[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
PATIENT ACCESS TO SELF-INJECTABLE PRESCRIPTION DRUGS IN THE MEDICARE
PROGRAM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
HEALTH AND ENVIRONMENT
of the
COMMITTEE ON COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MARCH 23, 2000
__________
Serial No. 106-122
__________
Printed for the use of the Committee on Commerce
------------------------------
U.S. GOVERNMENT PRINTING OFFICE
64-029CC WASHINGTON : 2000
COMMITTEE ON COMMERCE
TOM BLILEY, Virginia, Chairman
W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas RALPH M. HALL, Texas
FRED UPTON, Michigan RICK BOUCHER, Virginia
CLIFF STEARNS, Florida EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio FRANK PALLONE, Jr., New Jersey
Vice Chairman SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania BART GORDON, Tennessee
CHRISTOPHER COX, California PETER DEUTSCH, Florida
NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma ANNA G. ESHOO, California
RICHARD BURR, North Carolina RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California BART STUPAK, Michigan
ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York
GREG GANSKE, Iowa TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma GENE GREEN, Texas
RICK LAZIO, New York KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming TED STRICKLAND, Ohio
JAMES E. ROGAN, California DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING,
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
James E. Derderian, Chief of Staff
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Health and Environment
MICHAEL BILIRAKIS, Florida, Chairman
FRED UPTON, Michigan SHERROD BROWN, Ohio
CLIFF STEARNS, Florida HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia PETER DEUTSCH, Florida
RICHARD BURR, North Carolina BART STUPAK, Michigan
BRIAN P. BILBRAY, California GENE GREEN, Texas
ED WHITFIELD, Kentucky TED STRICKLAND, Ohio
GREG GANSKE, Iowa DIANA DeGETTE, Colorado
CHARLIE NORWOOD, Georgia THOMAS M. BARRETT, Wisconsin
TOM A. COBURN, Oklahoma LOIS CAPPS, California
Vice Chairman RALPH M. HALL, Texas
RICK LAZIO, New York EDOLPHUS TOWNS, New York
BARBARA CUBIN, Wyoming ANNA G. ESHOO, California
JOHN B. SHADEGG, Arizona JOHN D. DINGELL, Michigan,
CHARLES W. ``CHIP'' PICKERING, (Ex Officio)
Mississippi
ED BRYANT, Tennessee
TOM BLILEY, Virginia,
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Davenport-Ennis, Nancy, founding Executive Director, Patient
Advocate Foundation........................................ 53
Hash, Michael, Deputy Administrator, Health Care Financing
Administration............................................. 8
Lohrman, Rosalie............................................. 51
Rybicki, Mariellen........................................... 49
Sizemore, Julie.............................................. 46
Steinberg, Earl P............................................ 42
Story, Jane A................................................ 38
Material submitted for the record by:
Hash, Michael, Deputy Administrator, Health Care Financing
Administration, responses for the record................... 69
(iii)
PATIENT ACCESS TO SELF-INJECTABLE PRESCRIPTION DRUGS IN THE MEDICARE
PROGRAM
----------
THURSDAY, MARCH 23, 2000
House of Representatives,
Committee on Commerce,
Subcommittee on Health and Environment,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2322, Rayburn House Office Building, Hon. Michael
Bilirakis (chairman) presiding.
Members present: Representatives Bilirakis, Upton, Burr,
Bilbray, Lazio, Norwood, Pickering, Bryant, Brown, Deutsch,
Strickland, Barrett, and Capps.
Staff present: Tom Giles, majority counsel; Robert Simison,
legislative clerk, Bridgett Taylor, professional staff; and Amy
Droskoski, professional staff.
Mr. Bilirakis. Good morning.
The hearing will now come to order.
Today, as you know, the subcommittee is holding a hearing
to review the Health Care Financing Administration's policy of
coverage, or lack thereof, of self-administrable drugs under
the Medicare program.
Since Medicare was created, the program has covered
physician services and supplies, and I quote, ``including drugs
and biologicals which cannot, in accordance with the
regulations, be self-administered.''
The manual for carriers states that the determination of
whether a drug or biological can be self-administered is based
on the usual underlying method of administration. This policy
has resulted in payment by Medicare for lifesaving drugs needed
by patients who are incapable of self-injecting their
medications.
On August 13, 1997, however, HCFA issued a program
memoranda which significantly narrowed coverage for injectable
drugs. In response, carriers began basing their coverage
decisions on whether the drug could possibly, be self-
administered, without regard to the unique needs of each
patient. This action resulted in a loss of coverage for
patients whose medications were previously covered by Medicare.
Beneficiaries in my home State of Florida were particularly
hard hit by this payment change. After the new policy took
effect, Blue Cross and Blue Shield of Florida attempted to deny
coverage for Neupogen based on the fact that it could be self-
administered, even though it is usually administered by a
physician, in conjunction with chemotherapy.
Congress became increasingly concerned as more and more
claims were denied as a result of HCFA's actions. In response,
Section 219 of the Consolidated Appropriations Act was enacted
into law last year to prohibit the Agency from carrying out the
program memorandum or from restricting coverage of self-
injectable drugs in any way beyond the policy effective prior
to August 13, 1997.
Unfortunately, and I say this, with our good friend, Mr.
Hash, here, I don't know if he takes this personally, or not,
but maybe in a way he should. The point is that, unfortunately,
it took HCFA over 4 months to inform carriers that the pre-
August 1997 policy should be reinstated. By law, that
communication should have been made last November.
Ironically, the administration has proposed dropping
coverage for these lifesaving drugs at the same time that
Congress is considering ways to expand, as you know, access to
affordable prescription drugs for all Medicare beneficiaries.
Not surprisingly, there has been bipartisan, bicameral
opposition to the proposed changes. Along with several of my
colleagues, I wrote Secretary Shalala last October, to request
information regarding the rationale for the administration's
policy. We did not receive the courtesy of any reply until late
yesterday evening.
Those Members who signed the letter were trying to get
answers for constituents who are being denied coverage for
critical medications. However, the administration simply
ignored the congressional request for over 5 months until this
hearing was scheduled. Actually, I should say, that it ignored
the congressional requests.
In my opinion, this inaction demonstrates an utter lack of
concern for the patients affected by these proposed changes.
I would note that the President's budget proposal includes
a provision to allow HCFA to move forward for the development
of a proposed rulemaking process on injectable drugs. I am
interested to learn why the administration believes such a rule
is needed now, over three decades after the Medicare statute
was enacted.
The impact of this policy change by HCFA is not limited to
Medicare beneficiaries. Decisions about Medicare policy often
set precedent for policy in the private health care market and
our Nation's entire health care system. That is why today's
hearing is so important.
I do want to thank all of our witnesses for appearing
before the subcommittee to discuss this important issue, and I
particularly appreciate the time and effort of the patients and
patient advocates who will share their experiences with us. For
them, the outcome of this debate will have significant personal
consequences. I am sure we all look forward to hearing their
testimony.
I yield to Mr. Brown for his opening statement.
Mr. Brown. Thank you, Mr. Chairman.
We have choices today about what this hearing will be
about. We can make use of this hearing to blame HCFA. We could
somehow try to pin blame on the administration, rather than on
Congress, for ambiguous language written into the Social
Security Act of 1965 regarding self-administered medicines. The
press loves it when we point fingers.
We could chastise HCFA for reiterating in a 1997 memorandum
required to address the specific coverage issue an
interpretation of the law that actually dates back to the
1980's. It is a misplaced criticism, but that has never stopped
us before.
We could scold HCFA for allowing several months to pass
before issuing a statutorily required clarification memo. I am
not sure Congress has room to talk when it comes to creating or
getting mired in red tape, and I'm sure HCFA has an explanation
for the delay, but we should not let the facts get in the way
of a good story.
We could question HCFA's plans to issue a proposed rule on
the meaning of the statutory term ``self-administered'', even
though it made perfect sense for Administrator DeParle to
recommend this step.
Why anyone in their right minds would believe HCFA for some
reason has it out for certain individuals who use self-
administratable prescription drugs is beyond me. Nonetheless,
we could take all our frustrations out on the agency. It would
not be the first time.
Or we could get to what really matters: Should individuals
who require a doctor's assistance to administer an otherwise
self-injectable drug receive coverage under Medicare for that
drug? From a policy perspective, I firmly believe Medicare
should cover these individuals' costs, regardless of the
reasons behind their inability to self-administer a needed
medication.
A major goal of this hearing should be to clarify what, if
any, actions are necessary to ensure that any Medicare
beneficiary who needs but cannot self-administer one of these
drugs have the same access as those who require drugs that are
not self-administratable.
Speaking of equitable access, it would be irresponsible to
assert that certain Medicare beneficiaries should receive
coverage for certain medically necessary prescription drugs
without mentioning that all Medicare beneficiaries should
receive coverage for all medically necessary prescription
drugs.
I am sure most of you have seen the Committee on Ways and
Means press release in which Chairman Thomas, surprisingly
enough, takes credit for convincing the Clinton administration
to reverse its position on access to self-injectable drugs, no
matter that HCFA had already determined it would solicit
comments, or that this hearing was already scheduled when
Chairman Thomas sent his letter to HCFA.
What I found most ironic was that Chairman Thomas chastised
HCFA for, in his words, ``carelessly limiting seniors'
prescription drug coverage.''
Let us talk about ``careless.'' Careless is abiding a
Medicare program that covers some of the prescription drugs
required by a small subset of patients, but ignores the
prescription drug needs of the rest of the Medicare population.
Careless is ignoring the prescription drug issue until forced
by politics in an election year to pay attention. Careless is
promoting a stopgap solution to a broad-scale and growing
problem. Careless is lashing out at HCFA for dragging its feet
on a single policy while Congress drags its feet on an issue
that has thrown millions of seniors into crisis.
A third of all seniors have no drug coverage. Millions more
are underinsured. Employers are dropping retiree coverage.
Private health insurers are cutting back the prescription drug
benefits.
This is not an isolated or static problem that could be
solved in a piecemeal fashion. It is broadbased, and it is
getting worse. Ideally we would leave this meeting today not
only confident that Medicare will cover injectables, which it
should when a doctor must administer them to the patient, but
also confident that the self-injectable issue will soon be
moot.
The Medicare program covers hospitalization, it covers
doctor's visits, and it should cover prescription drugs,
period. I expect this hearing to resolve potential problems for
individuals who should be eligible for coverage of self-
injectable medications. I hope this hearing also takes us a
step closer to Medicare prescription drug coverage for all
senior citizens.
Mr. Bilirakis. Maybe you would not know it, but we are very
close friends.
Mr. Brown. That is true.
Mr. Bilirakis. I would remind the gentleman, though, that
the problem of lack of prescription drugs for Medicare
beneficiaries has been a longstanding problem. It is only
recently when any Congress--certainly not during 40 years when
the gentleman's party controlled the Congress--and he was not
here for much of that time--had any concern for prescription
drugs for Medicare.
I would now yield to the gentleman from Tennessee, Mr.
Bryant.
Mr. Bryant. Thank you, Mr. Chairman, for your comments, and
also for holding this hearing. I was very carefully watching
the doors as my time came, because I am going to have to leave
and be in and out today with other commitments. I very much am
interested in what is said today. I think these are very good,
very complex issues we have to deal with.
I certainly want to hear from people who are experts by
virtue of their experience, whether it is a life experience or
having to go through this type of medical situation, or whether
they are experts educationally, from HCFA and all around.
But I was going to be brief in my remarks because I was the
last one and we can get to the panels quicker, but we have had
two members come in since that time, so I can take 10 or 15
minutes, I guess, now.
Mr. Bilirakis. Take your full 5 minutes, Mr. Bryant.
Mr. Bryant. I am concerned about this. I do want to hear
the testimony. I am in the process of reading the testimony of
the witnesses. This is an important issue. It is one that--I
might just reiterate what our chairman said, that this issue
has been around since the beginning of Medicare. It did not
cover drugs, and I think everybody in Washington over the years
that this program has been in existence has had the opportunity
to change that.
We are now, in this Congress, attempting to I think fix a
very valid problem there for those people, especially 35
percent of the people, senior citizens, who do not have drug
coverage.
We do not want to rush to judgment, so to speak. We do not
want to go through this process of discharge petitions and
things just so we can get something out quickly that might not
be right, or that we might try to embarrass somebody
politically. We want to do it right.
I think through hearings like this--and I realize it is a
limited hearing, it is not going to be focused on the bigger
problem, but I think this adds to that. I think one quick step
from this hearing is what are we going to do about those new
drugs that are being or have been discovered since 1997 that
would fit into this category that are very good drugs, but
probably are going to be quite expensive. That is going to have
to be considered when we write our drug bill.
I continue to hope the best in Congress; that we can keep
politics, even though this is an election year--that we can
keep politics out of this issue as much as possible. There is
no Republican way, there is no Democrat way on this. I think
there is an American way. I think there is a right way for the
American people, particularly our senior citizens.
Again, I am rambling on now. I am going to stop, because I
still have hope that I can hear some of the testimony before I
have to leave at 11 o'clock. I yield back the balance of my
time.
Mr. Bilirakis. Mrs. Capps?
Mrs. Capps. Good morning, Mr. Chairman. Thank you for
holding this hearing. I send a welcome to all of the witnesses
testifying before us today.
Today's hearing addresses one of the most critical needs of
our Nation's seniors, drug coverage. I am glad we are looking
at one aspect of this issue today. I would urge the Chairman
that we do more. It is not a partisan issue.
Mr. Chairman, my district has a large senior citizen
population. Many of these seniors rely on lifesaving therapies
like the injectable drugs in issue at today's hearing to treat
cancer, organ transplants, kidney failure, the side effects of
chemotherapy, and other serious conditions. Many certainly
cannot afford to pay for these self-injectable medications,
which can cost up to $10,000 per year. Even if they could
afford to pay for them, many of these seniors are often so
elderly or sick that they cannot safely administer the drugs
themselves.
I am glad to hear of HCFA's recent action, but I urge them
to take action to extend that ruling permanently. I have to
call to mind a dear friend of mine, an elderly man who was our
church organist for many years.
He became very ill and was in critical care in a hospital
for a while. He was able to be discharged, and was thrilled to
go home. Then he discovered that the injectable that he needed
to sustain him, which could be given at home, would not be
covered by Medicare. It was so expensive he had to return to
the acute care facility for a period of extended time, many
weeks, solely to get this treatment. It is not a good use of
our resources.
Recently I cosponsored H.R. 2892, introduced by my
colleagues, Jay Inslee and Jennifer Dunn. This bill would
require Medicare to cover self-injected biologics prescribed in
lieu of a drug already covered by Part B. It would provide a
patient with a choice between the intravenous in-office therapy
or the self-injected therapy, depending on what is best for the
patient.
Because of the savings from eliminated costs associated
with in-office administration, this bill is basically budget-
neutral. Some have even speculated that covering some self-
injected products will actually save the Medicare program
substantial dollars. I would hope that the committee would move
this legislation soon.
As a nurse, I am particularly concerned that lack of access
to drugs, to prescribed drugs, could be compromising seniors'
health. In fact, I fear that it actually does. I believe this
is one of the most critical issues facing our country's health
care today.
I happen to represent a district where Medicare HMOs have
been pulling out because of ridiculously low reimbursement
rates. Of course, seniors are the ones who are truly hurt by
all of this. They are the ones that have their lives disrupted
when an HMO drops them. They are the ones who lose their
prescription drug coverage and are forced to pay the full price
for their medications out of their own pocket.
Many seniors simply cannot afford the high prices, so
instead they take half the prescribed dose, or they just do not
even buy these lifesaving medications because they cost too
much.
We all know that today's prescription drugs are literally
miracle drugs, and we cannot imagine quality health care
without them. So while I am glad that we are holding this
hearing today, I am very disappointed that this Congress has
yet to address the issue of a Medicare drug benefit in any
meaningful way.
Thank you, Mr. Chairman. I yield back my time.
Mr. Bilirakis. I thank the gentlewoman.
Mr. Upton from Michigan.
Mr. Upton. Thank you, Mr. Chairman. I know we are going to
have a vote on the Journal in just a few minutes, so I am going
to put my statement into the record.
I just want to welcome our witnesses today, particularly
Mr. Hash, who has done, I think, a pretty remarkable job in his
role at HCFA.
One of the things that I intend to focus on is on the
differences between States in reimbursing individuals, both
under Medicare and Medicaid. I look forward to the testimony,
and I yield back.
[The prepared statement of Hon. Fred Upton follows:]
Prepared Statement of Hon. Fred Upton, a Representative in Congress
from the State of Michigan
Mr. Chairman, thank you for holding today's hearing on Medicare
patients' access to self-injectable drugs. As a fellow member of the
Chairman's task force on prescription drug coverage, I know that we
share a deep concern about the burden that prescription drug costs
place on the millions of Medicare beneficiaries who do not have any
insurance coverage for prescriptions. No senior citizen should be
forced to forego needed medication, take less than the prescribed dose,
or go without other necessities in order to afford life-saving
medications. Our nation leads the world in the development of new drugs
and medical devices that enable us to effectively treat diseases and
conditions. But if people cannot afford to buy these drugs, their
benefits are lost to many in our population.
Until we can get a plan in place, it is important that we permit
seniors who are getting a little assistance now under the Medicare
program with their prescription needs to keep that assistance. I want
to know what prompted the Health Care Financing Administration to issue
a program memorandum to its Medicare carriers substantially tightening
a long-standing policy that permitted Medicare carriers to cover some
self-injectable drugs.
I want to raise a related issue, too. Last year, I was contacted by
a constituent suffering from carcinoid cancer. Her physicians at the
Mayo Clinic prescribed a drug that can be a self-injectable. They told
her that if she lived in Minnesota, Medicare would cover the drug, but
that the Medicare carrier for Michigan, Wisconsin, and Illinois had
elected not to cover it. I investigated this situation and found that
was in fact the case and that Medicare carriers apparently have a lot
of latitude in making these determinations.
Michigan later decided to cover this drug, and I believe that there
may now be a national coverage policy in place on it. But this case is
still very troubling to me. My Michigan constituents pay the same
premiums as beneficiaries in Minnesota and other states whose carriers
elected to cover this drug. I can see state by state variations 'in
coverage policies in the Medicaid program, but not in the Medicare
program, which is fully federally financed and national in scope. I'm
going to try to get some answers today.
Mr. Bilirakis. I thank the gentleman.
The opening statements of all members of the subcommittee
are made part of the record.
Mr. Norwood.
Mr. Norwood. Mr. Chairman, thank you for holding the
hearing. We do thank our witnesses. As might be a little
unusual, I will simply submit my opening statement for the
record this morning, and give you a break.
[Additional statement submitted for the record follows:]
Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
I want to thank the Chairman of the Health and Environment
Subcommittee, Mr. Bilirakis for convening this hearing today. The issue
of providing Medicare beneficiaries with access to prescription drugs
is an issue this Committee is committed to addressing.
This is the fourth hearing this Subcommittee has conducted to focus
on Medicare beneficiary access to prescription drugs. The Committee has
invited the Health Care Financing Administration to testify three times
on this topic. While I mean no disrespect to Mr. Hash, who formerly
served on the staff of this Committee, I am disturbed that the HCFA
Administrator, Nancy Ann Min DeParle, has been unavailable to attend
any of the prescription drug hearings to which she has been invited.
She is the head of HCFA, and it is her signature on the letters I have
here explaining why Medicare will no longer cover certain life-saving
drugs that it had previously provided coverage for.
