Protecting Patients' Health
This post responds to Merrill Goozner's comments, which were highly critical of the Epogen payment policy revisions explained below.
In August, the House took an important step to improve our broken health care system. We passed legislation, dubbed the Children's Health and Medicare Protection (CHAMP) Act, to extend the Children's Health Insurance Program (CHIP) and provide health insurance to 11 million children. Five million of these children are currently uninsured; the other six million are at risk of losing their CHIP coverage if the program expires at the end of the month as current law stipulates.
Though the bill's children's health care provisions have received the lion's share of attention, CHAMP also makes significant improvements to Medicare's benefits for seniors and people with disabilities. It eliminates all co-payments and deductibles for preventive services, reduces co-payments for outpatient mental health services, and enables more low-income beneficiaries to take advantage of programs that help them pay for Medicare's drug costs, co-payments, deductibles and premiums.
In addition, and as part of a broader improvement of Medicare's prevention and treatment efforts for chronic kidney disease, the bill modernizes Medicare's payment policies for services and a particular set of drugs administered to dialysis patients with End Stage Renal Disease (ESRD). These patients suffer from anemia because of their inability to produce enough of the hormone erythropoietin, which helps the body produce red blood cells. They are treated with synthetic versions of erythropoietin, collectively referred to as erythropoietin stimulating agents (ESAs) and sold in the United States for dialysis as Epogen.
When administered at appropriate levels, Epogen is tremendously helpful to the health and well being of ESRD patients. However, when over-prescribed in a way that raises red blood cell levels too high, Epogen can increase patients' risk of death, blood clots, strokes, heart failure and heart attacks. That's why the Food and Drug Administration recently slapped a "black box warning" on Epogen that cautions of adverse consequences and advises against using the drug to raise patients' red blood cell counts above certain levels (36 percent of their blood volume).
Unfortunately, Medicare's current reimbursement system encourages excessively high dosing, threatening patients' safety and costing taxpayers hundreds of millions of dollars. As Merrill Goozner correctly noted in his recent post, Medicare pays dialysis facilities more per dose of Epogen administered than it costs the facilities to purchase the drug. According to the Department of Health and Human Services' Office of the Inspector General, Medicare paid $9.48 per 1000 units of Epogen in the third quarter of 2006, but large dialysis organizations were able to buy it for $8.55.
The average Epogen patient receives 18,700 units of Epogen a week. As a result, large dialysis chains make an average of more than $900 per patient per year from administering Epogen - and the higher they dose, the more money they make!
As a result of this perverse incentive to over-prescribe, and according to the National Institutes of Health, more than half of patients have their red blood cell counts elevated at or above the 36 percent of blood volume considered safe. One in five even go above 39 percent.
That's why I'm bird-dogging this issue and am a critic of the current payment system. In late June, I called a hearing on safety concerns related to the over-prescription of epogen. In July, as part of the CHAMP Act, Charlie Rangel and I proposed modernizing Medicare's ESRD payment system to better protect patients' health.
Echoing recommendations from the non-partisan Government Accountability Office and the Medicare Payment Advisory Commission, we proposed a "bundled" payment system that creates incentives for efficient administration of Epogen. Our legislation directs the Centers for Medicare and Medicaid Services (CMS), which administers Medicare, to implement this new system in 2010 consistent with FDA safety recommendations. In the interim, the CHAMP Act reduces Epogen payments for 2008 and 2009. The American Association of Kidney Patients endorsed our proposal.
The new bundled payment system will remove financial incentives to over-dose Epogen, protecting patients' safety and reigning in overspending.
But it will also guard against equally dangerous incentives to under-dose. Though recent FDA actions focus on the health risks patients face when their red blood cell levels are too high, there is also widespread acknowledgement in the medical community that if patients do not receive enough Epogen and their blood cell levels remain low, they will continue to suffer from anemia.
That's why our legislation includes an array of safeguards to ensure that patients get the right amount of Epogen to manage their disease.
One of these measures is a rigorous reporting and quality incentive system. We need to know if patients are being dosed appropriately, and we have to use both a carrot (quality incentive payments) and stick (public reporting) to make sure that happens. We need to get this reporting system up and running prior to the bundled payment system taking effect, so we know it works and are confident that it will properly track patient care under such a system.
