Medical Technology and Practice Patterns Institute, Inc.
Bethesda, Maryland 20814
March 30, 2004

Congresswoman Nancy L. Johnson
Chairman
Subcommittee on Health of the Committee on Ways and Means
U.S. House of Representatives
Washington, D.C.

Dear Congresswoman Johnson:

I am writing to suggest that implementation of MMA include a provision that relevant physiological information be included in future Medicare claims for prescription drugs.  Such a requirement will enhancing the informational content of the health care system and its treatment outcomes of Medicare beneficiaries.

As an example of the usefulness of such information, we are studying --  hematocrit values contained in Medicare administrative databases for purposes of epoetin billing -- to enhance understanding of therapy, outcomes, and cost-effectiveness associated with an expensive drug. Unlike controlled clinical trials, our observational analysis of administrative data must grapple with the confounding effects of unobserved events. If done well, analysis of such information can provide important insight into the 'real-world' risks and benefits of new interventions.

Our work was recently presented at The American Society of Nephrology's (ASN), 36th Annual Meeting & Scientific Exposition conference November 2003, San Diego. The poster (attached) contained a review of our current research on epoetin alfa dosing levels and patient survival.  This information has also been submitted to the Centers for Medicare & Medicaid Services in response to their request (attached) for 'scientific evidence related to EPO (Epoetin) dosing and hematocrit/hemoglobin levels that will assist us in the development of a clinically and scientifically robust policy that will ensure appropriate administration of EPO in ESRD patients.'

Sincerely,

                                                                                                                                                      Dennis J. Cotter
                                                                                                                                                      President
 

Centers for Medicare and Medicaid Services
Office of Clinical Standards and Quality
Baltimore, Maryland 21244
September 22, 2003

To Those Interested in Medicare Coverage of Erythropoietin:

Medicare coverage for erythropoietin (EPO) is  consistent with the Kidney Dialysis Outcome Quality Initiative (K-DOQI) guidelines and the Food and Drug Administration (FDA) approved indications.  K-DOQI recommends management of anemia within a target hematocrit range of 33 to 36 percent.  FDA has approved EPO to treat patients with anemia when it is used to raise the blood hematocrit to a target range of 30 to 36 percent (or the blood hemoglobin to a range of 10 to 12 grams per deciliter).  Neither entity recommends the use of EPO for raising hematocrit levels above 36 percent.

Medicare pays over a billion dollars annually for EPO administered to end stage renal disease (ESRD) patients, with aggregate payments for the drug doubling between 1998 (550 million) and 2001 (1.1 billion).  The law provides a payment formula of $10 per 1000 units of EPO administered to ESRD patients.  There is concern that this payment formula may result in some patients receiving more EPO than is required to maintain their hematocrit level within the target range.  If so, Medicare spending on EPO may be higher than necessary without resulting in optimal patient benefit.

In an effort to reduce potential EPO over-utilization, CMS issued a policy in 1997 instructing Medicare contractors to monitor the hematocrit levels of ESRD patients.  This policy provided for pre-payment review of EPO claims and denial of claims when the 90-day average hematocrit level exceeded 36.5 percent.  Through discussions with clinicians and industry representatives, we learned that  normal fluctuations in hematocrit levels make it  extremely difficult to maintain patients at the upper end of the target range without exceeding the upper boundary of the range. 

Over the past three years, CMS has issued temporary instructions to implement a revised policy that allows more flexibility at the upper boundary of the hematocrit range.  The current instructions prohibit Medicare contractors from performing pre-payment review of EPO claims.  Contractors are instead instructed to perform post-payment review  using a 90-day average hematocrit level of 37.5 percent to trigger further medical review.  It has come to our attention that this policy may be difficult to implement  because of  the administrative burden of continually averaging hematocrit levels.  CMS has also been asked to provide more precise definitions for several critical terms in the existing Program Memorandum AB-02-100.  In addition, we have been asked to revise the point at which facilities may initiate EPO therapy.

For these reasons, CMS will undertake a thorough review of our current policy on EPO utilization in ESRD.  We have established a schedule for this re-evaluation (see table below).  In the meantime, we have reissued the temporary policy in Program Memorandum AB-03-138.  We invite interested parties to send us scientific evidence related to EPO dosing and hematocrit/hemoglobin levels that will assist us in the development of a  clinically and scientifically robust policy  that will ensure appropriate administration of EPO in ESRD patients. 

We encourage all interested experts and stakeholders to participate in this public process by submitting scientific evidence related to EPO dosing, hematocrit levels and ESRD patient outcomes.  Interested parties can submit information to Steve Phurrough, MD, MPA, Director, Coverage and Analysis Group, Centers for Medicare and Medicaid Services, Mail Stop C1-09-06, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.  If you have questions or wish to schedule an appointment to discuss your submittal, please contact Jackie Sheridan-Moore at 410-786-4635 or by email at jsheridan@cms.hhs.gov.

Sincerely,

Sean R. Tunis
Chief Medical Officer