We can all agree that no one would design a health care benefit
today that did not include access to prescription drugs. This is just
one significant area where the Medicare program doesn't measure up--
particularly when compared to the health benefits we all enjoy working
here in the Congress. I've been spending a lot of time studying this
issue, and I agree with all my colleagues that we should do something
to help seniors access affordable prescription drug coverage.
As I've already said, we've had three hearings on the larger issue
of outpatient prescription drugs and we are working on addressing that
issue. But that is not the topic of today's hearing.
We are here today to address the concerns of those patients who
have had coverage for certain medications in the past, but due to a
policy change by HCFA, no longer have that coverage. Since the Medicare
program's inception 35 years ago, certain injectable drugs and
biologicals have been covered when those drugs were administered by a
physician in his or her office. Up until 1997, patients in need of
these life-saving therapies had some comfort in knowing that, in almost
all cases, they would have access to them. On August 13, 1997, HCFA
effectively reversed this long-standing policy by issuing a Program
Memorandum which caused Medicare carriers to discontinue coverage for
these drugs and biologicals.
Not only did Medicare beneficiaries see their coverage curtailed,
but some private health insurers began to follow suit and started
denying coverage as well.
Recognizing that HCFA's Program Memorandum was resulting in a
change in coverage policy that was having a devastating impact on
patients in need of these drugs, Congress directed HCFA to reinstate
the coverage policy that had existed prior to the August 13 Program
Memorandum. Subsequently, President Clinton in his FY 2001 Budget
request, proposed that the action taken by Congress last November and
approved by the President be repealed.
I was pleased that last Friday, on St. Patrick's day, HCFA finally
complied with the law that Congress passed to ensure that people with
Cancer, Multiple Sclerosis, AIDS and other diseases will once again
have access to the lifesaving drugs they need.
For as long as Medicare has been on the books it has paid for these
drugs. For reasons unbeknownst to me and many of my colleagues, HCFA
began restricting coverage in August of 1997. I am further baffled as
to why it has taken the Administration four months to comply with the
law, and restore coverage for these life saving drugs. As we will hear
from today's brave witnesses, this policy has had a direct impact on
patient care. I believe this is unacceptable. The American people
deserve better. The patients we will hear from today deserve better.
I have some specific questions for Mr. Hash today that I'd like to
just highlight now. I'd like to know why HCFA decided to change a 33
year old policy in favor of one that denied patients treatment that
Medicare had previously paid for. I'd like to know why it took HCFA
four months to comply with a law passed last November instructing them
to return to the previous coverage policy. And I'd like to know what
the Agency intends to do next October when current law expires. I
welcome Mr. Hash here today, and hope he can provide this Committee
with some answers to these questions.
Finally, I particularly want to thank the witnesses on our second
panel for making the trip here to the Nation's Capitol to tell us their
stories. I welcome you and appreciate how important this issue is to
you and your families.
Mr. Bilirakis. It is somewhat unusual.
Mr. Hash, if you will come forward, sir.
Mr. Hash, as we all know, is Deputy Administrator of Health
Care Financing Administration, based here in Washington.
Michael, it is always great to have you here. Hopefully you can
help us out on some of these things that concern us.
Please proceed. We set it at 10 minutes. Obviously, do the
best job you can.
STATEMENT OF MICHAEL HASH, DEPUTY ADMINISTRATOR, HEALTH CARE
FINANCING ADMINISTRATION
Mr. Hash. Thank you, Mr. Chairman.
Chairman Bilirakis, Mr. Brown, and other distinguished
members of the subcommittee, I want to thank you for inviting
us here today to discuss Medicare's coverage for self-
administered drugs.
The current situation, as all of you recognize, presents a
really compelling example of why we must modernize the Medicare
program with an affordable, comprehensive outpatient
prescription drug benefit.
Medicare coverage for pharmaceuticals is now severely
restricted outside of hospitals and nursing facilities.
Congress has created only a limited number of exceptions
outside of those settings in the law. One exception is for
drugs that cannot be self-administered. The statute says
Medicare must pay for drugs that cannot be self-administered
when furnished as part of a physician's professional services.
Medicare's longstanding policy for coverage under this
exception has addressed only whether a drug can be self-
administered, not whether an individual patient can self-
administer the drug. Congress has not provided an explicit
exception for those who cannot self-administer drugs that
generally are self-injectable.
The shortcomings of such a policy become clearer every day
as we witness the new advances in drug therapies that are so
important to patients' lives. Medicaid, and of course most
private insurers, pay for all prescription drugs, regardless of
whether they are self-administered. The current policy in
Medicare is most troubling for conditions such as multiple
sclerosis, where some patients can administer their drugs and
others cannot. It is enough of a burden to cope with the
effects of such a debilitating disease without having in
addition the worry of how to pay for expensive drugs.
Mr. Chairman, I think we all agree that the current
limitations on Medicare coverage for self-administered drugs
leave some beneficiaries without the medications they need.
However, we are scheduling town hall meetings now, as directed
by Congress, to allow all interested parties to air their
concerns about the current situation, and to discuss available
options, such as regulatory action to expand coverage for those
who cannot self-administer drugs. Our first town meeting has
been scheduled in Baltimore on May 18.
However, regulatory action to create another narrow
exception allowing coverage for only some beneficiaries may not
be the best solution to this problem. This approach could
compound the current inequities that exist in our coverage
policy.
Our clinicians at HCFA are concerned that such a narrow
exception could create ethical dilemmas for compassionate
physicians treating patients who can self-administer but who
cannot afford the drug. This issue is in fact, as all of you
know, a very small part of a larger problem for which patchwork
solutions simply will not suffice.
As many Medicare beneficiaries lack prescription drug
benefit coverage today as senior citizens lacked hospital
coverage when Medicare was created in 1965. The program's
current coverage restrictions leave many beneficiaries without
coverage they need, not just those who are unable to self-
administer drugs. We need to expand coverage to all
beneficiaries. Patchwork solutions and limited exceptions
cannot address a problem of this magnitude.
All beneficiaries, regardless of their health, their
income, need access to an affordable, comprehensive outpatient
drug benefit, as has been proposed by the President. Mr.
Chairman, we look forward to working with you on this critical
issue.
I do want to say, in response to your opening statement,
Mr. Chairman, that we always try to be very responsive to any
inquiry that you might make. I did write you myself, in
response to your October letter, on November 3rd, where I
attempted to lay out what Medicare's coverage policy was for
self-injectable drugs, and I also indicated that we were
working on a regulation to review the options that might be
available for us to address this problem more adequately.
Thank you for your invitation for us to be here. I would be
happy to answer any questions that you or other members of the
subcommittee may have.
[The prepared statement of Michael Hash follows:]
Prepared Statement of Michael Hash, Deputy Administrator, Health Care
Financing Administration
Chairman Bilirakis, Congressman Brown, distinguished Subcommittee
members, thank you for inviting us to discuss Medicare coverage for
self-administered drugs. The current situation provides a compelling
example of why we must modernize Medicare with an affordable,
comprehensive, outpatient prescription drug benefit available to all
beneficiaries.
Medicare coverage for pharmaceuticals is now severely restricted
outside of hospitals and nursing facilities. Congress has created only
a limited number of exceptions, each spelled out in the law. One
exception is for drugs that cannot be self-administered. Section 1861
(s)(2)(A) of the statute says Medicare may pay for drugs ``which
cannot, as determined in accordance with regulations, be self-
administered'' when furnished ``as an incident to a physician's
professional services, of kinds which are commonly furnished in
physicians' offices and are commonly either rendered without charge or
included in the physicians' bills.''
Medicare's longstanding policy for coverage under this exception
has addressed only whether a drug can be self -administered, not
whether an individual patient can self-administer the drug. And
Congress has not provided an explicit exception for those who cannot
self-administer drugs that generally are self-administered.
The shortcomings of such a policy become clearer every day with
dramatic new advances in drug therapies. Medicaid and most private
insurers pay for all prescription drugs, regardless of whether they are
self-administered. The current policy is most troubling for conditions
such as multiple sclerosis, where some patients sometimes can
administer their drugs and others cannot. It is enough of a burden to
cope with the effects of such a disease without the worry of paying for
expensive drugs.
We all agree that the current limitations on Medicare coverage for
self-administered drugs leave beneficiaries without the medications
they need. However, regulatory action to create limited exceptions
allowing coverage for only some beneficiaries may not be the best
solution to this problem.
Our clinicians at HCFA are concerned that creating such a narrow
exception to the ban on Medicare coverage for outpatient drugs could
create an ethical dilemma for compassionate physicians when caring for
patients who can self-administer drugs but cannot afford the drugs they
need. This approach could compound the current inequities in coverage,
and may also create program integrity problems.
This issue is, in fact, a small part of a much larger problem for
which patchwork solutions will not suffice. As many Medicare
beneficiaries lack drug coverage today as senior citizens lacked
hospital coverage when Medicare was created. All beneficiaries,
regardless of health or income, need access to an affordable,
comprehensive outpatient drug benefit, as has been proposed by the
President.
BACKGROUND
Like many specific coverage policies in Medicare's history,
determination of whether a specific drug could be self-administered has
been left up to the medical directors of each claims processing
contractor. Instructions to Medicare claims processing contractors on
this issue have been provided through the Medicare Carrier Manual and
were updated in 1995. Those instructions state that drugs may be
covered only if they ``are of the type that cannot be self-
administered.''
The question of whether a drug could be ``self-administered'' was
self-evident when Medicare was created in 1965. A pill was self-
administered, most injections except for insulin were not, so
regulations defining ``self-administered'' were not promulgated. But
now, dramatic advances in drug therapies have changed the medical
landscape. Cancer drugs, for example, that had been available only as
injections have become available in pill form.
Congress recognized some of these changes in technology in the
Omnibus Budget Reconciliation Act of 1993 by authorizing Medicare
coverage for certain oral anticancer drugs that contain the same active
ingredient as an injectable drug that would be administered by a
physician. The law also allowed for coverage of self-administered anti-
emetic agents necessary for proper absorption of oral anticancer drugs
covered under this provision. And it provided for coverage of clotting
factors that hemophiliacs self-administer to control their condition.
Congress, however, has not created exceptions in the law to
accommodate other compelling situations. Pharmaceutical advances are
allowing more types of patients with different types of diseases to be
successfully taught to administer drugs they need themselves. But some
of these new agents are for conditions, such as multiple sclerosis,
that create an unfortunate dilemma. Many of these patients can self-
administer drugs. But others, especially those in later stages of the
disease, are so debilitated that they cannot administer the drugs
themselves.
We issued a memorandum in August 1997 clarifying the guidance in
our carrier manual to emphasize that Medicare claims processing
contractors may cover generally self-administered drugs when a provider
is administering the drug in order to teach a patient how to self-
administer. We did this to encourage more coverage in these situations.
The memorandum also reiterated the long-standing policy that an
``individual patient's mental or physical ability to administer any
drug'' may not be taken into consideration.
Because of continuing concern over this issue, we had planned to
publish a proposal in the Federal Register exploring options and
requesting public comments on ways to define ``self-administered''
through regulation. One option would have been to possibly expand
coverage by taking individual patient conditions into account.
Unfortunately, some observers misinterpreted our plans for a proposal
in the Federal Register as an effort to further restrict coverage.
This series of events led to inclusion of language in the
Appropriations Act of 2000 in which Congress barred use of HCFA funds
to carry out the transmittal of the August 1997 memo. The
appropriations language also prohibited us from promulgating ``any
regulation or other transmittal or policy directive that has the effect
of imposing (or clarifying the imposition of) a restriction on the
coverage of injectable drugs under section 1861(s)(2) of the Social
Security Act beyond the restrictions applied before the date of such
transmittal.''
We therefore postponed our proposal to solicit public comments on
options in the Federal Register to avoid the appearance that we are
attempting to restrict coverage in violation of the appropriations
language. We have also suspended our 1997 memorandum and, as required
by the law, alerted our contractors that current guidance on this
matter is limited to instructions issued to them before the 1997
memorandum. We also are scheduling town hall meetings, as directed by
Congress, to allow all interested parties to air concerns about the
current situation and discuss available options. The first is set for
May 18 in Baltimore.
We all agree that the current situation is not acceptable. The best
solution is to provide all beneficiaries with access to affordable and
comprehensive coverage for outpatient prescription drugs.
Need for Comprehensive Drug Benefit
Prescription drugs are as essential to modern medicine today as
hospital care was when Medicare was created. Yet as many beneficiaries
lack drug coverage today as senior citizens lacked hospital coverage
then. Three out of five lack dependable coverage. Only half of
beneficiaries have year-round coverage, and one third have no coverage
at all.
Beneficiaries without drug coverage must pay for essential
medicines fully out of their own pockets, and are forced to pay full
retail prices because they do not get the generous discounts offered to
insurers and other large purchasers. The result is that many go without
the medicines they need to keep them healthy and out of the hospital.
This year more than half of Medicare beneficiaries will use
prescription drugs costing $500 or more, and 38 percent will spend more
than $1000. Each year, about 85 percent of Medicare beneficiaries fill
at least one prescription. About half of the beneficiaries without
coverage have incomes above 150 percent of poverty (above $17,000 for
an elderly couple). Analysis by the National Economic Council shows
that middle-income beneficiaries without prescription drug coverage
purchase 20 percent fewer drugs but pay about 75 percent more out-of-
pocket than those with drug coverage.
This situation is worse for the 10 million Medicare beneficiaries
who live in rural areas. Nearly half of these beneficiaries have
absolutely no drug coverage. They have less access to employer-based
retiree health insurance because of the job structure in rural areas.
And three-quarters of rural beneficiaries do not have access to
Medicare+Choice plans and the drug coverage that many of these plans
provide.
No one would design Medicare today without including broad coverage
for prescription drugs. The private sector now includes outpatient drug
coverage as a standard benefit in almost all policies. Further, all
plans in the Federal Employees Health Benefits Program are required to
offer a prescription drug benefit. And prescription drugs are
particularly important for seniors and disabled Americans, who often
take several drugs to treat multiple conditions. All across the
country, Medicare beneficiaries are suffering physical and financial
harm because they lack substantive prescription drug coverage.
The President has proposed a comprehensive Medicare reform plan
that includes a voluntary, affordable, accessible, competitive,
efficient, quality drug benefit that will be available to all
beneficiaries. The President's plan dedicates over half of the on-
budget surplus to Medicare and extends the life of the Medicare Trust
Fund to at least 2025. It also improves preventive benefits, enhances
competition and use of private sector purchasing tools, and strengthens
program management and accountability.
Key Principles
The President has identified key principles that a Medicare drug
benefit must meet.
It must be a voluntary benefit accessible to all
beneficiaries. Since access is a problem for beneficiaries of
all incomes, ages, and areas, we must not limit a Medicare
benefit to a targeted group.
It must be affordable to beneficiaries and the program. We
must provide assistance so almost all beneficiaries
participate. Otherwise, primarily those with high drug costs
would enroll and the benefit would become unaffordable. And
beneficiaries must have meaningful protection against excessive
out-of-pocket costs.
It must be competitive and have efficient administration.
Beneficiaries must have bargaining power in the market place.
And we must integrate the benefit into Medicare but use the
private sector to deliver it.
It must ensure access to needed medications and encourage
high-quality care. Beneficiaries must have a defined benefit
providing access to the medications that their physicians deem
to be medically necessary, and they must have the assurance of
minimum quality standards, including protections against
medication errors.
It must be consistent with broader reform. The drug benefit
should be a consistent part of a larger plan to strengthen and
modernize Medicare.
The President's plan meets these principles.
Beneficiaries will have access to an optional drug benefit
through either traditional Medicare or Medicare managed care
plans. Those with retiree coverage can keep it.
Premiums will be affordable, with extra assistance for those
with low-incomes.
There will be no price controls or new bureaucracy; instead,
the new benefit will be offered through private pharmacy
benefit managers who can efficiently negotiate fair prices. All
qualified pharmacies will be allowed to participate.
Beneficiaries can get all drugs prescribed by their physicians
from private benefit managers who meet minimum quality
standards.
CONCLUSION
The need for an affordable, comprehensive, outpatient prescription
drug benefit in Medicare is clear. The program's current coverage
restrictions leave many beneficiaries without the coverage they need.
We want to expand coverage to all beneficiaries, not further
restrict coverage. Patchwork solutions and limited exceptions cannot
address a problem of this magnitude. There is broad consensus that the
Medicare program must cover prescription drugs. Mr. Chairman, the
opportunity is before us. The time to act is now.
We look forward to working with you further on this critical issue.
I thank you for holding this hearing, and I am happy to answer your
questions.
Mr. Bilirakis. Thank you, Michael. We will try to continue
for another few minutes.
You made the statement, and we hear an awful lot of this,
that legislative intent and the language in an appropriations
bill may not be as clear as it should be.
But the thing that frustrates me is that we do not hear
from you to that effect. We do not hear you tell us that ``you
were not clear enough in the way you drafted it. Therefore,
this is what we recommend,'' or whatever the case may be. That
is what is so really very frustrating. Of course, that was the
intent of our October letter, and to date, we still have not
heard anything.
We all know that--when I say we have not heard anything, we
have not heard anything in terms of making recommendations,
telling us basically that it is really the fault of the
Congress, and this is what needs to be done, or something of
that nature.
You refer to your town meetings. Had it been your intent to
hold these all along? Yes, we did in fact require town
meetings, but 4 months have gone by. Has it been your intent
all along that you not do anything until after you have held
your town meetings?
Mr. Hash. No, sir. We were trying to follow the language in
the appropriations act faithfully, Mr. Chairman. Under that
direction, we were told to do three things. One was to suspend
the memorandum that we issued in August 1997, as you know. The
second was to suspend any work on a regulation that would have
any effect in limiting the coverage of self-injectable drugs.
The third issue was that we should--in the conference report on
the appropriations bill, it was suggested that we should hold
town hall meetings to make sure stakeholders had an opportunity
to comment on these issues.
Mr. Bilirakis. In the order in which you have stated them?
Is that the way you interpreted them?
Mr. Hash. Yes, sir. And also, I would like to say that in
my letter to you of November 3, in response to your October
letter, Mr. Chairman, I did lay out that we were working on a
regulation to address these issues.
We had recognized that, as all of us have, there have been
tremendously important advancements in prescription drugs, many
of which now can be administered in ways that do not require
administration by a physician, and that part of our intent of
doing a regulation was in fact to lay out alternatives and to
get public comment, as we normally do in the rulemaking
process, because we joined you in a concern about the
limitations under the statute with respect to this coverage.
Mr. Bilirakis. Mr. Brown was at least partially right,
certainly not completely right, but we should not be up here
throwing stones. They are throwing stones because they say we
have to do something overall on prescription drugs, and we have
never disagreed with that.
As a matter of fact, I will repeat, we are the ones who are
really working hard at that, unlike the past 40 years prior to
when we took over--I hate to say that, because it is part of
the statement. So we should not be throwing stones at one
another, we should be working together on these things. I guess
that is politics, and you do that.
The reasons, I suppose, why the prior majority, when they
were the majority, did not address this issue was because of
the difficulty of it, the expenses, trying to get it right. I
don't know. Frankly, I don't remember that there were any
efforts being made up here during all of those years, and I
have been here for a good bit of them.
The AARP recently testified before this subcommittee that
they would oppose any solution that is rushed, because they
feel it is a very complex issue. It is something that is on a
fast path, we feel.