However, because new regulations take time to draft and implement, CMS is not be able to craft such a quality reporting system in time for 2008. Given the health risks associated with over- and under-prescription, and the need to give this reporting system a test run prior to 2010, I believe Congress should try to implement a temporary solution for 2008.
Amgen opposes our proposal for a bundled payment system. Corporate lobbyists for the dialysis industry want an inflationary update - an increase equal to inflation in Medicare's payment rate for dialysis and related services - that is not tied to issues of patient safety. I disagree. The sooner we start on a path toward a quality reporting and incentive system and the sooner we implement a bundled system, the better.
Working with the data available to us - which we know is incomplete, but is the best available - we developed a performance standard for 2008 that calls for patients' red blood cell counts to be between 33 and 36 percent of blood volume.
Wherever a target range is set, there will be variability in patients, and some will naturally fall above and below it. That's to be expected. However, according to Goozner, this temporary standard could lead to some patients getting their blood raised above the FDA's recommended limit of 36 percent.
I did not intend for patients to continue to receive too much Epogen.
My goal is to protect patients by eliminating the existing financial incentives for over-prescription. I am currently working with experts in the field to refine these new guidelines so that they improve patient safety, consistent with FDA's recommendations.
If the 33 to 36 percent of blood volume range needs to be revised, we'll do it on Medicare legislation with the Senate later this year. If it turns out it is impossible to develop for 2008, we'll scrap the temporary performance measure and the bonuses in conference and look forward to CMS' more permanent system starting in 2010.
Does our proposed solution include monetary bonuses for dialysis facilities that raise 92 percent of their patients' red blood cell counts above 33 percent of blood volume? Yes. Why? It's not because of, as Goozner implies, industry lobbying.
Rather, such incentives are like the quality reporting system designed to preempt under-prescription. In addition to establishing a ceiling, we must also establish a floor. Otherwise, dialysis facilities that receive "bundled" payments for treating patients would have an incentive to under-prescribe.
We did not pick the 92 percent goal out of thin air. According to information collected by CMS (for its Dialysis Facility Compare website), 92 percent of patients currently have red blood cell levels at or above 33 percent. Setting a measure at the current average seemed a reasonable approach to give this system a test run. Again, however, if this standard turns out to increase the amount of over-prescribing going on, we will work to change or eliminate it.
This quality reporting and incentive system is just one measure we put in the CHAMP Act to ensure that patients will get high-quality care and a safe and appropriate level of Epogen.
We made sure that dialysis facility payments will be adjusted to account for differences in patient needs. For instance, facilities would be eligible for additional payments on behalf of patients who have higher body mass and might therefore need additional Epogen would be eligible for it. Similarly, reimbursement would take into account patients who may need an unusually high amount of Epogen to appropriately manage their anemia (because they are members of certain racial or ethnic groups or otherwise). And facilities that don't get deep price-breaks on the cost of Epogen, such as small or rural dialysis centers, could also receive higher payments.
We also increased support for patient education for individuals with chronic kidney diseases and for screening and prevention services for patients with ESRD.
The Senate passed a much smaller health care bill than the House. That bill extended the Children's Health Insurance Program (CHIP) to 10 million children, one million fewer than the House. It did not address Medicare at all and, as such, did not revise Medicare's payment policies for Epogen.
House and Senate leaders are working toward a compromise bill, which is likely to focus only on children's health. That being said, the Senate has committed to taking up Medicare later this year.
I will keep working to urge the Senate to adopt the House's Medicare improvements, including those that will protect patients from excessively high doses of Epogen.
I look forward to reading - and responding - to your comments.
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The other point that needs to be made is that the CHAMP Bill once again measures progress in the ESRD program by economic efficiency. This in the teeth of the worse in the world mortality number where over 22% of all people in dialysis die each year.
Congressman Stark I assume you have seen the DOPPS data so you know the canards about US dialysis patients being older and/or sicker has been thoroughly debunked. Apples to apples we have the worse dialysis outcomes in the industrialized world. The CHAMP Bill will exacerbate the poor mortality situation and accelerate the industry consolidation in this country.
The CHAMP Bill makes a bad situation worse and from an ESRD perspective the CHAMP Bill is worse than no Bill at all. The Senate has a better SCHIP Bill.
Bill Peckham
Congressman Stark I thank you for your post and hope this is the first of many. As someone who has been on dialysis for seventeen years and currently serves as the trustee board chair of the not-for profit Northwest Kidney Centers I have a keen interest in this issue.
