 1). However, utilization of these pricier drugs was declining during this time, decreasing 11 percent from the second quarter of 2009 through the first quarter of 2010. Meanwhile, utilization of Trelstar was rising, increasing almost 5 percent over the same four quarters.

As shown in Figure 1, utilization patterns for monthly injections shifted dramatically in favor of the costlier products almost immediately after LCA policies were rescinded. Utilization of Lupron and Eligard increased substantially, rising a total of 31 percent from the beginning of the second quarter of 2010 through the end of the second quarter of 2011.

During the same period, the administration of Trelstar plummeted by 74 percent, with the largest utilization drops occurring in the quarter during which the LCA policies were removed and the first full quarter after. By the end of the second quarter of 2011, Lupron and Eligard were administered at almost 10 times the rate of Trelstar.

Although the administration of Zoladex decreased over the entire 27 months under review, utilization remained extremely low relative to utilization of Lupron; Eligard; and, to a lesser extent, Trelstar. However, the overall utilization of LHRH agonists has been steadily decreasing

Despite variations in the administration of individual LHRH agonists, the number of doses of LHRH agonists administered overall for the treatment of prostate cancer began decreasing at least a year before CMS instructed contractors to rescind LCA policies and continued to fall for more than a year afterward. This downward trend was evident not only for the more commonly administered monthly injections, but also for annual implants.

The number of monthly injections used to treat prostate cancer decreased about 7 percent during the year before elimination of LCA policies and continued to decrease another 5 percent in the 15 months after, resulting in an overall decrease of 12 percent from the second quarter of 2009 through the second quarter of 2011. (See Figure 2.)

The overall decrease in the administration of the annual Vantas implant was even more pronounced. The number of these implants used to treat prostate cancer fell by 23 percent in the year prior to elimination of LCA policies and continued to fall another 23 percent in the 15 months after, resulting in an overall decrease of 41 percent

Although the use of LHRH agonists has been decreasing, we did not find a compensatory increase in another type of hormone therapy, the simple orchiectomy. The number of these procedures performed to treat prostate cancer declined 15 percent during the year before the elimination of LCA policies and continued to decline an additional 16 percent afterward.

A study published in 2009 in The Journal of Urology identified a similar reduction in the use of hormone therapy to treat prostate cancer. This study, which examined claims and payment data from 2003 to 2007, attributed the overall reduction in hormone therapy to a number of different factors, including a decrease in Medicare payment amounts following the implementation of the ASP-based reimbursement methodology, the increased use of intermittent hormone therapy, and an increased recognition of the adverse effects associated with hormone therapy. The study authors conclude that these factors, taken together, may have resulted in a more discriminating physician practice pattern and shrinking pool of appropriate candidates for LHRH agonists.

CONCLUSION AND RECOMMENDATION
In 1995, Medicare contractors began using LCA policies to control the cost of LHRH agonists used to treat prostate cancer. However, CMS eliminated these policies in April 2010 as a result of a 2009 court ruling stating that Medicare law did not authorize the use of an LCA policy for an inhalation drug covered under Medicare Part B. Congressman Ken Calvert subsequently raised concerns that elimination of LCA policies for prostate cancer drugs may have provided physicians with an incentive to administer costlier drugs to patients.

Our results indicate that Medicare spending on clinically comparable LHRH agonists is higher in the absence of LCA policies, costing Medicare and its beneficiaries $33 million in 1 year. Our results also confirm changes in utilization patterns for LHRH agonists, some of which appear to have occurred independently of LCA policies and some of which coincided with their removal. Specifically, the use of hormone therapy has been decreasing overall, which may be attributable in part to Medicare reimbursement but may also be influenced by clinical factors, such an increased awareness of hormone therapy's health risks. In contrast, the shift in utilization patterns in favor of costlier products coincided directly with the removal of LCA policies.

LCA policies may be a useful tool for conserving taxpayer funds, provided that patients retain access to appropriate care; however, in light of the 2009 court ruling, LCA policies are not likely to be restored without legislative action. Therefore, we recommend that CMS: Consider seeking legislative authority to implement LCA policies for Part B drugs under appropriate circumstances

By seeking a legislative change to amend the current statutory Medicare provisions applicable to Medicare Part B drugs, CMS could regain the flexibility to implement LCA policies for certain clinically comparable products under circumstances it deems appropriate.


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