I like to think that some of the comments that I have read
in CQ made by some of the minority leader's chief staffers are
not true when they say they would rather see nothing done
unless there is a complete Republican capitulation, to use
their words. I have been carrying that around with me, but I
changed suits this morning and I did not bring it with me. But
I intended to read it for my friend, Mr. Brown. So I hope that
that is a wrong interpretation on my part.
I guess what I am saying, it is going to take a while. It
may not take too long. Hopefully we will get it done this year.
But in the meantime, there are some people out there hurting,
and they are not--we are not talking about adding them to the
Medicare program, which is what you are saying when you say
solve the overall picture with prescription drugs.
We are saying, do what Congress intended back in the 1997
act and keep those people covered, because they were covered in
the past. So it seems to me that if in fact HCFA is waiting
until we can do something for the overall problem, we are
really gambling with the lives of patients who depend on these
medications. You would agree on that, wouldn't you?
Mr. Hash. We want to do whatever we can to address this
problem as quickly as possible. That is true, Mr. Chairman.
I would also say, Mr. Chairman, that there have been some
attempts during the long history of the Medicare program to
address prescription drugs. Congress, actually, in a bipartisan
fashion, passed something called the Catastrophic Act of 1988
in which we included----
Mr. Bilirakis. Don't remind us.
Mr. Hash. I understand why you might say that, Mr.
Chairman. It did include coverage for outpatient prescription
drugs.
Mr. Bilirakis. I supported it, and suffered along with so
many others as a result of it.
Just very quickly, Section 219 of the fiscal year 2000
appropriations act that we have been referring to directed HCFA
to cover injectable drugs and biologicals as it did before the
August 1997 program memorandum.
It is my understanding that this coverage was intended to
apply to all drugs and biologicals that had been reimbursed
based on the ``usual method of administration,'' and not just
the drugs and biologicals that had been approved before August
13, 1997.
Has this been HCFA's practice?
Mr. Hash. Our practice, we have had a longstanding policy
with regard to the coverage of drugs that can be self-
administered. The August 13, 1997 memorandum to our regional
offices was intended, Mr. Chairman, to actually modestly expand
our historic coverage by recognizing that with the advent of
many of these new drugs that could be self-administered, that
we needed to encourage that by offering some limited coverage
to individuals in physicians' offices at the time they began
administration of this, so they could be taught how to self-
administer drugs.
The 1997 memorandum was largely an attempt to say we were
expanding what was otherwise our longstanding policy regarding
self-administered drugs to allow some limited coverage in the
case of individuals who were learning how to self-administer
drugs under the supervision of their physician.
Mr. Bilirakis. But in any case, never any intent to just
limit them to--limit this coverage to those drugs approved
prior to the August, 1997 date?
Mr. Hash. No, no, sir, not to my knowledge.
Mr. Bilirakis. Thank you.
Mr. Brown.
Mr. Brown. Mr. Chairman, I appreciate you and the majority
working so hard on prescription drugs. We have legislation, the
Allen bill, the Sanders bill, the Stark bill, my bill, and we
could save you a lot of work by just adopting one of those, Mr.
Chairman, if you would choose one.
Mr. Hash, we have injectable drugs that are self-
administratable, we have injectable drugs that are not self-
administratable but can be given by a nontrained person, we
have injectable drugs that are not self-administratable but can
only be given by trained medical personnel.
Which of these three, just so we understand again, which of
these three does HCFA cover?
Mr. Hash. Mr. Brown, generally speaking, Medicare does not
cover drugs that are labeled self-injectables. There are a
number of exceptions that are laid out in the law with respect
to certain drugs that are self-injectable that are covered
under Medicare relating to cancer drugs, certain renal failure
drugs, hemophilia, clotting factors. Those are all self-
administered drugs that by statute are carved out and in fact
covered for Medicare beneficiaries.
As it stands now, we are trying to implement that in the
fairest and fullest way possible, but generally speaking, the
program has followed the label indications by the FDA about
whether a drug is self-administratable or not.
Mr. Brown. Does HCFA make the distinction of a patient's
individual medical circumstances?
Mr. Hash. We do not. We do not believe--our longstanding
policy on this was that we reviewed the literature and the FDA
labeling to determine whether something could be self-
administered, not the capacity of the individual patient to
administer the drug themselves.
Mr. Brown. Does this make sense, this incredibly complex
way we are doing this?
Mr. Hash. It is clearly not in the best interests, I think,
of patients who need access to these drugs. There is no
question about that. But we believe that the statute and our
longstanding policy has been an exclusion for coverage in the
Medicare benefit package of drugs that can be self-
administered. That is what the law says, and that is what we
have been doing.
We would like to find a way to expand coverage in this way.
That is why we were poised to put out a regulation that
included a number of options that would take a look at this and
involve stakeholders in it, and of course we believe, as I said
in my opening statement, that patchwork solutions are really
not what is going to address this problem, that we do in fact
need a comprehensive outpatient drug benefit.
Mr. Brown. I appreciate that. I do want to work
bipartisanly with the chairman. In this subcommittee we have
been able to do this. Sometimes the full committee has fallen
short, sometimes all of us have. I think this subcommittee has
been able to put partisanship aside better than most because of
the Chairman's leadership.
I do hope that in two ways we can do something in
conference. One is Medicare coverage, and second, a way really
beyond the President's plan to deal with the exploding price of
prescription drugs also, where we pay two and three times in
this country what people in other countries pay; where
individuals pay out of pocket twice as much as the VA pays and
insurance companies and large hospitals pay.
I yield back, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman. I know he sincerely
means it when he says he wishes we would work together to
provide access to these drugs.
We will recess for 5 minutes for a vote and we will be
right back.
[Brief recess.]
Mr. Bilirakis. Thank you for your patience. The Chair now
recognizes the gentleman from Tennessee, Mr. Bryant.
Mr. Bryant. Thank you, Mr. Chairman.
Mr. Hash, in your written testimony as well as your
statement today you indicate that current limitations on
Medicare coverage for self-administered drugs leaves
beneficiaries without the medications they need. You go on to
state further that, ``The current situation is not
acceptable.''
But in reality, is it not true that for 30 years, HCFA had
a policy that appropriately provided for coverage of certain
injectable drugs, and that in fact it was not until HCFA's PM
of August 1997 that caused this effect of denying coverage for
those injectable drugs?
Mr. Chairman, I ask unanimous consent to put into the
record two letters from Senators from the other body, one from
Senator Kennedy, which, just extracting from that, it is
directed to the Administrator at HCFA, your boss, Ms. DeParle,
saying ``As you know, Avonex, which is produced by Biogen, a
leading Massachusetts biotechnology company, which was covered
by Medicare until 1997''----
Mr. Bilirakis. Without objection, that will be the case.
I might add, if I may, that the letter that I initiated,
signed along with me by 3 or 4 other members of October 18 to
Ms. Shalala will be made part of the record, without objection.
[The information referred to follows:]
United States Senate
Committee on Health, Education, Labor, and Pensions
February 16, 2000
Nancy Ann Min DeParle
Administrator
Health Care Financing Administration
Room S14G, Hubert H. Humphrey Building
200 Independence Avenue
Washington, D.C. 20201
Dear Ms. DeParle: I'm writing to urge the Health Care Financing
Administration to take additional steps to make clear that Medicare
coverage is available for Avonex, an injectable drug used to treat
multiple sclerosis. As you know, Avonex, which is produced by Biogen, a
leading Massachusetts biotechnology company, was covered by Medicare
until 1997, when HCFA issued a memorandum to its regional offices on
self-administered drugs. Avonex was determined to be self-
administerable, and coverage was stopped for all Medicare patients.
In the wake of this decision, Congress acted last fall to restore
the coverage. Section 219 of the ``Department of Health and Human
Services Appropriations Act 2000'' (Public Law 106-113, Appendix D, 113
Stat. 15001A-241; November 29, 1999) provides that HCFA may not give
any operative effect to its August 13, 1997 memorandum on self-
administered drugs, or to any restrictions on coverage of such drugs
imposed after the memorandum was issued.
I understand that many carriers responsible for Medicare
reimbursement are unaware of the action by Congress on this coverage. I
urge you to take all appropriate steps to see that this restoration of
Medicare coverage for Avonex is clearly communicated to those
administering Medicare, so that access by patients to this important
treatment is available again as soon as possible.
With respect and appreciation,
Sincerely,
Edward M. Kennedy
______
United States Senate
Washington, DC
October 27, 1999
The Honorable Donna Shalala
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue SW
Washington, D.C. 20201
Dear Secretary Shalala: I am concerned about HCFA's intention to
change the regulation regarding coverage for injectable drugs. The
current policy that reimburses for drugs biologicals when provided
incident to a physician's services is important for Medicare
beneficiaries, especially those with cancer. Patients depend on us to
ensure that they get the best cancer-care available. Restricting this
policy at a time when the President and Congress are considering ways
to expand drug coverage for seniors seems contradictory.
Cancer patients rely on supportive care drugs to help treat the
symptoms and side effects of cancer and chemotherapy. These drugs that
include colony stimulating factors, hematopoietic growth factors and
low molecular weight heparins are an integral part of their
chemotherapy regimen. These drugs can help patients tolerate their
cancer treatment and improve their quality of life. Without coverage
for these vital drugs, Medicare cancer patients may experience more
infections and hospitalizations. The result may be increased costs to
the health care system.
As I understand the situation, HCFA has covered injectable drugs
that are given incident to a physician's services, if the drug is
usually not self-administered. However, based on an August 1997 HCFA
program memorandum to its regional office, some Medicare carriers are
basing coverage decisions on whether they think some hypothetical
patient could self-administer the drug, regardless of the standard
method of administering a particular drug or a physician's judgment
about the individual patient's ability to self-administer a necessary
injection safely. The result has been narrowing coverage and, in some
cases, denying coverage for medically necessary and clinically
appropriate injectable drugs.
Many or most elderly cancer patients are not capable of injecting
themselves, and often rely on health care professionals to help them.
It is inaccurate to think that these drugs are usually self-
administered, especially in this patient population.
I oppose any action on HCFA's part to restrict coverage of
injectable drugs that are usually not self-administered. These drugs
are a vital part of our Medicare beneficiaries' cancer regimen.
Furthermore, the rule-making process is not necessary for HCFA to
clarify its longstanding and broadly-supported policy to reimburse for
injectable drugs that are usually administered incident to physicians'
services. I suggest that HCFA notify the carriers through an official
communication that carriers should continue to reimburse for these
products, as they have since the inception of the Medicare program. I
appreciate your careful examination of this issue, and request a status
of HCFA's progress on clarifying this rule with your carriers.
With best personal regards, I am
Sincerely,
Max Baucus
______
Congress of the United States
Washington, DC
October 18, 1999
The Honorable Donna Shalala
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue SW
Washington, D.C. 20201
Dear Secretary Shalala: We understand that the Health Care
Financing Administration (HCFA) is reviewing a policy that would
effectively limit the access of Medicare beneficiaries to injectable
drugs that are covered ``incident to a physician's service.'' We are
writing to express our serious concern about the impact of this policy
on patients' ability to obtain necessary medications.
In the past, the administration of chemotherapeutic agents and
life-saving injectable drugs in a physician's office to treat
degenerative diseases was routinely covered by Medicare, if the drug
was not usually self-administered by the patient. In August 1997, HCFA
issued a memorandum to its regional offices ``to clarify program policy
with respect to drugs that are usually self-administered, but may not
always be self-administered.''
It has come to our attention that under this guidance, some
Medicare carriers are making coverage determinations based on a
hypothetical analysis of a patient's ability to self-administer the
drug--irrespective of the standard method of administering a particular
drug or a physician's judgment about the individual patient's ability
to self-administer a necessary injection safely.
This policy could seriously limit the access of Medicare
beneficiaries to important injectable pharmaceuticals. It is also
likely to create confusion among beneficiaries and providers regarding
coverage of medications administered in a physician's office.
We would like to fully understand the rationale for this new
policy. To that end, we are requesting your responses to the following
questions:
1. What are HCFA's objectives with regard to coverage for injectable
drugs provided incident to a physician's visit? What is the
purpose of issuing a notice of proposed rulemaking? Is the
Administration attempting to restrict coverage, to limit budget
expenditures for currently covered products, or to limit
coverage of future products?
Over the past two years, HCFA's policy regarding injectable drugs
covered incident to a physician's visit has been interpreted in
different ways. What is the current HCFA policy? Are the
carriers aware of this policy, and are they implementing it
accordingly?
3. What therapeutic categories of drugs will be addressed in any
proposed rule? Are those categories currently covered?
4. What would be the impact of any change in policy for patient access,
patient quality of care, and patient financial contributions?
5. Is HCFA's intent to continue coverage for products that are
currently covered?
6. What other methods does HCFA have to clarify its policy without
disrupting beneficiary services?
Considering the very serious nature of this issue, we respectfully
ask that you respond to us with the requested information no later than
October 22, 1999. Most importantly, we request that HCFA take no action
with regard to changes in this policy, including publication of a
proposed rule, until we have had a chance to examine all the relevant
information and work with HCFA to address our concerns.
Thank you for your prompt attention to this matter.
Sincerely,
Rep. Mike Bilirakis
Rep. Ernie Fletcher
Rep. Deborah Pryce
Rep. James Greenwood
Rep. Nancy Johnson
cc: Nancy-Ann DeParle, HCFA Administrator
Mr. Bryant. Senator Kennedy continues, ``When HCFA issued
this program memorandum, its regional offices at Avonex was
determined to be self-administratable, and coverage was stopped
for all Medicare patients.''
The second letter is from Senator Baucus that says, and
that is October, 1999; it says, ``Restricting this policy at a
time when the President and Congress are considering ways to
expand drug coverage for seniors seems contradictory.'' He has
other things to say about that. They will be placed in the
record.
Don't you agree that this program memorandum of August,
1997, has created this unacceptable problem?
Mr. Hash. Mr. Bryant, with all due respect, I do not agree.
I believe that the intention of the August 13, 1997 memorandum
to our regional offices was a restatement and clarification of
our longstanding policy, and further, that it provided in fact
some small expansion of our coverage with respect to the
teaching of individuals who were commencing self-injectable
drug therapy.
Mr. Bryant. In terms of what you believe and what actually
happened, I think the reality is evidenced by letters from our
chairman and the Senators' letters, that this PM had the effect
of substantially restricting, as opposed to expanding.
Mr. Hash. Mr. Bryant, I know that the Administrator met on
several occasions with representatives of the company that
manufactures Avonex, the drug that you referred to in those
letters, and that we sought diligently to find a way as to
whether or not it could be covered under our drug policy,
consistent with the law and our longstanding policy.
We were unable to do so. That is one of the experiences
that led us to the decision to commence a rulemaking process to
try to put out some additional options about how this might be
handled, given the statutory limitations regarding self-
administratable drugs.
Mr. Bryant. We appreciate that. But I think the bottom
line, the net effect, is that the folks that were able to take
this and be reimbursed before 1997 no longer have that, as well
as others. I think that is what we are here about.
The fiscal year 2000 appropriations bill prohibited HCFA
from implementing any such policy that would have imposed new
restrictions. I want to stress the word, we did not prevent you
from expanding; we simply, in that bill, opposed new
restrictions of Medicare coverage of injectable drugs.
The report language accompanying this provision directed
HCFA to issue a program memorandum to all carriers clarifying
this policy. It is my understanding that you issued--the one
you issued on March 17, which was, I guess, Friday--that you
did finally issue one.
Mr. Hash. Yes, sir.
Mr. Bryant. We appreciate that.
Again, I, like a lot of people--we can point fingers all we
want to, but we really need to get to the bottom of this.
Certainly, I think the cause of the problem has been back with
this August 1997 memorandum that was issued. I suppose it is up
to us to now correct it. I think we thought we had corrected
it, but it is slower than we expected.
Let me ask you one other question about I guess the broader
scope of this on the issue I raised in my opening statement
about the expense, the anticipated higher expenses for these
new drugs.
As I understand it, the President's drug benefit proposal,
when fully phased in, would provide only $2,500 in total
Federal drug assistance to each senior each year. Would this be
enough to cover a year's worth of disease treatments within
general therapies? I don't think it would, but I would like
your opinion. If you agree with me that it would not, would
such a proposal then represent a reduction in Medicare coverage
of many of the lifesaving drugs on which our ailing senior
citizens rely?
Mr. Hash. One of the reasons that this year the President
in his Medicare reform proposal modified the drug proposal that
was released last summer was to include the recommendation of
setting aside coverage for catastrophic costs above the $5,000
cap that was in the original proposal.
As you may know, there is a $35 billion set-aside that
would be dedicated to providing increased coverage for
individuals who have higher drug costs, because we, like you,
recognize that some of these therapies, are extraordinarily
expensive and need to be covered. That is the purpose of that
extra provision in the President's proposal.
Mr. Bryant. Again, as I originally stated, it would not
have helped. In actuality, it would have probably hurt seniors
in terms of trying to use this new medication. I know we added
money later, and only recently have we seen language in a bill.
Mr. Bilirakis. The gentleman's time has expired, but please
respond to that.
Mr. Hash. The other thing I wanted to say, Mr. Bryant, is I
don't believe it would have harmed beneficiaries. One of the
benefits of the President's original proposal was to make
available to all Medicare beneficiaries the discounts that
would be experienced as a result of relying on pharmacy benefit
managers. That would continue, regardless of the caps on the
coverage. It is estimated that those discounts would result in
a 12.5 percent, on average, discount from current prices.
So it is clear that even without the catastrophic benefit,
there would have been some important financial benefits to
beneficiaries from having access to discounted drug prices.
Mr. Bryant. Thank you, Mr. Chairman.
Mr. Bilirakis. Mrs. Capps?
Mrs. Capps. Thank you.
Mr. Hash, thank you for your testimony. If I could talk
with you or if you could talk with us about the legislative
changes or changes in general necessary to have the Medicare
program cover self-injected drugs or biologics, does HCFA have
the authority to do this, by your own decisions,
administratively? What parts can you take care of and what
parts need to be legislatively covered?
Mr. Hash. Mrs. Capps, the reason we were moving down the
road toward a regulation is that there are some interpretations
of existing statutory language that might have allowed some
expansion with respect to coverage of self-administered drugs.
That is why we wanted to put out some options to get public
comment on and to assess that.
The reality, though, is the limitation is still or would
still, even with options that might be available, be a
piecemeal response to a much broader problem, as you recognized
in your opening statement. That is why, of course, we are
strongly supporting a broader outpatient prescription drug
benefit. But we did want to explore some possibilities.
I should also say that in thinking about options to expand
coverage for self-administrable drugs, a host of ethical issues
come up; for example, where to draw the lines with regard to
capability for self-administration, not just with injectables,
but when you consider we have such a significant population of
beneficiaries with dementia or Alzheimer's who may not be able
to know and follow a pill regimen, which is clearly, by
anyone's definition, a self-administrable drug, but on the
other hand, is that someplace that the statute would allow us
to go?
More importantly, as I mentioned in my opening statement,
some of our own clinicians at HCFA are worried about the
ethical dilemmas that would be posed for a health care
professional who is treating a patient who clearly cannot--who
clearly can self-administer, is capable of doing so, but cannot
afford the drug.
Mrs. Capps. Yes. This is exactly the real world that our
constituents and the people who are affected by this whole
arena--this is where they live. These are ethical decisions
they are making every day.
So I want to acknowledge that I commend the administration
for entering into this world. I understand there are pitfalls.