I watched your hearing last June (online) and I was pleased that members of the Health Subcommittee as well as panel experts favorably mentioned home dialysis. Frequent dialysis was offered as an excellent option for achieving optimal health and quality of life. As someone who has dialyzed frequently at home for the last six years (though tonight I am dialyzing in a hotel in New Hampshire) I am pleaase that the benefits of home frequent dialysis are being recognized.
Although a most worthy goal, it is difficult to align all financial incentives for optimal patient care. I am very concerned about the potential negative consequences of bundling drugs into the dialysis composite treatment. Any such plan should be approached with great care to avoid unanticipated and potentially undesirable outcomes for patients. I have advocated against bundling and will continue to oppose the expansion of the dialysis bundle as it is proposed in the CHAMP legislation.
However I have a much greater concern. HR 3162 would cut 3.5 billion dollars from the ESRD program which would be highly detrimental to optimal patient care. We don't need fewer resources for dialysis we need more resources. We need the funding stability that would come from some sort of inflation update framework, we need universal access to higher doses of dialysis. Dialysis spending isn't the problem. Hospitalization spending is the problem. Dialysis is the solution.
Save Part A money through additional Part B spending. Fight hospitalizations through dialysis. Dialysis is the solution.
Rep. Stark,
I have just one 'simple' question.
Just what is the problem with going to a Canandian or French system which, by all accounts, is more cost effective and comprehensive?
It is no-brainer.
Thank You.
Rep. Stark:
This is an outstanding blog post. You are congratulated for a cogent and thorough argument for your position, one I find acceptable.
However, I am bothered. The proposed law, which you have condensed from cascaded inputs and from the tangled minutiae of its codification, operates in a mixed system of public interest, public financing, private performance, and indirect enforcement. As here have observed, this system is broadly corruptible. The preceding/current process is demonstrably deficient in at least the same ways as your interim improvement. I submit, however, that a succession of marginal and *different* processes to achieve the same straightforward goal works against that goal.
In theory, doctors are motivated best by appeals to their better angels--not greed, not fear of bureaucratic revenge. Meanwhile, caregivers work with patients individually, although outcomes are accumulated statistically. If the law simply stated its goal of improved ESRD outcome, spelled out information defining that goal on a per-patient basis, and excused Mediwhatzis providers from the terms of the old law, charging them to pursue best outcomes for individual ESRD sufferers, is it possible that provider teams could ignore their beancounters and simply provide best-quality service--to each patient, as an individual? Is there enforcement other than fiddling the last few digits of a check or sending an account analyst to each medical storefront?
Compared to the uncountable billions Amgen is grasping for and the uncountable millions they are investing in the best government money can buy, the $700 per patient-year of excess profit clinics get in exchange for degrading patients' likely outcomes seems pitifully small beer. Are we so depraved that the outcome would be hurtful for patients and taxpayers and morbidly engorging for clinics and big pharma?
What are the Canadians, British, and French doing so terribly that their systems are unacceptable and this system of patched patches is "the best in the world"?
Repukes are Fifth Columnists.
Ordinary Americans have to realize that to regain liberty, some blood of patriots, and hopefully, more of these traitors and tyrants, must be shed.
Repukes are NOT Americans. They are an infestation that has to be eradicated.
Dear Representative Stark. Thank you for taking the time to post on this site. Ironically, this is about as close to representative republican government as Americans can get today. We often feel our voices go unheard and it's nice to have the chance to see what's up as well as your insights.
As much as I would like to applaud you for your efforts on this complex issue I do find one small fault that needs more tinkering. You speak of the carrot and stick but fail to extend that carrot to small/and or rural dialysis centers. This is of concern to me as a California resident of Sonoma County. About an hour's drive North from your district, Medical/Medicaid pays something like 10-15% less for patient care than in Marin, S.F., or the East Bay.
This difference has made it difficult to attract physicians to Northern California and other rural areas of our nation. If Price Breaks are to be given, please try to put those rural areas of our nation at the top of the list. To have a government official say something "Could" happen is not very reassuring. Put it in writing please.
The amount of lobbying cash by Amgen on this issue is staggering and combined with the black box warning that the lowest dose needed to avoid blood transfusion should be used is also troubling to me. If simply avoiding blood transfusions is the goal of therapy then this program does not seem pointed in that direction.
