Guilford Gliadel Denied Add-On Payments By CMS; New IL-2 Code Proposed

Guilford's Gliadel Wafer does not warrant add-on payments because the product's cost is already reflected in DRG weights, CMS says.

In a ¹ proposed rule on the Hospital Inpatient Prospective Payment System's fiscal 2004 payment rates, the Centers for Medicare & Medicaid Services denied Guilford's request for higher reimbursement for the glioblastoma multiforme chemotherapy treatment.

Guilford argued that Gliadel should be considered a "new" therapy and thus eligible for add-on payments because it was not assigned a specific ICD-9-CM code until October 1, 2002. The product was approved in September 1996.

CMS argued, however, that "the costs of Gliadel are currently reflected in the [diagnosis-related groups] weights, despite the absence of a specific code." Therefore, "Gliadel does not meet our criterion that a medical service or technology be 'new.'"

The proposed rule notes that Gliadel received supplemental approval in February 2003 for use in newly diagnosed patients. "However, our understanding is that many newly diagnosed patients were already receiving this therapy," CMS said. "To the extent this is true, the charges associated with this use of Gliadel are also reflected in the DRG relative weights."

CMS' decision against Gliadel add-on payments has a recent precedent; add-on payments for Pharmacia's Zyvox were denied in August 2002 based on CMS' argument that its cost was already reflected in the DRG weights (² (Also see "Zyvox Medicare “Add-On” Payments Denied; CMS Wary Of Precedent" - Pink Sheet, 5 Aug, 2002.), p. 20).

The proposed rule, which is slated for publication May 21, also addresses payments for high dose interleukin-2 inpatient chemotherapy (Chiron's Proleukin ). The therapy is currently reimbursed under one of five DRGs, which have average charges ranging from $9,128-$16,103.

However, recent industry data "show average charges for these cases of approximately $54,000." CMS is proposing to create a new code for reimbursing high-dose IL-2 under DRG 492, which has an average charge of $55,581.