I guess in the same conversation, if we could discuss, then--
and I don't want you to have to declare one way or the other
about the particular bill that I referenced--access to
Innovation for Medicare Patients Act of 1999.
Given, though, that it would provide coverage to
biologicals that would be used in lieu of already covered
products, is there some precedent for that kind of change? Is
this the direction that legislation would be useful for your
administration?
Mr. Hash. Legislation would, I think, be useful. I have not
had a chance to review your bill in detail, but I think--I know
you are trying to address the problem of access here, and I
think we want to work with you on that.
I think the other part of this is, in the coverage of
drugs, absent a more comprehensive approach, we need to be
concerned about the payment policies. Under current law, the
program is required to pay a set amount that is 95 percent of
the price that virtually no one pays for drugs in this country
today.
So when you are thinking about crafting legislative
solutions that involve more expansive coverage of self-
administered drugs, I would recommend that Congress consider
the pricing strategy, a pricing strategy for such an expansion.
Because at the present time, we have very little leverage with
respect to purchasing at a price that is reasonable, given the
purchasing power that Medicare would otherwise have.
Mrs. Capps. I know I don't have much more time, but just
finishing up, you said something about--in your forums, that
you have had meetings with people. Have you gotten the kind of
feedback that would give you a set of boundaries?
Mr. Hash. Actually we have not had those meetings yet. The
conference report on the appropriations bill requested or
directed that we hold at least two town hall meetings, and to
invite stakeholders to talk about a possible model for
expanding the coverage of self-administered drugs.
The first one is scheduled in Baltimore for May 18.
Mr. Bilirakis. Is there a second one scheduled?
Mr. Hash. Not yet, Mr. Chairman.
Mr. Bilirakis. I'm sorry. Please proceed.
Mrs. Capps. I yield back the rest of my time.
Mr. Bilirakis. Mr. Burr, to inquire.
Mr. Burr. Thank you, Mr. Chairman. My apologies for my
tardiness.
Mike, it is good to see you.
Mr. Hash. Thank you, Mr. Burr.
Mr. Burr. Let me go to a couple of areas, if I can. If what
I am told is true, I am gratified to hear you say that HCFA
never intended to reduce Medicare coverage of injectable drugs,
but I have to tell you that I am confused. If that is the case,
why was a provision stuck in the very last page of the
President's budget proposal for HHS that would have repealed
the action just taken which prohibited such a cut?
Mr. Hash. Mr. Burr, what we typically do when we send up
the President's budget, in response to provisions that were
added to an annual appropriations bill, is to make
recommendations to the Congress regarding those appropriation
riders.
In this case, that recommendation on the President's behalf
recognizes that what we would like to do is to do what we were
in the progress of doing when the appropriations rider passed.
That is, we would like to return to the rulemaking process,
where we were prepared to lay out a series of scenarios to get
public comment on for possible expansions of the coverage of
self-administered drugs.
Mr. Burr. You said in your statement, and I will refer to
your testimony a couple of times, you suggested HCFA cannot
create an exception for patients who are unable to self-
administer the drugs they need because Congress has not
provided you, HCFA, explicit authority to do so. I will refer
to page one of your testimony, the third paragraph, the last
sentence, ``And Congress has not provided an explicit exception
for those who cannot self-administer drugs that generally are
self-administered.''
I guess you are telling us there that HCFA does not have
policymaking authority, except when explicitly specified by
legislation by Congress, is that right?
Mr. Hash. No, sir. In a number of cases the law is subject
to interpretation, and there is administrative discretion
associated with provisions in the law.
Mr. Burr. Okay. I am further confused, then.
Mr. Hash. Let me give you an example of how we, I think,
got to where we are, if I may.
Back in 1990, I think it was OBRA 1990, the Congress passed
in the Medicare statute a provision relating to the coverage of
a drug that was used for women, postmenopausal women who had
fractures related to osteoporosis. The drug, I believe, is
called Calcetonin.
In the statutory language that is associated with that
coverage, Congress went to great lengths to describe the fact
that you needed to cover these injections by taking into
account either the mental or physical capacity of the
individual to administer that drug.
I think what that--the inference one takes from that is,
but for that language in the statute, that drug would have been
subject--as I think members knew at the time that matter was
being considered, that drug would have been subject to the
exclusion of the self-administered drugs.
But the fact that Congress specifically in the statute
said, in covering this drug for fractures by women who have
osteoporosis, you should take into account whether the
individual beneficiary either mentally or physically has the
capacity to self-administer this drug----
Mr. Burr. So only when there is a congressional reference
to a specific area does HCFA feel that they have the authority
to in fact propose a new rule?
Mr. Hash. Not only, but in this case of self-administered
drugs, the Congress--the Calcetonin is but one example.
Congress carved out a specific exception related to oral cancer
drugs.
Mr. Burr. Whose interpretation of what Congress wrote are
you referring to, Congress', HCFA's, or some third party?
Mr. Hash. I'm sorry, I don't know if I understand this.
Mr. Burr. The legislation, and I hate to be specific, but
we have had those instances in the past, you and I know, where
our interpretation or intent, our language, was interpreted in
a totally different way. I am just trying to find out what the
basis is.
Is it exactly what we say?
Mr. Hash. If the plain reading of the language of the
statute leads to a reasonable conclusion, then I think the
people who are executing the laws have no choice but to follow
the plain reading of the statute.
If the plain reading of the statute leads to some
alternative possibilities, rational possibilities, then I think
one turns to the legislative history, to look at the conference
reports, to look at the committee reports, to see if there was
amplification of the provision that was included in the
statute.
That is kind of the tree of logic I think that is applied
to determine whether administration discretion resides.
Mr. Burr. If we added report language to a bill that
suggested the scope of where HCFA had authority to propose
rules, you would see that as congressional intent to allow you
to make rulemaking?
Mr. Hash. I would definitely see anything in the committee
report or conference report as an expression of congressional
intent. I want to quickly add, if there is a conflict between
the plain reading of the statute and the legislative history,
the plain reading of the statute would be the guide we would
follow.
Mr. Bilirakis. Would the gentleman yield? His time has
expired.
Mr. Burr. I would happy to yield if the chairman would
allow me one last follow-up question. But he can certainly go
first.
Mr. Bilirakis. All right. Just to follow up on your
questioning, pre-August 1997, the policy of paying for
injectable drugs and biologicals was based on the usual method
of administration, which the carriers used in making their
coverage decision until that date.
What possessed HCFA to come up with a program memorandum in
August 1997 in effect clearly changing that? Mr. Kennedy in his
letter basically says stopping payment, and I'm not going to be
that drastic, but in effect, changing the policy by adding in
the phrase ``The individual patient's mental or physical
ability to administer any drug is not a consideration for this
purpose?'' .
I'm sure we all would like to know, why HCFA would do that?
It came out of the woodwork, did it not?
Mr. Hash. I believe it is a reflection, Mr. Chairman--and I
was not there in 1997, as you know--but I believe and I have
been informed that the reason for the issuance of that
memorandum was, as we have been talking about here this
morning, there have been a lot of advancements in drug
administration, including many drugs that started out as
intravenous or intramuscular drugs that had moved into the
arena of subcutaneous or self-administered drugs. There has
been an evolution. Many questions were raised.
The purpose of the memorandum to our regional offices was
to help respond to a series of questions about the
clarification of our policy on self-administered drugs. It was
not intended, and I want to say this in the strongest terms, it
was never intended to restrict coverage.
In fact, as I have said several times this morning, it
modestly expands coverage.
Mr. Bilirakis. Not according to the letter signed by Mr.
Kennedy.
Without objection, the gentleman's time is extended for an
additional 30 seconds.
Mr. Burr. I appreciate the extension, Mr. Chairman. I just
want to make sure that we are clear.
HCFA's understanding is that if they cannot point to an
area of legislation or report language that allows HCFA to
propose a rule, than you don't have the authority to do it? If
there is not legislation that leads one to see that the
Congress wanted you to have some flexibility, wanted you to be
involved in rulemaking, then you have none?
Mr. Hash. No, sir, I wouldn't say that. I think each case
has to be judged--whatever we might be talking about
specifically needs to be judged specifically.
Mr. Burr. Based on what?
Mr. Hash. Generally speaking, regulations are rooted in the
statute. Regulations are to follow the statutory provisions.
Mr. Burr. Clearly you said there must be some tie to what
Congress wrote that allows you the authority. If not, you don't
have the authority?
Mr. Hash. I think we have the authority to write
regulations. The substance of those regulations is covered by
what is in the law, what is in the legislative history
surrounding it.
Mr. Burr. My biggest concern is that we cannot have it both
ways. We need to get an understanding.
I would only make this statement, Mr. Chairman, that as we
talk about comprehensive drug coverage for seniors, if we have
this much trouble understanding self-injectables, I hope every
member will take that into consideration as we look at HCFA as
a component of an overall comprehensive drug plan, and
certainly make sure that it is part of their decisionmaking
process.
I thank Mr. Hash. Mr. Bilirakis. Mr. Barrett?
Mr. Barrett. Thank you, Mr. Chairman. Just to follow up on
that in just a very generic sense, how would a comprehensive
drug benefit change the way the current benefit works?
Mr. Hash. I believe, at least speaking of the President's
comprehensive drug benefit, the coverage of drugs that are now
covered either in a hospital or a nursing facility or covered
as incident to a physician's service, which is what is covered
now, that coverage would remain intact.
What the comprehensive new drug benefit would cover is all
of the non-covered, in effect self-administered, outpatient
drugs which are currently not covered under the Medicare
statute.
Mr. Barrett. Would you consider that a more equitable
fashion to deal with this?
Mr. Hash. Absolutely. You were not here earlier, but what I
was trying to say earlier was that while all of us would like
to be dealing with the problems of self-administered drugs that
we are here to talk about this morning, it does represent sort
of a patchwork approach to this problem.
I think the reality for all of us is the most appropriate
way of dealing with these problems is through a comprehensive
outpatient drug benefit.
Mr. Barrett. I am confused by some of the discrepancies,
and I feel them floating around the room, too. We are talking
about self-injected drugs, and the pharmaceutical companies
want those covered by Medicare?
Mr. Hash. Definitely.
Mr. Barrett. These are the same pharmaceutical companies
that run these Flo commercials that say we don't want
government in our medicine cabinets?
Mr. Hash. I think you see some inconsistencies.
Mr. Barrett. The other concern I have with the self-
injected, would we be creating some sort of market incentive to
create these drugs as self-injectable drugs if they are not
already so they could be covered by Medicare?
Mr. Hash. Yes, sir. I think your point is well taken. We
don't want to have a public policy that influences the form in
which drugs are manufactured. What ought to be influencing the
form in which drugs are manufactured and made available to
beneficiaries or to the American people ought to be on the
basis of the form that works best for the drug itself, not on
the question of whether it could be self-administered or
administered through intravenous applications or not.
That is what should not determine it. What should determine
it is what form of administration will make the drug work most
effectively for the patient.
Mr. Barrett. Okay. I yield back the balance of my time, Mr.
Chairman.
Mr. Bilirakis. I thank the gentleman.
Mr. Pickering, the gentleman from Mississippi, to inquire.
Mr. Pickering. Thank you, Mr. Chairman. I apologize for
being late. If I go over some ground that has already been
covered, please excuse me.
I am concerned, just the little bit that I have heard, that
we are losing our focus of what today is about. That is simply,
what is the status of self-injectables and HCFA's policy toward
that, and then consequently, is that resulting in the denial of
such benefits to Medicare recipients?
I would like to keep or regain our focus. We are all, on
this committee, supportive of trying to find a way on the
broader issue of prescription drug benefits, but that is not
what this hearing is about. So let us keep our focus as we go
forward.
Let me ask Mr. Hash, the program memorandum that came out
in 1997, as a result of that, did it create a situation where
the private market insurers began denying coverage for drugs
and biologicals that they covered prior to 1997?
Mr. Hash. When you say private market insurers, do you mean
private health plans and policies or do you mean the Medicare
program?
Mr. Pickering. Both. Both the Medicare carriers, as well as
health insurers in the private market.
Mr. Hash. In general?
Mr. Pickering. Yes.
Mr. Hash. I don't know about the policies of private
insurers, so I am not prepared to answer that question. I would
be happy to get you an answer if we have any data on that.
With respect to the Medicare program, as I said earlier,
the August 13, 1997, memorandum we sent to our regional offices
was intended to clarify our longstanding policy, and it
actually provided a slight expansion of that policy to cover
the instruction of individuals who were commencing a program of
self-administration of drugs.
That is what was--and by the removal or suspension of that
August 13 memorandum of 1997, the carriers who administer this
program for us are to follow the carrier manual, which was last
updated in 1995, and basically restates Medicare's longstanding
position on the noncoverage of drugs that can be self-
administered.
Mr. Pickering. In practical terms, does that mean that the
practice prior to 1997 of physicians being able to prescribe
self-injectables was discontinued at that point by your
carriers?
Mr. Hash. We have never had a policy of covering self-
administered drugs.
Mr. Pickering. But the practice--let us separate policy and
practice, pre and post. The practice before was I think
commonly used that we would have self-injectables----
Mr. Hash. I think the practice in reality varied quite
widely, because carrier medical directors who actually oversee
the application of the carrier manual instructions have some
discretion to apply the findings in the manual to the real life
claims that they get.
The manual actually says that drugs that can be self-
administered in the form that they are usually provided cannot
be covered. If the drug is generally administered by a
physician in their office or in their clinic, and that is the
form in which it is generally administered, then it would be
covered under the Medicare program, and has been since the
inception of the program.
Mr. Pickering. Again, if I can, staying away from the
manuals and the policy and just going back to the practice,
pre-1997, you say the practice had disparities. In some cases
that was followed and in some cases, maybe not?
Mr. Hash. I believe that to be the case.
Mr. Pickering. Post-1997, did the policy memorandum,
programmatic memorandum, have the effect of discontinuing that
practice altogether?
Mr. Hash. I don't know that for a fact. I think it clearly
has had some effects, because you and others and we are aware
that it has had some effect. But what it was doing was
restating the longstanding policy of Medicare.
If carrier medical directors had not been paying attention
to that and saw the August 13 memorandum, then presumably they
would want to make sure that their decisions were consistent
with the guidance that we had provided them.
Mr. Pickering. Just for clarity, I will try to restate what
I believe you just said. That is, after the memorandum in 1997,
the practice discontinued?
Mr. Hash. No, sir, I did not say that. I said it varied
before and after.
Mr. Pickering. So it still varies before and after?
Mr. Hash. Yes, sir.
Mr. Pickering. If the practice varies with your policy,
what do you want to see? What is the practice that you want to
see by your carriers?
Mr. Hash. What we have been trying to do before the
appropriations language passed last year was to engage in a
rulemaking process to put out a series of options that we
thought would be consonant with the statute as it exists now in
order to explore ways of expanding coverage. That is the
direction we were headed.
Mr. Pickering. Mr. Hash, if we can stay away from
memorandums and statutes and all the gobbledegook, what
practice do you want to see by your Medicare carriers for those
who could benefit from self-injectables?
Mr. Bilirakis. The gentleman's time has expired, but you
may proceed.
Mr. Hash. The practice we would like to see is to put out a
rule to solicit comments with regard to options we think are
consistent with the statute. We, like you, are just as
frustrated with the limitations of the statute, particularly
for people who suffer from the serious diseases like multiple
sclerosis, and who in fact cannot physically self-inject.
There is no one who is disagreeing over the need to address
that problem. That is something we want to do, just as much as
you want to do it. We would like to work with you toward that
end.
Mr. Pickering. Mr. Chairman, can I just try one more time?
Mr. Bilirakis. Only if there is no objection to that
effect.
Mr. Brown. Mr. Chairman, I won't object, but there has sort
of been a trend in this hearing that the majority goes over
with one or two more questions and continues this.
Mr. Bilirakis. They have more questions.
Mr. Brown. Perhaps they do have more questions, but I also
understand that HCFA's administrative budget has been cut, HCFA
does not have the power to hire and fire carriers, and I am not
sure this is really a fair kind of approach that has been
taken.
I certainly don't mind Chip continuing his questions, but I
just think if people on our side want to go over the same way--
--
Mr. Bilirakis. Keep it short if there is no objection,
please.
Mr. Brown. I have no objection.
Mr. Pickering. I just want to understand Mr. Hash's
position and HCFA's position.
In practice, do you want to see those capable and those who
pre-1997 were able to self-administer these drugs, which that
did provide, from all accounts, a benefit to people, and as we
talk about the broader issue of prescription drugs--we are
trying to help people as they receive treatment to have that
option--do you now want to see self-injectables through
Medicare practiced?
Are you saying that you are limited and cannot do that?
Mr. Hash. What we said is we would like to expand in this
area to the fullest extent of the law. We believe in order to
do that we need to publish a rule.
Mr. Pickering. Thank you, Mr. Chairman.
Mr. Bilirakis. It still goes back to statute. There is no
change in the statute. The statute was in existence prior to
August 1997. It was done a certain way. The program memorandum
came out of the woodwork in August 1997 changing things.
Mr. Deutsch, to inquire.
Mr. Deutsch. Thank you, Mr. Chairman.
Mr. Hash, Ms. Story, who is on the second panel, notes in
her testimony that Medicare would just cover the cancer drugs
to prevent countless inpatient hospitalizations and infection
and would reduce morbidity and mortality for people who
currently cannot get them.
Does it not seem to you that this statement is true for
coverage of all drugs? If Medicare provided a comprehensive
drug benefit, do you not think we would do a lot more to reduce
morbidity and mortality, promote health, prevent
hospitalizations and make improvements in medical outcomes?
Mr. Hash. Absolutely, Mr. Deutsch.
Mr. Deutsch. I guess the emphasis on this side really has
continually been that there is no question that the situation
now is a horrendous situation, but is there anything really to
point out the unique nature of the drugs that we are dealing
with, these injectables, versus drugs across-the-board?
Mr. Hash. I think anyone who cannot get access to drugs
that are lifesaving or life enhancing is in a situation that we
should be remedying. That is the whole point of this effort to
get a prescription drug benefit for Medicare. Whether it is an
injectable drug or an oral drug or an IV drug, Medicare
beneficiaries ought to be covered for outpatient drugs or
inpatient drugs, for that matter. Drugs are key to managing and
improving the health of our beneficiaries.
Mr. Deutsch. Right. I guess that is really where the
emphasis is. I appreciate the fact that we are having this
hearing, but I think the hearing emphasis really is about lack
of access of prescription drugs.
Again, in some ways we are highlighting the situation, this
anomaly that exists today really enforces that highlight and
makes it clearer in terms of the situation that occurs.
Can we maybe talk a little bit about the actual dollar
savings that either we have been able to come up with or drug
companies can come up with in terms of savings that would occur
if these drugs were available?
Mr. Hash. I think there is a lot of literature on certain
drugs and what occurs as a result of their availability in
terms of reduced need for hospitalization, reduced need for
other kinds of services that would be required if the person
did not have access to the drug.
I don't have the data right here handy, but I think drug
companies themselves frequently, when they are introducing a
drug to the market, have done some research about its effect on
the utilization of other services if the drug is made
available.
Mr. Deutsch. Again, there are different studies I know both
of us have seen. There is at least an argument that could be
made with empirical data to support that in fact there is a
positive savings in terms of providing this type of coverage?
Mr. Hash. I believe for many drugs that is the case, Mr.
Deutsch.
