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TREATMENT INDS SHOULD BE REIMBURSEABLE BY MEDICARE, REP. WAXMAN SAYS IN COVERAGE RULE COMMENTS; PMA, AHA, AMA OPPOSE COST-EFFECTIVENESS CRITERION

Executive Summary

Medicare should provide coverage for Treatment IND drugs in order to ensure their availability to Medicare beneficiaries "on the same terms as [they are] available to other patients," Rep. Waxman (D-Calif.) recommended in a March 29 letter to HHS Secretary Sullivan. "Medicare coverage should be commensurate with the available evidence regarding the appropriateness of the service in question," Waxman said. Coverage for a service should not be withheld in the face of good evidence that it is effective for a limited set of circumstances, simply because there is not evidence of its effectiveness in a broader range of circumstances." The "importance" of the action "has prompted me to take the unusual step of commenting formally on a proposed rule," remarked Waxman, who is chairman of the House Energy and Commerce/Health Subcommittee. The letter served as Waxman's comments on a recent Medicare proposed rule. Published in the Jan. 30 Federal Register, the rule outlined the Health Care Financing Administration's (HCFA's) basis for coverage decisions for all technologies and procedures, including drugs. According to Waxman, HCFA does not need additional authority to extend coverage to Treatment IND drugs or procedures involving them. "I recognize that the Congress, in the Medicare Catastrophic Coverage Act of 1988, has directed you to study the broad issue of covering experimental drugs and report to us by January 1, 1990," he said. "However, in view of the FDA regulation already promulgated on approval of Treatment INDs, I think you should be able to examine this particular aspect of the issue promptly during the consideration of this regulation and should give yourself the authority to cover drugs under a Treatment IND." In March 30 comments on the proposed rule, the Pharmaceutical Manufacturers Association also supported extending Medicare coverage to Treatment INDs. "Medicare coverage should not discriminate against patients receiving Treatment IND drugs," PMA asserted in a letter to Sullivan. Waxman also suggested that an exception for coverage should be extended to "other services or procedures that are in an investigational state of development, and have not yet been widely accepted into standard medical practice." A service or procedure could be covered as soon as its safety and effectiveness is established enough to merit clinical research, the California Democrat suggested. "For example," he said, "coverage might be restricted to specific practitioners who agree to follow a treatment protocol and to make information on the results available to the Department [HHS]." Waxman recommended it would be "reasonable" for Medicare to pick up at least a portion of the cost of certain experimental treatments -- if the procedure is the only one available, or if other treatment options are either "highly toxic or extremely expensive." For experimental treatments that offer "some promise," Waxman suggested that Medicare "at least cover costs up to what would otherwise be expended for routine care, even if the Medicare beneficiary were enrolled in a clinical trial and hospitalized in a clinical study center." While recommending that Medicare be more open to covering new technologies that meet the needs of relatively small patient populations, Waxman also suggested the program should place limits on ineffective or harmful services to protect all beneficiaries. This type of coverage limitation should be be restricted to "breakthrough procedures," Waxman maintained, urging that HCFA's final rule specify "the range of limitations and conditions that might be appropriate" and make it "clear that any service or procedure is a potential candidate for such treatment." Waxman objected to the rule's provisions with regard to coverage decisions left to Medicare carriers. He asserted that carriers are given "too much discretion" in coverage decisions about technologies for which there is no national coverage instruction. In such circumstances, carriers should be "under a stronger obligation" to seek HCFA guidance, he urged. At a March 9 briefing in Washington, D.C. on the Catastrophic Care law, HCFA Bureau of Eligibility, Reimbursement and Coverage Acting Director Kathy Buto pointed out that the agency's position on carrier coverage decisions for off-label uses may change ("The Pink Sheet" March 13, p. 6). She emphasized that the Jan. 30 rule reflected the agency's current procedures and predicted that HCFA "may well" decide to adopt specified medical compendia as guidance on off-label uses for its local carriers. Waxman further noted that HCFA's proposed rule would not obligate administrative law judges to accept the agency's national coverage decisions. "ALJs will typically have little expertise to weigh scientific and medical evidence and should not be given discretion to override a determination," he maintained. HCFA's proposal to use cost-effectiveness as one explicit criterion in Medicare coverage decisions drew the most opposition from others commenting on the proposed rule, including the Pharmaceutical Manufacturers Association, the American Hospital Association and the American Medical Association. PMA urged HCFA to exclude prescription drugs from cost-effectiveness considerations. The association argued that "because of individual patient responses to drug therapy, it is impractical and inappropriate to deny a patient access to an effective drug only because it appears not to be cost-effective in the general population." The American Hospital Association opposed the use of cost-effectiveness, saying the consideration of that factor has an inherent bias against new, high-priced technologies that cost more when first available. The American Medical Association contended that HCFA lacks statutory authority to use cost-effectiveness in coverage analysis, that it is not practical to include this criterion in reviews, and the cost-effectiveness considerations run counter to patients best medical interests. AMS also asserts that there has been no determination of the point at which cost-effectiveness review of a technology is most meaningful. PMA also recommended the establishment of "national prescribing standards" based on "an appropriate combination of FDA approval, authoritative compendia and medical literature." Several commenters representing various segments of the health industry -- including PMA, the Health Industry Manufacturers Association, National Association of Medical Equipment Suppliers and the American Association of Retired Persons -- asked to be included in carrier's utilization review policy development. Earlier this year, the American Medical Association obtained a letter of agreement with HCFA that carriers will consult with physicians in forming utilization review policy.
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