You’re right to point out the special needs of rural America. The fact that small dialysis providers are not able to get the same prices as large providers really gets my goat, and even more so now that we see these financial incentives likely putting patients at risk. We want CMS to do the analysis and figure out what kind of payment adjustments are appropriate for small and rural providers. If they need higher payments – and once we know how much – they should get them.
I also understand your concern about the need for physicians in rural communities. I worked closely with Mike Thompson, who represents Sonoma, to fix a problem with geographic variations in reimbursement that is troublesome for doctors in Sonoma and elsewhere in our state and in other parts of the country. We also took several additional steps in the CHAMP Act to help rural docs, including providing bonuses to encourage and reward doctors who practice in areas where there is a shortage of physicians, and ensuring that rural doctors are paid the same rate for their work as their urban counterparts.
national shame that we are the only industrialized country without a national health care system.
national shame that we have 50 million americans with no health care.
national shame that we put profits over health care.
capitalism gone amuck.
most of all national shame we call ourselves a christian nation and put money and corporate profits over the care of our citizens.
do we really understand the message of jesus?
Loved the article. Hard to grasp, though, that people have to incentivized to do the right thing.
My wife and I are middle class Americans. We paid about $2000 last month in taxes. I want my tax dollars to go to things like Universal health care and Home health and infrastructure. Not to Halliburton and bush's corporate cronies or to their foreign misadventures. I'm sick and tired of what they've done to our once great Nation both at home and abroad.
It's time for a big BIG change in DC.
Amen
I find you to be well meaning. But I have suffered through Stark 1 and Stark 2. I find that they have gone largely unenforced, although attorneys have made a bundle telling clients how to work around your Stark provisions. Some provisions if follwed to the letter would make almost any normal business transaction illegal.
Again I have reported Stark violations and no actions were ever taken, putting those trying to follow them at a disadvantage.
The only viable solution in healthcare is to get the insurance companies out who take 50% of the costs and treat no one.
Wal-mart eliminates the middleman and that is capitalism at its best.. but we cant do that in healthcare?
Regards
Regards
Hard to argue with you, Viper.
If I had my way, all of the detailed regulations to the physician self-referral laws would not have been written.
With regard to the real solution on health care, I agree with you too. I support a “Medical for All” plan because Medicare runs on less than three percent administrative costs.
Pete Stark, you are a darling!
After you've tackled the g-d insurance fraud that goes with chronic/acute renal disease, could you please look into more support for those with mental illnesses, those who are considered "throw-aways" by society?
My bro (a true scientist and a brilliant man), is one of your constituents, and I'm envious. I'm in a neighboring district, and you have the respect and honor due you, because you are one of the rare "representatives" of We the People, Pete.
I know. I know...one step at a time.
Keep talking, dear man. Many are listening, especially We the Nurses and We the Parents of the United States.
Thanks for the kind words. I’m honored by the opportunity to represent your brother and California’s 13th Congressional District.
I agree that our health care system should treat mental illnesses no different than physical illnesses. That’s why I worked hard to make sure that the Children’s Health and Medicare Protection (CHAMP) Act would provide for mental health parity in Medicare.
Medicare currently treats beneficiaries with mental illness as second-class citizens, forcing them to pay 50% co-payments in the outpatient setting when all other outpatient services are subject to a 20% co-payment. Through CHAMP, the House voted to eliminate this discrepancy and lower the co-payment for outpatient mental health services to 20%. Now it is up to the Senate to adopt a similar provision in its Medicare legislation later this year.
Tomorrow morning, the Ways and Means health subcommittee I chair is marking up the Paul Wellstone Mental Health and Addiction Equity Act of 2007 (H.R. 1424). This essential legislation would finally provide for mental health parity in the private insurance market. It would require group health plans to offer benefits for mental health and substance abuse that are no different from benefits offered for medical and surgical services.
I like this post, and I have become a fan of Rep. Stark. But I'm also anguished by the post.
First, in politics the "KISS" principle seems to prevail. The assumption seems to be that voters will respond only to slogans and sound-bites, never to substance. If the assumption is sound (and I don't take that for granted), then...
Second, effective governing is complex. We need bright, caring, and well informed persons in elective office to represent us. The more "translation" the public needs, the more intelligent, caring, and articulate our representatives must be. Stark qualifies. "Intertube" Stevens does not.
To quote (approximately?) a line from the movie from which The West Wing spun off, "Democracy requires advanced citizenshi
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Posted September 17, 2007 | 06:20 PM (EST)