Mr. Deutsch. I have just a follow-up regarding that
question.
When Medicare was instituted, can we have just both a
ballpark and an empirical data sense--a way to quantify the
dramatic increase prescription drugs have taken as part of the
health care delivery system in America from when Medicare was
instituted?
Mr. Hash. I don't have any exact figures for you, but I
would be happy to try to quantify the sales of drugs in 1965
versus today.
Obviously, we all know, without knowing what the exact
figures are, there has been a quantum change in that, no
question about it.
Maybe another way of looking at it and answering your
question is to say the failure of the Medicare program to have
included prescription drugs in 1965 more than anything else
suggests that it was not viewed as a significant part of the
health care armamentarium of that period, because nobody would
think about designing Medicare today from the ground up and
leave out outpatient prescription drugs.
Mr. Deutsch. Which again I think is tied into the fact of
what percentage of out-of-pocket costs are spent today by
Medicare beneficiaries versus 1965 for prescription drugs.
Mr. Hash. Right. There are huge differences. In fact, even
today, and one of your later panelists, Dr. Steinberg--I
happened to review his testimony--he recently published an
article in Health Affairs that shows pretty dramatically what
the costs of drugs are for the Medicare population.
There are other articles that have recently come out
showing that people without drug coverage actually pay more out
of pocket for drugs, not surprisingly, but they get fewer
prescriptions because they are unable to afford them.
So there is a real consequence with the absence of drug
coverage in terms of both costs to beneficiaries and lack of
access.
Mr. Deutsch. I want to give you a chance to answer this
question, because I know this has come up, as well.
It is my understanding that the President's original
prescription drug proposal would not have provided catastrophic
coverage, and thus would not have provided any help for the
people who need these expensive injectable drugs.
But the proposal in this year's budget does include a
catastrophic element which would help with costs of these
drugs. Could you comment on this?
Mr. Hash. Yes, sir. I said two things earlier. One is that
obviously the President's proposal includes a set-aside of $35
billion for that purpose. That is in recognition of the need to
provide this--what we now believe would be about 10 percent of
the Medicare population by 2009 who would need more than $5,000
a year in drug expenditures.
The other point I made earlier was the fact that even under
the original proposal, when the cap was reached, Medicare
beneficiaries would continue to enjoy the discounts that were
made available to them through the contracting with pharmacy
benefit managers above and beyond.
Those savings on an average basis were estimated at about
12.5 percent off the retail prices, which for Medicare
beneficiaries means Medicare beneficiaries pay the very highest
prices today for drugs of any other citizens in the United
States.
Mr. Bilirakis. The gentleman's time has expired.
Mr. Bilbray, to inquire.
Mr. Bilbray. Thank you, Mr. Chairman. I want to sort of
just follow up on what my colleague, the gentleman from
Florida, was taking about.
We have had hearing after hearing about the issue on this
challenge of the cost effectiveness of providing prescription
drugs and different types of treatments that may not be
available now. In Southern California we have some great
programs. In fact, AARP has finally said that they would agree
with co-pays and a lot of other stuff, so that is not the issue
here.
I am sort of just flashing back to my days of administering
health programs for $2.8 million. I have an administrator in
front of me that tells me that there was no intention of
reducing services or eliminating certain medication to the
clientele, quote-unquote.
My question is, why was the memorandum--why was the
restriction at not reducing those services eliminated if there
was not some kind of intention of reducing those services?
Mr. Hash. As I said before, Mr. Bilbray, what we were doing
there, as I understand it, is as drugs have moved from the
category of injectable through IV and intramuscular into
individual self-administered drugs, subcutaneous injections and
so forth, we have had a series of questions that have come up
to our carrier medical directors and to the HCFA as well, and
as a result of that, periodically what we do when we encounter
those kinds of questions is we put out any clarifying and, if
possible, any expanding information we can so that we can
properly administer the benefit.
Mr. Bilbray. Are you saying that in Mr. Deutsch's State,
for every product that was dropped, there was a comparable
treatment that was exactly the type of program that a physician
could be able to choose as an alternative to that program that
had been reduced?
Mr. Hash. No, sir, I am not saying that.
Mr. Bilbray. When you say that the technology moved away
from a product, it means it moved to something.
Mr. Hash. Yes, sir.
Mr. Bilbray. If it moved to something, my question was, did
it move to a comparable treatment that basically made the
original treatment obsolete? They had a better, different
mousetrap, but it was still catching the same mouse?
Mr. Hash. That is possible, yes, sir.
Mr. Bilbray. My question is, the way you are saying it is
that it did it every time. I don't have that data that it did
it every time.
Mr. Hash. No, sir, I didn't mean to imply that. I misspoke.
Mr. Bilbray. So there was an abandonment of historical
service, then?
Mr. Hash. No, sir.
Mr. Bilbray. Either you covered every base with the new
technology, or you abandoned one base, or some bases were left
out. You cannot say I didn't cover every base, but I
didn't--but there wasn't any uncovered bases out there. It
is conflicting testimony.
Mr. Hash. Let me try, if I may, to sort this out.
Historically, the Medicare policy for the coverage of
outpatient drugs is limited to drugs that cannot be self-
administered. Earlier on, most drugs that fell into this
category were drugs that were administered under the
supervision of a physician or a health care professional,
usually intravenously or intramuscularly.
Now these products have either evolved, or in some cases
they are brand new products that never have been administered
that way, that are administered through subcutaneous
injections.
The way we have interpreted the statute historically, all
the way up until now, has been that if a drug in its usual form
to the patient was capable of being self-administered, then it
was excluded under the Medicare statute as a self-administered
drug.
Mr. Bilbray. Even if it had been used--even though it had
been covered in the past?
Mr. Hash. It could continue to be both, because in some
cases the proper form, because of the patient's condition,
would be to administer some drugs intravenously, even though
there is a form of it that can be administered subcutaneously.
The difference is the condition of the patient, where the drug
will actually work best.
Let me give an example.
Mr. Bilbray. I have to stop you a second. I just cannot
believe that an administrator at your level--the detail you are
talking about making these calls, that making those calls in
between a physician and their patient--I mean, the challenge is
there, and I can imagine trying to do it at county level, but
trying to do it at national level--do you really believe that
that is practical?
Mr. Hash. Those are not the decisions that I make. If it
sounds like I am making them, then I have misspoken again.
It's our contractors who administer the Medicare program,
in this case, the carriers who administer Part B, there are
medical directors who actually make the kinds of judgments that
I was just talking about. That is why there is discretion at
the contractor level within the guidance that we have given
them.
That is why in some cases if the label from the FDA
indicates that a drug can be administered intravenously, and it
describes a set of patient characteristics where, for that kind
of a patient, this drug will only work effectively if it is
administered intravenously, and for other kinds of patients
with different diseases or different conditions the label may
say this can be self-administered through a subcutaneous
injection, those are the kinds of decisions that come before
the carrier medical directors. There are 22 of them around the
country. They make those kinds of decisions.
Mr. Bilbray. This is a classic----
Mr. Bilirakis. The gentleman's time has expired.
Mr. Strickland.
Mr. Strickland. Mr. Hash, do you think that medical policy
should rest in the hands of the Members of the House of
Representatives and the Members of the Senate, rather than in
the staff at HCFA?
Mr. Hash. I think Congress has certainly plenty of
prerogatives to establish policies, including medical policies,
in the context of a program like Medicare. They do sometimes.
Other times they leave those decisions to the marketplace or in
fact to clinicians to make those decisions.
Mr. Strickland. In all due respect to you, my experience
with HCFA has been that oftentimes there seem to be individuals
there who think they know better than those of us who have been
elected by the people. That is one of the things that troubles
me about this agency.
Having said that, I have a couple of questions. In your
judgment, are there people who have very, very serious health
conditions who still will not get the needed drugs, even after
the August 1997 policy changes?
I would like for you, if you could, to think of this. Are
there examples of the kinds of illnesses or costs of drugs that
still are not covered; for example, the so-called triple
cocktail that is used for individuals with HIV-AIDS--isn't this
medication very expensive, and is it not administered orally? I
would like your response, please.
Mr. Hash. That is my understanding, Mr. Strickland. It
would not be covered.
Mr. Strickland. It is very expensive, is it not?
Mr. Hash. Yes, I understand. Maybe as high as $20,000 to
$30,000 a year for an individual.
Mr. Strickland. Is this drug ever covered under Medicare?
Mr. Hash. No, sir, not in the outpatient setting.
Mr. Strickland. My point is this: Would you not say that it
would make more sense for us to have a policy that covers all
prescriptions that people need, rather than to pick and choose
among illnesses, among degrees of illnesses, among drugs, and
among the way drugs are administered?
Would it not make sense for us, as compassionate people,
just to have a comprehensive prescription benefit that would
leave no one out?
Mr. Hash. Absolutely. I agree with that.
Mr. Burr. Would the gentleman yield for one question?
Mr. Strickland. I would, quickly, please. I don't have much
time.
Mr. Burr. At the heart of the example that Mr. Strickland
used, in HCFA's mind, would the extension of that benefit for
HCFA, the triple cocktail, actually be a net savings to the
health care system because we have eliminated the
hospitalization that that individual would have utilized if
they had the opportunity for the prescription drug?
Mr. Hash. I think it would. I think there is no argument.
In fact, we have just launched a demonstration to that
effect, to demonstrate that effect in the Medicaid program in
the State of Maine where we are covering individuals who are
HIV positive, not yet symptomatic, for these drugs in order to
slow or retard the progression of the disease to show that that
kind of early coverage for people who otherwise would not have
been covered shows benefits in terms of cost savings.
Mr. Burr. It is not the case in every case, but it is
certainly something we should consider.
Mr. Strickland. I thank my colleague for that very helpful
observation. Thank you.
Mr. Hash, the second question. The second panel is going to
be talking about drugs that are very costly, in some cases. Do
you have any knowledge of who is experiencing hardship in
accessing these drugs? Is it just the low-income, or are people
who are of modest income also having difficulty affording these
expensive drugs?
Mr. Hash. The problem of the cost of drugs for the low-
income is a very serious problem, but it is not limited to low-
income people. Over half of the people without any coverage
under Medicare for drugs who have incomes above 150 percent of
the poverty level--there are over half of them who do not have
any coverage for drugs. For them the costs are very
significant.
Across incomes, income spectrums, the cost of drugs are
very serious problems for Medicare beneficiaries.
Mr. Strickland. So a program tailored only for low-income
people would leave out a host of others who would be unable to
afford these medications, perhaps?
Mr. Hash. It would definitely do that.
Mr. Strickland. Thank you very much.
Thank you, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman.
Mr. Lazio, would you like to inquire?
Mr. Lazio. Thank you, Mr. Chairman.
Mr. Chairman, I just note, Mr. Hash--thank you very much
for being here, but I also want to note the bipartisan--almost
universal concern about where HCFA is right now, and the people
that are left behind.
I do a lot of work, as many people do in this committee,
with the cancer community. I know they are acutely sensitive to
the fact that this change is expected to have a detrimental
effect on people that desperately need self-injected
prescriptions.
I just want to try and follow up, if I can, for a moment,
because I am struggling to understand exactly how this change
came to be, as well, on where Mr. Bilbray left off.
I am reading, and I will be happy to provide you with a
copy, if you would like, and it is probably fair for me to do
that.
``Standard policy for 35 years.'' Section 2049 says in
part, ``Where, however, a physician injects a drug which is not
usually self-injected, this drug is not subject to the self-
administrable drug exclusion, regardless of whether the drug
may also be available in oral forms, since it is not self-
administrable in the form in which it was furnished to the
patient.''
But in a letter dated July 1 of last year from Nancy-Ann
DeParle, and I want to quote from that, she says, ``Medicare
covers only those Food and Drug Administration approved drugs
that are furnished incident to a physician's services and
cannot be administered,'' as opposed to ``not usually be self-
administered.''
``For example, as we discussed,'' a certain thing ``is not
covered by the program, even when it is necessary for the
patient to have the drug administered in a physician's office.
This is because the drug can be self-administered''.
I am just wondering if you can try and square for me how we
went from a standard policy that was in existence for so long
to this change. How you can square the discrepancy in these two
directives?
Mr. Hash. There is an explanation to that. I will take
another stab at that.
I believe that what both the letter and the carrier manual
site for our longstanding policy are trying to say is that if
in fact the administration of a drug by a physician is
appropriate because there is a standard of practice, there is a
medical protocol, that says that in order for this drug to be
effective it needs to be administered in a form that is
supervised by a physician or someone trained in the physician's
office, that is what I believe that statement in the record and
this means.
That does not mean that if a drug also occurs in a pill
form or in a self-injectable form, that that would disqualify
for that given patient, because there is a medical need for the
patient to be treated in that form in order to get the full
benefit of the drug.
Mr. Lazio. Isn't this letter fairly categorical, fairly
conclusive? ``incident to a physician's services and cannot be
self-administered?'' .
Mr. Hash. It is categorical in that sense. Also elsewhere
in the carrier manual it says the same thing. That letter
actually is excerpting from another section of the same carrier
manual language that has been in there since the beginning of
the program.
Mr. Lazio. Let me, if I can, Mr. Chairman, introduce into
the record a letter dated May 23 from HHS.
Mr. Bilirakis. Without objection.
[The information referred to follows:]
Department of Health & Human Services
Health Care Financing Administration
Office of Clinical Standards & Quality
May 23, 1998
Ms. Isabel P. Dunst
Columbia Square
555 Thirteenth St. NW
Washington, D.C. 20004
Dear Ms. Dunst: I am writing as follow-up to your recent visit to
discuss coverage of interferon beta-1a (trade name: Avonex) under the
Medicare Program. Thank you for taking the time to describe the use of
Avonex in treating relapsing forms of multiple sclerosis, and for
bringing your perceptions of the issues involved concerning Medicare's
coverage policy to our attention.
We have reviewed these issues and carefully evaluated the current
policy on self-administered drugs. Although we are cognizant of your
concerns, and have taken these into account in our evaluation and
reconsideration, our position remains unchanged. That is, interferon
beta-1a has been labeled as a drug capable of self-administration by
the Food and Drug Administration (FDA) and this is common medical
practice. As such, it is noncovered under the Medicare program, with
very limited exceptions. As stated in previous communications, drugs
that are self-administered are not covered by Medicare Part B unless
the Social Security Act (the statute that governs the Medicare program)
specifically provides such coverage, for example, in the case of
immunosuppressive drugs. In those circumstances when certain drugs that
are generally self-administered may not be, coverage is at the
discretion of the Medicare Carrier. Thus, when the patient first learns
how to administer a drug, the carrier may determine whether it is
medically necessary for the physician or staff to administer the drug.
The patient's condition; i.e., the patient's mental or physical
capacity to administer any drug, is not a consideration for coverage.
The decision is based on the appropriate medical protocol that applies
generally to patients that qualify for the drug in question. This
Medicare policy reflects the statutory provision that excludes self-
administered drugs from coverage. Any modification to this policy will
require a statutory revision.
Thank you again for taking the time to meet with us and to explain
your position on the coverage of Avonex. I hope this clarifies the
Medicare policy and the process necessary to revise existing statutory
requirements. If you have any questions, please contact Dorothy
Colbert, 410-786-9671, of my staff.
Sincerely,
Grant Bagley, M.D., Director, Coverage and Analysis
Office of Clinical Standards and Quality
______
Department of Health & Human Services
Health Care Financing Administration
The Administrator
July 1, 1999
Mr. Michael J. Astrue
Vice President and General Counsel
Biogen
14 Cambridge Center
Cambridge, Massachusetts 02142
Dear Mr. Astrue: Thank you for your letter concerning the Medicare
program's coverage policy for Avonex, which is used to treat patients
with multiple sclerosis (MS). I also wanted to say how much I
appreciated meeting with you to discuss this important topic. Since our
meeting, we have spent substantial time carefully considering the
issues you raised.
I understand that Avonex is generally not administered incident to
a physician's services and that no Medicare benefit payment currently
exists for these instances. And, as our discussion reflected I fully
appreciate the toll this debilitating disease takes on its victims. It
is enough of a burden to cope with the effects of the disease without
the worry of paying for an expensive drug like Avonex.
Unfortunately, we find ourselves in a dilemma. As you know, while
the President has proposed a prescription drug benefit under Medicare,
there currently is no benefit. Payment for drugs provided in the
inpatient setting is included within the appropriate diagnosis related
group. However, for outpatient drugs, by law, Medicare covers only
those Food and Drug Administration approved drugs that are furnished
incident to a physician's services and cannot be self-administered
(with a few exceptions explicitly provided in the statute.
Historically, the Health Care Financing Administration (HCFA) has
interpreted this coverage restriction as pertaining to the
characteristics of the drug itself and not to the capacity of the
particular beneficiary to self-administer any drug. For example, as we
discussed, Betaseron (another drug used to treat MS) is not covered by
the program, even when it is necessary for the patient to have the drug
administered in a physician's office. This is because the drug can be
self-administered. Another example is that eye drops used in connection
with outpatient cataract surgery are not covered by the program when
they are administered in the outpatient hospital setting. While the
situation you described for MS patients is very compelling, these other
situations are troublesome as well. Therefore, we are planning to
publish a proposal in the Federal Register that will explore several
alternative interpretations of this statutory provision. We will be
soliciting public comments on those alternatives and any other
interpretations that are legally supportable. We look forward to your
comments in response to that proposal. In the meantime, local carriers
will be able to make payment policy decisions concerning Avonex.
I want to again commend the Biogen company on its efforts to
develop product that are able to ameliorate the suffering MS patients
must endure. I wish that my response could have been more favorable.
Sincerely,
Nancy-Ann Min DeParle
Administrator
Mr. Lazio. I just want to follow up, if I can. Mr.
Chairman, the 2000 fiscal year appropriations bill prohibited
HCFA from implementing any policy, as you know, that would
impose any new restrictions on Medicare coverage on
injectables, and report language that accompanied the statutory
language directed HCFA to issue a program memorandum to all the
carriers that are supposed to be taking direction from HCFA.
I don't know how they get direction based on the
discrepancy between these documents. But HCFA issued the
program memorandum on March 17. In the PM HCFA notes that this
program memorandum may be destroyed after September 30 of this
year.
So you have indicated to the carriers that they can
disregard what is written in the program memorandum that was
issued by HCFA, and I would like to know if you can give us
some sense of what assurances you can give and therefore we can
give to the patients that may be testifying at this hearing,
people who are listening and looking for direction and are
relying on this, that injectable drugs that would be covered
today would be covered, say, after October 1 when this
memorandum is said to no longer be in effect.
Mr. Hash. I think the best way for me to answer that, Mr.
Lazio, is to say that in our view, the memorandum of August 13,
1997, did not change existing longstanding Medicare policy.
Second, I would say that after the expiration of the
appropriations provision that is in the law now, it would be
our intention to return to the activity that we had underway
before the rider passed, which was to put out a notice of
proposed rulemaking where we lay out a number of options that
explore how we could expand coverage of self-injectables under
certain circumstances that would be consistent with the law.
Mr. Bilirakis. The gentleman's time has long expired.
Mr. Lazio. Mr. Chairman, could I just ask the witness, I
would like to submit a couple of questions in writing, if I
could.
Mr. Bilirakis. I think Mr. Hash is accustomed to that.
Mr. Hash. Yes, sir. I will be happy to.
Mr. Bilirakis. Let me ask you very quickly. You referred to
having read Dr. Steinberg's testimony.
Mr. Hash. Yes, sir.
Mr. Bilirakis. On page 4 of his testimony--and we really
thought that one of the other panel members would have asked
you this--in talking about the definitions he said, ``I believe
it is not possible to develop a definition that makes sense
from a clinical perspective, other than leaving the
judgment''--and Mr. Lazio really went into this--''other than
leaving the judgment regarding the best means of administering
a drug to the patient's physician.''
Comment?
Mr. Hash. Yes, sir. I actually think that he is right about
that, in the sense that this ought to be a matter that ought to
be subject to physician judgment and application. That is why,
under a broad prescription drug benefit, that would be what
would be the physician's option in this case.
Mr. Bilirakis. But you have taken away their option of
determining where an individual patient's mental or physical
ability to administer any drug should be a consideration for
this purpose?
Mr. Hash. As I said earlier, that was one of the issues
that we wanted to address in our proposed rulemaking to get
comment on that.
I said, Mr. Chairman, earlier that expanding this coverage
is fraught with lots of ethical challenges. There are issues
about how to draw the line here, what conditions to take into
consideration. There are clearly equity questions about people
who fall inside the line and people who fall outside of the
line.
Our desire is not to have to make those kinds of decisions,
but rather, to have a broad policy that does not force us to
parse it in this way, and to do a sort of patchwork solution to
what is really a comprehensive problem.
Mr. Bilirakis. I know, you keep referring to broad Medicare
reform. I am not belittling it, it is very significant.
When you plan to make a change, is it not best to leave
things be if they have been functioning all right, and then, if
you are going to go through the process of developing a new
regulation, let that determine when the change will be, rather
than make the change through a program memorandum, and then
decide to go through the process afterwards?
In the meantime an awful lot of people out there who have
been depending upon this service have lost it. It may turn
out--as a result of your town meetings that were required and
as a result of the entire process, it may turn out that you
will go back to what it was for so many years before HCFA came
out with its program memorandum.
I am not really asking a question. I appreciate your
patience, and I appreciate you being here.
Mr. Hash. I appreciate the opportunity. I know there is
confusion out there. I know this affects real people with very
serious diseases and illnesses.
I am encouraged by your willingness to continue to work
with us and try to find a way to move forward with us; do what
we can do now and also work for the larger solution as well.
Mr. Bilirakis. That is right. We cannot say we want a
comprehensive solution and let people basically suffer in the
meantime.
Thank you very much, sir.
The next panel consists of Ms. Nancy Davenport-Ennis,
Founding Executive Director of the Patient Advocate Foundation
out of Newport News, Virginia, Ms. Rosalie Lohrman from
Pasadena, Maryland, Ms. Mary Ellen Rybicki from Reston,
Virginia, Ms. Julie Sizemore from Simpsonville, South Carolina,
Dr. Earl Steinberg, Chevy Chase, Maryland, and Ms. Jane Story
of the Cancer Center of the Carolinas in Greenville, South
Carolina.
Thank you, ladies and gentlemen, for being here. We are
grateful for your patience.
Your written statement is made part of the record. We will
set the clock at 5 minutes, and hopefully you can keep your
oral testimony within that period of time.
Mr. Burr [presiding]. The Chair would also like to take
this opportunity to recognize our distinguished colleague who
served for over 100 years, Congressman Rose.
The Chair would recognize Mrs. Story for the purposes of
her opening testimony for 5 minutes, and also welcome both our
South Carolina witnesses from our sister State to the south of
North Carolina.
Ms. Story.
STATEMENTS OF JANE A. STORY; EARL P. STEINBERG; JULIE SIZEMORE;
MARIELLEN RYBICKI; ROSALIE LOHRMAN; AND NANCY DAVENPORT-ENNIS,
FOUNDING EXECUTIVE DIRECTOR, PATIENT ADVOCATE FOUNDATION
Ms. Story. I would like to say that I appreciate the
opportunity to testify today. As you mention, I am a cancer
nurse from Greenville, South Carolina, and part of my charge as
a nurse is to treat the human response to a disease process.
Because my testimony today will focus on the face of the
patients that perhaps this committee does not otherwise see, I
would like to ask you to humor me and ask everyone in the room
to please take out a pen and paper and jot down something for
me. It would take just a moment.
If you would write down ten things that are important to
you, please. Perhaps it would be your family--it might not be
in any particular order--perhaps some faith that you have. If
you would jot those things down for me. You might need to leave
blanks.
Now if you would take a moment to look at that list, you
might have some blanks there. You might not have gotten to ten
yet. I would ask you to cross out four of those things that are
most important to you in your life. Then take away another two.
Now you may have four things that are important to you, but I
need you to take away another two, please.
When I did this exercise yesterday, the person that I did
it with said, but I can't take away those things, because you
see, what is left is maybe family, maybe God, and that is about
it. That is what every cancer patient that we treat faces. They
lose their health. As soon as they are diagnosed they lose
their health. They lose their financial security. They lose
maybe their home. They lose their job. They lose their ability
to take care of others.
These patients face quite a bit of loss. I see that
devastation firsthand, and the impact on families. Then of
course, the reason I do all of this is because I do have an
opportunity to see the triumphs of the human spirit.
I think, in that context, it is important to look at these
drugs. I am specifically speaking about cancer drugs. These
drugs, including Procrit, Leukine, Neupogen, as well as actual
chemotherapy drugs, Interferon and Interleukin, really do
increase the quality of life for our patients. They make it
possible for them to do things. I know Julie Sizemore will be
addressing that for you. They make chemo tolerable, and they
make chemo possible. They can allow patients to have a longer
and routine treatment without the increased discomfort that a
patient might have.
I would contend that these medications, even though they
are subcu, they are not, by virtue of that fact, self-
injectable.
Let me tell you why I believe that. The loss of coverage
that this policy that we are talking about today would cause
really brings up a lot of safety issues. We have patients who
are physically frail. They have lost their dexterity. The
chemotherapy can make their hands numb or tingle. There are
issues of dosing, that the patient could possibly get a wrong
dose.
We have finally gotten to the point in this country where
we have continually, over the last 2 years, decreased the
number of deaths that we have had because of cancer. We expect
to do that in the year 2000, so we are turning the corner on
the war against cancer, mostly due to the National Cancer Act.
We have more funding for research, so we know what the new
drugs are. We know how they work. We have education for doctors
and nurses that allows them to fight the war. This proposal of
so-called self-injectable drugs and changing the coverage for
them would threaten all that we work for and fight for.
You may not know what those people look like, but I do,
because I see those people every day. I see them cry, and I did
it before I left. I cried with a patient that was going to lose
her life. She has progressed. I would ask you not to allow the
coverage to be lost, because those people need it.
[The prepared statement of Jane A. Story follows:]
Prepared Statement of Jane A. Story
Thank you for the opportunity to share my experiences with you. I
am head nurse in outpatient cancer setting. In that capacity, I care
for cancer patients and their families physically, emotionally, and
spiritually. When cancer patients come to an outpatient setting for
their treatments, they often find in their nurses not only capable
caregivers but also people who are willing to talk and laugh with them;
sometimes those around them can manage to talk or laugh because life
isn't ``normal'' anymore. These patients see us frequently and we
become part of their family. Fortunately, we oncology nurses are the
``expert'' family members who have the specialized training to know
when a patient is in trouble and needs intervention versus needing a
compassionate ear and warm response.
Families frequently come into the challenge of cancer treatment
unprepared for the rigors they face. They are not sure what the
expected results of chemotherapy are, so they don't know whether the
symptoms and problems they see are ``normal'' for a cancer patient in
treatment or not. Cancer nurses guide and educate the family in these
situations. For instance, we counsel patients and families about the
threat of plummeting blood counts and work to address that problem
whenever it arises. When a chemotherapy patient gets exposed to an
infection and they do not have white blood cells to fight infection,
they are at risk for a more serious illness than you or I might get. If
a family member is not taught to call us when the temperature goes
above 100.5 degrees (Fahrenheit), the infection could go into the
patient's blood stream, necessitating hospitalization, sometimes in an
intensive care unit. If the infection goes into the blood stream
(sepsis) and remains untreated, death is possible. Without the skilled
teaching of an oncology nurse, the patient and family members might not
call for a temperature under 102 degrees.
Injectable drugs comprise an important facet of the sophisticated
drug care that fights cancer. Several different classes exist, but the
most frequently given drugs are those that either stimulate the bone
marrow to make more blood cells (like Procrit, Neupogen, Leukine, and
Neumega) or those that stimulate the immune system to fight the cancer
(like Interferon or interleukin).
Chemotherapy affects quickly growing cells in the body. The
chemotherapy doesn't know which cells are normal and which are
cancerous, so it hits all quickly growing cells, including hair cells,
cells in the throat, intestines, and bowels, the cancer cells, and
blood cells. The types of cells that are affected (hair,
gastrointestinal, and blood) generally represent the major adverse
responses to chemotherapy.
The most important quickly growing cells to our discussion are the
blood cells. There are three basic kinds of blood cells: white blood
cells, which fight infections; red blood cells, which carry oxygen; and
platelets, which clot the blood. Neupogen and Leukine increase the
white blood cell count. If the white blood count or the mature white
cells are too low, patients cannot get their chemotherapy since the
chemo would further decrease the white blood count, potentially leaving
the patient without any defense against infection.
Without Neupogen and Leukine, patients must wait until their body
naturally regenerates the white blood cells. During this period,
patients can be exposed to infection. Increased hospitalization will be
needed if a patient gets an infection or becomes septic. The cancer
cells also have an opportunity to grow (since the chemo is not killing
the cancer), negating the positive effects of continuing chemotherapy.
Procrit increases the red blood cell count; a low red blood cell
count increases the fatigue a chemo patient experiences and can cause
increased shortness of breath. These increased side effects often
debilitate chemo patients who are already physically and emotionally
stressed. Procrit enables them to manage these side effects, often so
that they can function at a more ``normal'' level. In other words, the
Procrit allows them to cope better with their cancer treatments. One of
our patients, for instance, is a Medicare beneficiary who lost an arm
to cancer and is thrilled to have the strength to leave her home to do
simple things like food shopping. If Procrit is not given, patients
must receive transfusions of packed red blood cells in a hospital
setting. In addition to the cost, the transfusions expose them to
blood-borne diseases like Hepatitis-A or AIDS. The suppressed immune
system of a cancer patient on chemotherapy will not be able to fight
these diseases.
Neumega increases the platelet count. Patients usually have
decreased platelets once they have received several rounds of
chemotherapy. Without Neumega, patients typically must receive several
platelet transfusions, which involve being admitted to the hospital
(thus increasing hospital costs). Also, the patient is at increased
risk of bleeding spontaneously. Obviously, the possible results of
spontaneous, uncontrolled bleeding are hospitalization or death.
Generally, Neumega is used after a patient has both had their platelet
count drop into a dangerous range and needed transfusions of platelets.
The Neumega prevents further drops in platelets. A decreased platelet
count will also make a patient ineligible for chemotherapy.
Interferon and Interleukin are classes of drugs that stimulate the
patient's own immune system to attack cancer cells. Interferon is used
to treat melanoma, leukemia, lymphoma, Kaposi's sarcoma, and hepatitis.
This drug can be a very effective and simple answer to these complex
and deadly diseases. Interleukin, particularly Interleukin-2, treats
renal cell cancer; no other chemotherapy has been found to be effective
on this form of cancer. Without Interferon and Interleukin, the patient
with a disease listed above faces either more extensive chemotherapy
with less effectiveness or a much quicker death.
If the Medicare program were to classify the injectables discussed
above as self-injectable drugs, the implications are profound.
Foremost, these medications cannot be safely given and monitored by the
patient. Medicare patients with cancer are generally frail;
chemotherapy intensifies this effect. The patients may have tremors or
numbness and tingling in their hands due to the effects of
chemotherapy. Cancer fatigue, one of the most prevalent and least
treatable side effects of chemo, creates a lack of energy, making any
activity feel impossible. Thinking about giving themselves an
injection--an unfamiliar and complex task--will also feel impossible to
the elderly chemo patient.
Many Medicare patients cannot see clearly and have decreased manual
dexterity (both partially due to advanced age, but increased by the
effects of chemo). These drugs must be given in an exact dose via a
needle with minute gradations. Of the six medications discussed above,
three must be mixed with a dilutant at the time of injection. Only two
of the medications come in individual dose vials. Thus, the possibility
of mixing the drug improperly or getting too large or too small a dose
is increased.
Additionally, in South Carolina, the majority of our Medicare
patients have little or no other source of income to pay for
injectables. In the past as a home health nurse, I entered Medicare
patient homes with little or no heat, minimal food, and bugs. Some
patients barely have the resources to pay for their bills and food. The
medications in question cost anywhere from $500 to $5,000 per
injection; the drugs are given from once a week to once a day. For the
typical South Carolina Medicare patient and their families, the choice
would either be surviving (eating, a roof over their heads, etc.) or
paying for the drug. At the Cancer Centers of the Carolinas, we work
with our patients and families to find a way to pay for their care (25%
of our patients are indigent). Over the seven years I have been a
nurse, however, I have seen patients and families, already stretched to
their limit by the physical and emotional demands of cancer,
frantically seeking funds to pay for their own or their loved one's
care. The treatment that Medicare makes possible for cancer should not
be taken away. Doing so would only add to the enormous burden the
patients and families face.
While the physical and cost facets of administering the injection
play a large role in my concern for Medicare coverage of these drugs,
the possible adverse events are chilling to me as a nurse. As mentioned
above, these drugs require exact doses and exact mixing. They also
require trained observers (oncology nurses, with the support and
guidance of doctors) to manage and deal with the side effects. Just as
chemotherapy can have life-threatening effects, so can Neupogen,
Leukine, Procrit, Neumega, Interferon, and Interleukin. For instance,
Neupogen normally causes skeletal pain, frequently in the sternal
(breast bone) area. This needs to be assessed by a nurse to discern
whether the pain relates to cardiac problems or to the administration
of the drug. Leukine can cause shortness of breath and fluid retention,
as well as rashes and flu-like symptoms. The shortness of breath and
fluid retention could be related to cardiac problems or the drug, and
both might require intervention, including teaching by the nurse or the
doctor seeing the patient and providing medications. Procrit can cause
hypertension, nausea, vomiting, and ankle swelling. Again, an
experienced, highly trained cancer nurse can determine whether these
side effects are a response to another drug (like chemotherapy),
another disease process, or the injectable drug. Neumega can cause
fluid retention, shortness of breath, and chest pain. These serious
side effects may need the immediate medical action that a cancer nurse
in an office setting can secure. Interferon and interleukin both have
serious side effects that can limit the amount of the medication that
the patient can receive. The dose limiting factors for interferon
include fatigue and severe weight loss, although non-dose-limiting side
effects range from chills and fever to liver, kidney, and heart
changes. The patient may also have their potassium level drop to an
unsafe level, requiring oral or intravenous replacement. For
interleukin, dose-limiting adverse effects are mental status changes
(confusion, agitation, and disorientation); decreased platelet and red
blood cell counts; and decreased blood pressure. Patients receiving
medications that have dose-limiting toxicities need a trained observer
to determine when the dose needs to be modified. An elderly patient at
home would not be able to fulfill this role.
Every medication listed has the possibility of an allergic reaction
with the first dose. A patient taking the drug at home as a
prescription might not have the medical resources available to survive
such a situation. Office-based nurses can easily manage this task.
All of these injectable medications require regular review of blood
values (labs) by a nurse for several reasons. First, if the patient
takes the drug to increase their white cells, red cells, or platelets,
these blood levels can go too high if they are not monitored. In the
case of the white blood cells, this will cause aches and pains.
Platelets running too high can cause the blood to clot unnecessarily,
perhaps causing a stroke or other adverse event. Second, a particular
dose of a medication may not guarantee the effect that is desired.
Procrit, intended to increase the red blood count, may increase the
counts too much at one dose and not enough at another dose. When a
nurse assesses the patient regularly, this issue can be managed for the
appropriate outcome. Take our patient, Lucy W., as an example. On
40,000 units of Procrit per week, the patient's counts went up too
high. When the nurse reported this to the doctor, the dose was
decreased to 20,000 units per week. Subsequently, the patient came in
with increased weakness and shortness of breath, so the nurse requested
blood counts be run. The results showed a drop in the counts, so the
Procrit dose was increased to 30,000 units per week and the patient's
counts are being maintained. This intervention could only have happened
via the intervention of a nurse attuned to the patient's symptoms and
knowledgeable about the meaning and implications of blood test results
as they relate to the medication.
In summary, making drugs used for cancer treatment self-injectable
would undermine the war on cancer we are fighting. Out there on the
front lines of that battle, we have the tools to provide patients with
optimal cancer care: drugs, which can cure the cancer; supportive
medications like these injectables, which allow patients to tolerate
their chemotherapy at higher doses with less side effects; and cancer
nurses, who treat the human response to the disease of cancer. Without
any of the three, the battle will be harder and the patients could lose
the care and medications they need. We will go backwards in time,
losing the ground we have gained in this battle and the resources we
have invested in that fight through the National Cancer Institute. The
result will be increases: increases in inpatient hospital admissions
(and the associated costs) to deal with infections that could have been
prevented; increases in morbidity and mortality of patients who cannot
afford the care they need without the Medicare coverage they now
receive; and an increased sense of helplessness and hopelessness
because patients and their families will lose the psychosocial and
spiritual support oncology nurses provide.
I an thankful to Chairman Bliley and all the members of this
committee for the excellent job you have done in urging the Medicare
program to do the right thing, at least through September 30th.
However, I urge you to keep the problem from reoccurring in the future.
Our patients--who have become my friends and family--and I thank you
for your consideration as we fight the War on Cancer together.
Mr. Burr. Thank you very much, Ms. Story, for that very
compelling and emotional testimony.
Dr. Steinberg, you are recognized for an opening statement.
STATEMENT OF EARL P. STEINBERG
Mr. Steinberg. Thank you very much for the opportunity to
present to you this morning.
In the few minutes that I have available to me, I would
like to try to make five points related to the issue before
you. First is that outpatient prescription drugs, whether they
are self-administered or administered by a health care
professional, are an absolutely essential part of the high
quality or even a minimum standard of appropriate health care
today.
This is particularly true with regard to treatment of
chronic diseases. As Mr. Hash said, if the Medicare program
were being designed today, I cannot imagine that prescription
drugs would not be a covered benefit, any more than I could
imagine that either surgery or radiology services would be
excluded from coverage.
It is not unusual for elderly individuals with common
chronic diseases, common chronic diseases, to require between
$5,000 and $10,000 worth of prescription medications in a given
year. Without insurance coverage for outpatient prescription
medications, many Medicare beneficiaries are not able to buy
them.
I want to point out that this is not only high cost outlier
patients, or those who are poor who have difficulty affording
their medications. Many of my former patients at Johns Hopkins
who had incomes in the range of $25,000 per year did not fill
the prescriptions that I gave them because they could not
afford to do so.
To the extent that Medicare beneficiaries do not have
access to these treatments, the Medicare program fails to
accomplish its goal of ensuring that the elderly and the
disabled have access to necessary health care.
Second, as has been mentioned several times today, not all
patients are the same. They vary greatly in the severity of
their disease as well as the types and severity of morbidities
that they have. Consequently, the fact that one patient can
self-administer a drug does not mean that all patients can
self-administer the same drug.
In fact, given the progress that has been made in the
development of drugs and in injection devices, it would be a
rare instance in which a physician or nurse could not train at
least one patient to administer a drug safely.
The third point I would like to make is that over the past
35 years incredible progress has been made in medical science,
computer and electronic technology, and the development of
lightweighting and improved solid materials. As a result,
pharmaceutical products, as well as techniques for
administering them, are available today that likely could not
have even been imagined 35 years ago.
This progress has enabled patients who used to require
prolonged hospitalization to be treated safely, more
conveniently, and less expensively at home. In other instances,
the availability of new routes of administration for drugs can
result in the increased effectiveness of treatment due to
faster or more thorough absorption.
I believe it is a mistake to have a coverage policy that
actively discourages rather than encourages such innovation.
Fourth, I would like to make a point that the status quo
with regard to coverage of self-administratable drugs
unfortunately perturbs pharmaceutical manufacturers' behavior
in a perverse way. Under the policy in place today,
manufacturers sometimes are induced to formulate or reformulate
drugs as injectables that could be better administered orally.
A case in point is the drug Lupron, which is used to treat
prostate cancer. Lupron was first developed in a formulation in
which it could be self-administered by subcutaneous injection.
As a result, it was not covered by Medicare. It was a failure
commercially, and the manufacturer then reformulated the drug
so that it had to be administered intermuscularly by a health
care professional. That reformulated drug was then covered by
Medicare and is now used commonly today.
Finally, the current situation with regard to coverage also
perturbs physician behavior in a perverse way. If the optimal
drug for a patient is self-administratable but the patient
cannot afford to buy the drug, it does no good for a physician
to prescribe it.
As a result, under current policy, when the best therapy
can be administered by a patient, this physician sometimes will
resort to prescribing an alternative, albeit suboptimal drug
that must be administered by a health care professional.
In summary, given the high cost of prescription drugs,
especially among the elderly with chronic disease, many elderly
cannot afford to buy the drugs they need. Given the central
role of these drugs in health care today, Congress should add a
prescription drug benefit to Medicare.
If, however, a politically viable approach for providing
such a benefit cannot be found, I urge you to modify the
statutory language so as to maximize the number of Medicare
beneficiaries who have access under existing benefits to drugs
that are safe and effective in treatment of the diseases from
which they suffer.
In closing, I might just add that it seems to me that part
of the confusion about this issue results from the fact that
there are multiple alternative definitions being made of what
``self-administratable'' means. On the one hand, the more
expansive definition is based on the usual method of
administration, whereas the more restrictive is based on a
definition of whether the drug cannot be self-administered.
I think this is where the heart of the issue about the
cutback has occurred.
Thank you very much.
[The prepared statement of Earl P. Steinberg follows:]
Prepared Statement of Earl P. Steinberg
Good morning. I appreciate the opportunity to testify today
regarding Medicare coverage of drugs that can, in some cases, be self-
administered by patients in the outpatient setting.
My name is Dr. Earl Steinberg. I am a general internist who
practiced internal medicine full- or part-time from 1979-1990. For the
past 18 years, I have devoted my career to 1) evaluation of the safety,
effectiveness and cost-effectiveness of medical technologies, including
prescription drugs; 2)--evaluation of health care providers' actual
patterns of practice; and 3) design and implementation of interventions
to improve the quality and/or efficiency of care. From 1982 to 1994, I
was on the full-time faculty of The Johns Hopkins School of Medicine
and School of Hygiene and Public Health. I also served as Director of
The Johns Hopkins Program for Medical Technology and Practice
Assessment.
From 1994 to February of this year, I was a Vice President at
Covance Health Economics and Outcomes Services Inc., a consulting firm
that helps to bring high quality medical innovations to market,
evaluate their performance once they are in actual use, and improve the
quality and efficiency of provider practice. During my tenure at
Covance, I served as Director of its Division of Quality Assessment and
Improvement Systems and Co-Director of its Outcomes Studies Group.
I currently am an independent health care services consultant, and
an Adjunct Professor of Medicine and of Health Policy and Management at
The Johns Hopkins University. I also am a member of the Blue Cross and
Blue Shield Association's National Medical Advisory Panel, on which I
have served for the past 10 years. This Panel oversees what is widely
considered to be the best and most rigorous technology assessment
activity in this country.
My background enables me to bring multiple, complementary
perspectives to bear on the issue you are considering today--an issue
that I believe has become far more complicated and vexing because of 30
years of medical and technological progress, as well as two decades of
changes in the Medicare payment system that provide a strong financial
incentive to discharge patients from the hospital as early as possible.
In the brief time I have with you this morning, I would like to
make five points that are central to the debate over how broadly or
narrowly the concept of ``self-administerable drugs'' should be
construed.
First, outpatient prescription drugs, whether they are self-
administered or administered by a health care professional, are an
essential part of high quality, or even a minimal standard of
appropriate, health care today. This is particularly true with regard
to treatment of chronic diseases. If the Medicare program were being
designed today, I cannot imagine that prescription drugs would not be a
covered benefit, any more than I could imagine that either surgery or
radiology services would be excluded from coverage. Last year Medicare
beneficiaries used between $30 and $40 billion worth of outpatient
prescription drugs, many of which have become quite expensive. It is
not unusual for elderly individuals with common chronic diseases to
require between $5000 and $10,000 worth of prescription medication in a
given year. In a study of actual prescription claims generated by over
375,000 elderly individuals that I recently conducted with
collaborators at Merck Medco Managed Care and the Henry J. Kaiser
Family Foundation (Steinberg EP, Gutierrez B, Momani A, Boscarino JA,
Neuman P, and Deverka P; Beyond Survey Data: A Claims-Based Analysis of
Drug Use and Spending by the Elderly; Health Affairs (March/April
2000): 198-211) , we found that 5 percent of people in our sample had
more than $4000 in prescription drug expenditures and one percent had
$6,600 or more in such expenditures during 1998. Total annual spending
for elderly with chronic disease was 50% to 200% higher than for
others. As a result, one percent of elderly with cancer or common
combinations of chronic diseases,, such as diabetes and heart disease,
had total annual spending greater than $9,000. Without insurance
coverage for outpatient prescription medications, many Medicare
beneficiaries are not able to buy them. I should point out that it is
not only high cost outlier patients, or those who are poor, who have
difficulty affording their medications. Many of my former patients at
Johns Hopkins who had incomes in the range of $25,000 per year did not
fill the prescriptions I gave them because they could not afford to do
so. To the extent that Medicare beneficiaries do not have access to
these treatments, the Medicare program fails to accomplish its goal of
ensuring that the elderly and disabled have access to necessary health
care.
Second, not all patients with a given disease are the same.
Patients vary greatly in the severity of their disease, as well as the
types, number and severity of the other diseases that they have. Some
have poor vision. Some have cognitive disorders. Some are physically
unable to perform simple tasks. Consequently, the fact that one patient
can self-administer a drug does not mean that all patients can self-
administer the same drug. Congress recognized this fact when it
fashioned the Medicare benefit for Coverage of Osteoporosis Drugs. This
provision states that injectable drugs approved for use in treatment of
a woman who has suffered a bone fracture that is related to
postmenopausal osteoporosis are covered if ``the individual is unable
to learn the skills needed to self-administer such drug or is otherwise
physically or mentally incapable of self-administering such drug.'' To
me, as a clinician, it makes little sense to apply these very relevant
considerations ONLY to women with postmenopausal osteoporotic
fractures.
For many reasons it is not surprising to me that there is confusion
and controversy surrounding interpretation of the Social Security Act's
provision regarding coverage for drugs and biologicals which cannot be
self-administered. There are many other potential operational
definitions of what constitutes a self-administerable drug. For
example, judgments regarding the self-administerability of a drug could
be based on the usual method of administration of the drug, on the
basis of whether any patient can self-administer the drug, or on the
basis of whether a given patient can self-administer the drug. Given
the progress that has been made in development of injection devices, it
would be a rare instance in which a physician or nurse could not train
at least one patient to administer a given drug safely. Yet another
potential definition would be one in which a drug would be considered
to be self-administerable if the label for the drug indicates that the
drug can be administered by a patient without the need for medical
supervision. While many other such definitions could be fashioned, I
believe it is not possible to develop a definition that makes sense
from a clinical perspective other than leaving the judgment regarding
the best means of administering a drug to the patient's physician.
The third point I would like to make is that over the 35 years
since the Medicare program was enacted, incredible progress has been
made in medical science, computer and electronic technologies, and the
development of light-weight and improved solid materials. As a result,
pharmaceutical products, and techniques for administering them, are
available today that likely could not have been imagined 35 years ago.
This progress has enabled patients who used to require prolonged
hospitalization to be treated safely, more conveniently, and less
expensively at home. In other instances, the availability of new routes
of administration for drugs--for example, topically, intranasally, or
via inhalation--can result in increased effectiveness of treatment as a
result of faster or more thorough absorption. I believe it is a mistake
to have a coverage policy that actively discourages, rather than
encourages such innovation.
Fourth, the status quo with regard to coverage of self-
administerable drugs perturbs pharmaceutical manufacturers' behavior in
a perverse way. In circumstances in which only a small number of non-
elderly are the target patient population for a drug, the commercial
success of a product may depend on whether Medicare covers it.
Consequently, under the policy in place today, manufacturers are
induced to formulate drugs as injectables that could be better
administered orally. A case in point is the drug Lupron ,which is now
commonly used to treat prostate cancer, a disease that occurs most
commonly in men over the age of 65. Lupron was first developed in a
formulation in which it could be self-administered by subcutaneous
injection. As a result, Lupron was not covered by Medicare. In order to
make the drug commercially viable, the manufacturer of Lupron re-
formulated the drug so that it had to be administered intramuscularly
by a health care professional. The reformulated drug was covered by
Medicare and now is used commonly. Many other companies have been
forced to employ less than optimal formulations of their products in
order for them to be covered by Medicare.
Finally, the current situation with regard to coverage of self-
administerable drugs also perturbs physician behavior in a perverse
way. If the optimal drug for a patient is self-administerable, but the
patient cannot afford to buy the drug, it does no good for a physician
to prescribe it. As a result, under current policy, when the best
therapy can be administered by a patient, physicians often will
prescribe an alternative, albeit sub-optimal, drug that must be
administered by a health care professional. In some instances, such
``second-best practice'' from a clinical perspective can also be the
most costly practice, either because the second best drug is more
expensive or because administration of it can require the development
of an office infrastructure that adds to the cost of therapy.
In summary, given the high cost of prescription drugs, especially
among elderly individuals with chronic disease, many elderly cannot
afford to buy the drugs they need without drug insurance. Given the
central role prescription drugs play in health care today, Congress
should add a prescription drug benefit to Medicare. If a politically
viable approach for providing such a benefit cannot be found, I urge
you to modify the statutory language so as to maximize the number of
Medicare beneficiaries who have access to drugs that are safe and
effective in treatment of diseases from which they suffer under
existing benefits.
Mr. Burr. Thank you, Dr. Steinberg. I want to apologize to
the rest of our panel, at least for the bell. It is our intent
to take a break here. We have a series of votes on the House
floor. We would like to recess until 12:45. Hopefully, that is
enough time to get our series of votes out of the way and to
allow you each to get a bite to eat downstairs if that is
something that you choose to do, or to get just a little break.
The committee will reconvene at 12:45 for the rest of the
testimony.
[Brief recess.]
Mr. Bilirakis. The hearing will come to order.
Ms. Sizemore, of course, you know your written testimony is
part of the record. Would you like to proceed?
STATEMENT OF JULIE SIZEMORE
Ms. Sizemore. Yes.
First of all, I want to thank you for letting me speak
today: I will try it my best to say what I need to say in the
time allotted.
First of all, I need to show you a picture of my family.
This is my husband and my son Jacob. My son Jacob was 15 months
old when my husband was diagnosed with stage 4 adrenal cancer.
Prior to June 7, 1998, David and I knew very little about
cancer. No one in our family had had it, no close friends had
had it, so our knowledge was very limited. After June 7, 1998,
we would embark on a journey that would teach us more than we
would ever want to know about this disease.
The first of our learning experiences began with
injections. The chemotherapy that David was given broke down
his blood, and in order for his blood and his body to be able
to endure chemotherapy given in a timely fashion and in a dose
that would kill the cancer, he had to have these injectables.
These injectables enhanced David's quality of life and
extended his life. He lived 15 months with this disease.
Fifteen months was 15 months longer that Jacob got to spend
time with his father. The injectables, along with the
chemotherapy, gave us time. Time to make memories, and time for
David to take Jacob to the airport to watch the airplanes land
for the first time. Time to put up a basketball goal for him.
Time to take him to an amusement park. Time to take him out on
the golf course for the first time. Things that we took
pictures of and that now are my memories. Now when my son asks
about his daddy, they are in a photo album that we pull out,
and I will show him all the things his daddy did with him.
You may ask yourself, at 32 years old, what do I know about
Medicare? It has come to my awareness in the last week that if
Medicare no longer provides funding for these injections, that
managed care, in my case Blue Cross-Blue Shield, would follow
suit. Then not only are the elderly citizens of our country
affected, but anyone is with a terminal illness that needs
these injections.
Self-injectables are first of all dangerous. David was a
36-year-old very strong, healthy man with a very sharp mind
when he was diagnosed with cancer. The chemo left him sick,
left him fatigued, left him cloudy mentally, at times. He was
in no way in a shape to inject himself.
He was 36. I can only imagine if he had been 40 years
older, even if he did not have Alzheimer's at 76, even if he
did not have dementia, just the mere fact as we age we forget
things----
Mr. Bilirakis. Tell me about it.
Ms. Sizemore. He also had allergic reactions to these
injections. For someone injecting themselves who may not have
someone to care for them at home, to have an allergic reaction
could be fatal.
The injectables are expensive. I have a list that I got
from my pharmacy of all the drugs that David received in 15
months. These injections, if we had had to pay for them, as
well as if an elderly citizen had to pay for them, in 15
months' time, which he was not on these injections every day,
it would have exceeded $40,000, which would have financially
devastated us, and we are not poor. We are not in a poor
income. But it would have financially devastated us.
Shortly after David was diagnosed with cancer, his 76-year-
old father, who was a World War II veteran, was diagnosed with
leukemia. His responsibility to my family, as I said, has
changed at 76. He now can provide memories to my son of his
son, of what David was like when he was a boy, a teenager,
something that I was not around for.
So his existence is insurmountable in my family now. The
thought of Leo not being covered for these injectables if he
would need them, not being paid for, having to inject himself,
would be detrimental. He would die, just as David would have
died without these injections, he would have died earlier.
I want to back up, because this is real important for me to
say. In terms of the safety involved in self-injecting, David
had times after cis platinum where his hands were numb and he
could not feel his fingers, let alone give himself an
injection. Due to the high doses of morphine he received, he
jerked. He would be lying still and he would jerk, because the
doses of morphine were so high.
His side effects were unpredictable. The way he would feel
was unpredictable. It would have to be something that a
physician would have to examine him every single day if you are
going to say someone can give themselves an injection, because
it was unpredictable side effects.
I ask you to provide funding for older Americans, for
everyone who needs these drugs, and to not let them self-inject
out of safety. Do not put their families in a position of
having to decide whether or not they die or live based on
money.
You cannot put a price on the memories that I have of my
husband, the time that we got, that we had with those 15
months, for him to fill out a journal for his son. You cannot
put a price on that, and you cannot put a price on the memories
that my father-in-law still has to share with Jacob about his
son.
So I ask, for my son's sake and for my father-in-law's
sake, that you not let this pass.
[The prepared statement of Julie Sizemore follows:]
Prepared Statement of Julie Sizemore
Before June 7, 1998, my husband David and I knew very little about
cancer. In fact, all we knew is what we heard about other families'
experiences or what we saw on television. Frankly, cancer was not
anything we really paid any attention to because it had never touched
our lives.
But then, on June 7, 1998, David and I embarked on a journey that
would teach us more about cancer than we would have ever wanted to
know. On that date, David was diagnosed with Stage IV adrenal cancer.
David had a tumor the size of a grapefruit that had actually taken over
his right adrenal gland. He also had 60-70 metastases in his lungs.
Even though adrenal cancer is often curable, it has to be caught
early. The problem with adrenal cancer, though, is that its symptoms
are often masked until the cancer has metastasized into other areas of
the body. Because of the advanced state of David's cancer, we soon
learned that his cancer was incurable.
David's treatment began on June 21, 1998, and it ended shortly
before his death on September 14, 1999. At the time my husband was
diagnosed, our son Jacob was 15 months old. When David left us, Jacob
was 30 months old.
I am here today to honor David and, hopefully, to bring a human
perspective to the issue you are addressing. If what I have learned
along my family's journey with cancer is helpful to you, then I pray
that something good will come of the tragedy we experienced.
Among the things I learned during the last two years is how
important cancer therapies are. David's treatment included chemotherapy
and injectable drugs. The drugs enabled David to tolerate his chemo and
extended David's life. The drugs gave us more time to make memories as
a family, and they enhanced David's quality of life, giving him more
energy to enjoy the time he had left.
In other words, the injections, along with the chemotherapy David
received, bought us time. It bought time for David to take Jacob to the
airport to watch airplanes land for the very first time. It bought time
for David to take Jacob to a golf course and an amusement park, and to
build him a bicycle. It bought time for Jacob to watch his daddy
playing piano, and it bought time to establish for Jacob a favorite
song--``Great Balls of Fire''--which he would ask David to play for
him.
In short, David's treatment bought him the time he needed to leave
Jacob not when he was only 15 months old, but when he was twice that
age.
The treatment David received gave us the time to build memories and
compile the pictures that Jacob and I often call on to help us through
the days and nights without him. Those are memories of love that our
extended time with David has given to Jacob and me. If David had only
lived 6 months, Jacob would have missed so much. The injections and
care David received gave him something priceless--time with his father.
I don't know what the term ``quality of life'' means to you, but that
is what it means to me.
Only months after David's diagnosis, David's 75 year old father--a
WWII veteran--was diagnosed with leukemia. I know that the thought of a
senior with cancer is not always as heart-wrenching as a child with the
disease. I, too, found myself at times having a silent conversation
with the elderly patients I saw at David's cancer center. ``You've had
your whole life to live,'' I would think. ``My husband is only 36 and
he's dying.''
That terrible thought left me for good, though, after David died.
At that time, I realized that I needed his father to live not only for
his own sake but for my son's. With his wealth of memories of his son,
my father-in-law is a connection to David that my son needs very, very
much.
And so, at 76 years old, my father-in-law, Leo, has a new
responsibility. You see, Leo needs to pass on to Jacob the memories he
has of David as a child, a teen, and a young adult. And Leo needs to be
there when my son is old enough to inquire about and understand who his
father was.
As David's battle progressed, I learned that the tremendous value
of the treatments he received and his father continues to receive do
not come without cost. If David's injections had not been covered by
his insurance, his treatment would have been financially devastating to
us. Instead, David's coverage enabled him to receive the drugs he
needed and to live as long as was possible. The same holds true today
for Leo and the Medicare coverage he currently receives.
During David's battle, I also learned that these injections come
with a great deal of risk. Although I understand that many of these
therapies may be technically self-injectable, self-injection was out of
the question for David as it is for so many other patients. How David
felt was never something that could have been predicted; chemotherapy
often left him extremely fatigued, weak, and nauseated. These side-
effects not only made life difficult for David, they made consistently
safe self-injection impossible.
It is because of these experiences that I approach the issue you
are addressing today with quite a bit of fear. What David, Jacob, and I
experienced is something that I would spare others, if only I could. It
also makes me worry for those, like Leo, who would be impacted by the
loss of Medicare coverage for the therapy that made such a difference
in David's life.
I fear for Leo and other seniors with cancer, for whom the loss of
the Medicare coverage they receive today would be financially
devastating. Many of these patients would not be able to afford their
therapy. And their families would be forced to deal with the painful
choice of having to do whatever is necessary to find the resources they
need--or to let their loved ones die.
I fear for those seniors for whom self-injection would mean a death
sentence. Like many cancer patients, David had an adverse reaction to
one of his injections. If a senior had a similar response, and was
alone, who would help them? If they were unaware of the reaction until
it was too late, would they be able to even pick up the phone and dial
911? Or would they have to rely on a spouse who may also be weak or
disabled?
I fear for the seniors who may not be able to keep track, by
themselves, of all that their care entails. Fortunately, David's mind
was very sharp. But because there were so many medications to take, he
would have forgotten which he had taken and which he had yet to take
were it not for the care of his doctor and nurse. Chemotherapy makes
this even more difficult, since it often causes fatigue and, for many,
disorientation. David was only 36 when he died--what would it be like
for people 40 years older than him to have to tackle these challenges
alone?
I also fear for people who, like David, are too young for Medicare.
While cutting current Medicare coverage may not impact them directly,
they will suffer as a result. That is because managed care plans often
follow Medicare's lead when it comes to cutting reimbursement. We would
not have made it without David's coverage. What would happen to all
those patients and families whose insurers copy Medicare and drop
coverage for the life-saving drugs they need?
Finally, I fear for my son, Jacob.
If my father-in-law, Leo, loses the coverage that gives him the
care he depends upon to live, he might lose his battle with cancer too
early to fulfill his mission. The difference of a few years in an
elderly man's life may not seem like much to some, but they mean the
difference between my son really knowing his father, or not.
For Jacob's sake. For Leo's sake. For the sake of the other old and
young cancer patients who are out there. And for the sake of my
husband's memory. Please do not allow anyone to take away the coverage
that lets some win their war on cancer and helps others make the most
of the time that they have left.
Thank you.
Mr. Bilirakis. Thanks, Ms. Sizemore.
Ms. Rybicki?
STATEMENT OF MARIELLEN RYBICKI
Ms. Rybicki. Mr. Chairman and other members of the
committee, my name is Mariellen Rybicki. I live in Reston,
Virginia, and I have multiple sclerosis. On behalf of myself
and the many others who have Medicare coverage but who cannot
afford drug treatment, I wish to thank this committee for your
efforts to restore Medicare coverage for MS treatment.
As a result of last week's announcement that Medicare has
changed its policy, I will now be able to receive the treatment
that I have not been able to afford. From 1997 to the present,
Medicare has not covered any drug for the treatment of multiple
sclerosis. However, 3 years ago my Medicare carrier in Virginia
did reimburse for a multiple sclerosis drug which is given
intramuscularly.
Then, in 1997, for reasons I do not understand, Medicare
terminated coverage for this drug. Last week's announcement is
the first good news I have had since my diagnosis.
I was not able to utilize drug therapy during the time
Medicare provided coverage, that is, prior to 1997. The
intramuscular drug therapy Medicare used to reimburse for only
became available in May 1996. Later that year, my doctor made
me aware of the availability of drug therapy. I was already
enrolled in Medicare Part A, but I was not enrolled in Medicare
Part B, the part of the Medicare program that reimburses for
the type of drugs that we are talking about today. It was not
until 1997 that I applied to become eligible for Medicare Part
B, and then I had to satisfy a waiting period. When I did
become eligible for Part B, I literally had a prescription in
my hand, and then I was told that Medicare had already changed
its policy and had stopped coverage.
I need to be in a course of extended drug treatment. The
drug that will now be covered by Medicare has been shown to
significantly retard the progression of multiple sclerosis.
Presently, I take high doses of steroids to control my
spasticity. However, no matter what I do to control my
symptoms, my disease will continue to worsen without drug
therapy.
Multiple sclerosis is a horrible disease. It causes the
body's immune system to attack the nerve tissue in the brain
and spinal column, forming patches called plaques. As the
disease progresses, it destroys the myelin coating that
surrounds the nerves and the nerves themselves. Intact nerves
with a myelin coating are what enable the transmission of
messages between the brain and other parts of the body. As the
coating and nerves are progressively destroyed, the symptoms of
multiple sclerosis get worse.
For some inexplicable reason, in the early stages of
multiple sclerosis symptoms generally will come and go. Later,
these symptoms usually become permanent. Presently, I have
great difficulty walking. I wear a brace and use a cane because
my foot falls when I try to put my heel on the ground. I have
numbness in my right hand and weakness in my fingers. I also
have difficulty swallowing. Still, without drug therapy, and
allowing this disease to go unchecked, my symptoms will worsen.
Many people who suffer from MS have brain atrophy.
Cognitive skills are lost, tremors, loss of balance, and
control of bodily function can ensue. Because of the many
difficulties multiple sclerosis patients face on a daily basis,
many cannot physically self-inject.
This is especially true for the drug treatment that is
given intramuscularly. The needle that is required for this
injection is about one and a quarter inches, and requires some
skill for the proper dilution of the drug. This obviously makes
it nearly impossible to self-inject for a person who has
tremors, loss of hand-eye coordination, weakness, and loss of
sensation.
Now under the policy change, people with multiple sclerosis
will be able to get reimbursement for intramuscular injections
when done in a doctor's office.
I cannot overstate my appreciation for what Congress has
done to restore drug coverage for multiple sclerosis patients.
However, since this policy change expires in September, I am
also concerned that this coverage for multiple sclerosis
treatment will once again be taken away. Today I ask that
Congress not allow this to happen.
I would be glad to answer any questions that any of the
members of the committee might care to ask.
[The prepared statement of Mariellen Rybicki follows:]
Prepared Statement of Mariellen Rybicki
Mr. Chairman and other members of the committee, my name is
Mariellen Rybicki. I live in Reston, Virginia and I have multiple
sclerosis. On behalf of myself and the many others who have Medicare
coverage but who cannot afford drug treatment, I wish to thank this
committee for your efforts to restore Medicare coverage for MS drug
treatment.
As a result of last week's announcement that Medicare has changed
its policy, I will now be able receive the treatment that I have not
been able to afford. From 1997 to the present, Medicare has not covered
any drug for the treatment of multiple sclerosis. However, three years
ago my Medicare insurance carrier in Virginia did reimburse for a
multiple sclerosis drug which is given intramuscularly. Then in 1997,
for reasons I do not understand, Medicare terminated coverage for this
drug. Last week's announcement is the first good news I've had since my
diagnosis.
I was not able to utilize drug therapy during the time that
Medicare provided coverage (that is prior to 1997). The intramuscular
drug therapy that Medicare used to reimburse for was only available in
May, 1996. Later that year, my doctor made me aware of the availability
of this drug therapy. While I was already enrolled in Medicare, Part A,
I was not enrolled in Medicare Part B, the part of the Medicare program
that reimburses for the type of drugs that we are taking about today.
It was not until 1997 that I applied to become eligible for Medicare
Part B, and then I had to satisfy a waiting period. When I did become
eligible for Part B, I literally had my prescription in hand when I was
told that Medicare had already changed its policy and had stopped
coverage.
I need to be on a course of extended drug treatment. The drug that
will now be covered by Medicare has been shown to significantly retard
the progression of multiple sclerosis. Presently, I take high doses of
steroids to control my spasticity. However, no matter what I do to
control my symptoms, my disease will continue to worsen without drug
therapy.
Multiple sclerosis is a horrible disease. It causes the body's
immune system to attack the nerve tissue in the brain and spinal
column, forming patches called plaques. As the disease progresses, it
destroys the myelin coating that surrounds the nerves and the nerves
themselves. Intact nerves with a myelin coating are what enables the
transmission of messages between the brain and other parts of the body.
As the coating and nerves are progressively destroyed, the symptoms of
multiple sclerosis get worse.
For some inexplicable reason, in the early stages of multiple
sclerosis, symptoms generally will come and go. Later these symptoms
usually become permanent. Presently, I have great difficultly walking.
I wear a brace and use a cane because my foot falls when I try to put
my heal on the ground. I have numbness in my right hand and weakness in
my fingers. I also have difficulty swallowing.
Still, without drug therapy and allowing this disease to continue
unchecked my symptoms will worsen. Many people who suffer from MS have
brain atrophy. Cognitive skills are lost. Tremors, loss of balance, and
control over bodily functions can ensue.
Because of the many difficulties multiple sclerosis patients face
on a daily basis, they cannot physically self-inject. This is
especially true for the drug treatment that is given intramuscularly.
The needle that is required for this injection is about 1 and a quarter
inches and requires some skill for the proper dilution of the drug.
This obviously makes it is nearly impossible to self-inject for a
person who has tremors, loss of hand-eye coordination, weakness, or
loss of sensation. Now, under the policy change, people with multiple
sclerosis will be able to get reimbursement for intramuscular
injections when done in a doctor's office.
I cannot overstate my appreciation for what Congress has done to
restore drug coverage for multiple sclerosis patients. However, since
this policy change expires in September, I am also concerned that this
coverage for multiple sclerosis treatment will once again be taken
away. Today I ask that Congress not allow this to happen.
I would be glad to answer any questions that any of the members of
the committee might care to ask.
Mr. Bilirakis. Thank you very much, Mrs. Rybicki.
Ms. Lohrman.
STATEMENT OF ROSALIE LOHRMAN
Ms. Lohrman. Your Honor, Mr. Chairman, my name is Rosalie
Lohrman. I am 61 years of age. I have renal cell cancer. I had
to retire at age 57, not because I wanted to, but because of my
disease. I had to take an early disability. That put me into
the system of social security, and after 2 years of being
disabled I was put into the Medicare system. I had good
insurance, but I had to go into the Medicare system.
In August 1999, my doctor, Dr. John Downs from Towson, he
suggested that I go on Interferon and Interleukin because my
cancer had advanced quite rapidly within a short period of
time, so we went through with applying for it. Imagine my
surprise when I was denied. I thought surely it must be a
mistake. My government was not going to let me down now, after
I had paid into the system for my whole entire working life. So
I sent in and received a second denial. Medicare wouldn't pay
for self-injectable drugs.
That was the time I really started getting mad about it. I
started knocking on every door and ringing every telephone I
could. The National Cancer Foundation, the Kidney Foundation,
Patient Advocates, my Congressperson, anybody and everybody I
could, and mostly my insurance company, because I wanted them
to know when they saw the name Rosalie Lohrman who I was. I
didn't care whether I talked to the secretary, I didn't care
whether I talked to the president of the association that I was
in contact with, I just wanted somebody to hear my voice and
say that self-injectable drugs do need to be approved for
cancer, for Interferon and Interleukin.
At that point I felt like a nobody, because I felt like,
well, Medicare is just seeing me as a name and Medicare number
2192063102. But I was somebody. I am a wife of 44 years, mother
of three sons, 11 grandchildren, a sister, a friend, and I
thought a good American citizen, but now the system was letting
me down. But I continued to fight. But a lot of times people
with cancer, they don't have the stamina to fight and knock on
every door and ring every phone, so that is an added stress.
Then you think, well, how am I going to fight the U.S.
Government? If they are saying no, they are saying no. So it
was just a lot of stress, that is all I can say. It was a lot
of stress, but it did give me the will to keep on going.
I guess what I am saying is I became depressed. I just was
put under added stress that I did not need to be under at that
point. I guess the point I want to make is when you have
cancer, sometimes you do not have the strength or the state of
mind to fight as hard as I did.
Some people would have gotten their first denial and said,
well, I can't fight City Hall. I might as well just give up
now. But you cannot have that outlook. Therefore, I must stress
to you the need for a permanent change in Medicare to cover
self-injectable drugs.
Thank you.
[The prepared statement of Rosalie Lohrman follows:]
Prepared Statement of Rosalie Lohrman
Your Honorable Mr. Chairman, my name is Rosalie Lohrman of
Pasadena, Maryland. I'm 61 years of age, I have renal cell cancer, I
retired at age 57 on disability due to my cancer. I worked for 30 years
at Super Fresh. In August, Dr. John Downs prescribed interferon and
interleukin 2--the only effective treatment for my type of cancer.
Imagine my surprise when I got my first denial. I thought surely they
had made a mistake. How could they deny me when I needed them? A system
I had paid into my entire working life. I got my second denial reason
being they would not cover self-injectable drugs. Now I was getting
mad. Here I have advanced cancer and Medicare was denying the only hope
for me. I felt like a nobody, just a name and a Medicare # 219263102.
Here I am a wife for 44 years, a mother of 3 sons, a sister, a friend
and a hard-working American citizen and paid into the system every
week. Now they are denying me a cancer treatment because they won't
cover self-injectable drugs. I went on to my third appeal and was
denied, but they knew who Rosalie Lohrman was. I called and got in
touch with anybody and everybody I could. National Kidney Foundation,
PAF office, my congressperson, my state government, general attorney's
office, and I called my insurance company almost every day. I didn't
want to fall through the cracks, I wanted them to know who I was and
what I needed. I became depressed and full of stress. Now I am not only
fighting cancer, but I am fighting the system because Medicare won't
cover self-injectable treatment. The point I want to make is, there
needs to be changes to Medicare coverage. Cancer patients sometimes
neither have the strength or the state of mind to fight as hard as I
did, therefore, I must stress to you, there needs to be changes in
Medicare to include coverage of self-injectable drugs.
Mr. Bilirakis. Thank you, Ms. Lohrman.
Ms. Nancy Davenport-Ennis. Please proceed, ma'am.
STATEMENT OF NANCY DAVENPORT-ENNIS
Ms. Davenport-Ennis. Thank you. I must say, Mr. Chairman
and members of the committee, that I think without question the
witnesses that you have heard have probably told a far more
compelling story than I.
I would like to share with you that I am before you today
as a cancer survivor, as a mother-in-law of a 25-year-old son-
in-law who is a cancer survivor, as an aunt of a 34-year-old
niece who was deceased with ovarian cancer in October of this
year.
I sit before you as an American who is concerned about the
health care delivery system of this country, in an effort to
try to do something to improve it. I sit before you also as a
founding executive director of the Patient Advocate Foundation,
which supplies direct patient services to patients who are
confronting access problems and insurance and job
discrimination and debt crisis problems.
I also sit before you as a founding executive director of
the National Patient Advocate Foundation, which is an
organization that has worked really very hard and very
deliberately to try to be able to have positive dialog with
both parties in our Nation as we seek to effect policy reform.
I would like to thank members of the subcommittee for their
leadership in ensuring that the issue of Medicare reimbursement
for injectable drugs and biologicals was addressed in the
Department of Health and Human Services funding bill. I am also
pleased that the Health Care Financing Administration issued a
program memoranda on March 17 that removes, for at least this
fiscal year, the barriers to Medicare reimbursement for
injectable drugs.
I would like to take this opportunity to explain the
involvement of our organization in this issue. In 1999, the
Patient Advocate Foundation handled 29,000 calls. Many of our
calls came from cancer patients, but we also served individuals
with AIDS, with other serious and life-threatening illnesses.
It is our mission to provide case managers and attorneys to
individuals who are having difficulty gaining access to health
care. When individuals are diagnosed with cancer or any other
serious illness, we feel they need to devote themselves to
fighting their disease, and not to be distracted by fighting
for access to the care that their physicians have recommended.
If there is a need to address access, we feel that it is our
role as a voluntary health agency to do that for those patients
that contact us.
The National Patient Advocate Foundation is an organization
that seeks to create avenues of access through policy and
legislative reform, that serves as a voice for those who are
seeking access in the system. Our advocacy activities are
informed and influenced by the information that we receive
through the counseling and case management activities through
the Patient Advocate Foundation.
When we observe trends in the cases that we handle, whether
they are a pattern of denials or an apparent shift in public or
private insurance coverage standards, we explore the reasons
for the apparent pattern. If appropriate, we address the
underlying policy behind a new or revised coverage decision,
and we seek to ensure patient's continued access to quality
care.
It is the work of public education that brings us to this
committee today. In 1998 and in 1999, we observed an increased
rate of Medicare denials for certain self-injectable drugs and
biologicals. Individuals who had previously received Medicare
coverage for injectable products were being denied this
coverage.
Our calls regarding denials came from individuals with
cancer, carcinoid syndrome, acromegaly, and AIDS, as well as
those who had received organ transplants and renal dialysis.
When we investigated this matter, we discovered that it had
been the consistent policy of Medicare to provide payment for
injectable drugs and biologicals if they are administered in a
physician's office, even though they may theoretically be self-
administered in some settings. The question of whether they
should be considered self-administrable and thus not covered by
Medicare have been resolved based on, and I quote from the
regulation, ``the usual method of administration of the form of
that drug or biological as furnished by the physician,''
according to the Medicare carriers' manual.
Under this provision, injectable drugs had long been
reimbursed when administered incident to physician services.
Unfortunately, in 1999, HCFA appeared to be considering changes
in its policy of reimbursement for injectable drugs, and a
number of carriers had begun to deny reimbursement for
injectable drugs.
The result for our patients was disastrous. Medicare
patients were left with the responsibility to pay for their own
medications and then to self-inject them. This results in
decreased quality of care. Injectable drugs cannot be easily
self-administered by the elderly or disabled, as you have heard
in earlier testimony. Our patients affirmed to us how these
changes would adversely affect their health.
We joined with our colleagues in the Cancer Leadership
Council to oppose efforts by HCFA to restrict reimbursement for
injectable drugs and biologicals. In addition, we supported
efforts to include a provision in Public Law 106-113, the
Department of Health and Human Services.
We would like to express our thanks to the Congress for its
action on this matter. Regrettably, enactment of Section 219 of
Public Law 106-113 did not result in immediate action by HCFA
to clarify with its carriers the policy for reimbursement of
injectable drugs. This memorandum should temporarily eliminate
the reimbursement difficulties that our clients have recently
encountered.
However, we also note that the program memoranda ``may be
discarded after September 30, 2000.'' HCFA appears to be
relying on the technicality that the provision related to
injectable drugs was included in an appropriations bill to
justify discarding the program memorandum at the end of the
year. Although we believe the intent of Congress on this matter
is clear, it may be necessary for Congress to revisit this
issue before the end of the fiscal year to prevent disruption
in services to Medicare beneficiaries.
In closing, I would like to state we believe the current
policy in reimbursement of injectable drugs and biologicals,
the policy announced in the March 17 program memorandum, is the
correct one for Medicare beneficiaries and for the program. We
urge that HCFA clarify that this policy is a permanent one. We
will be joined by the entire cancer community in opposing any
policy that will limit access to injectable drugs and
biologicals.
Thank you for indulging me.
[The prepared statement of Nancy Davenport-Ennis follows:]
Prepared Statement of Nancy Davenport-Ennis, Executive Director,
Patient Advocate Foundation and the National Patient Advocate
Foundation
Mr. Chairman and Members of the Subcommittee, I am Nancy Davenport-
Ennis, Executive Director of the Patient Advocate Foundation and the
National Patient Advocate Foundation. I would like to thank the members
of the Subcommittee for their leadership in ensuring that the issue of
Medicare reimbursement for injectable drugs and biologicals was
addressed in the Department of Health and Human Services funding bill.
I am also pleased that the Health Care Financing Administration (HCFA)
issued a Program Memorandum on March 17 that removes, for at least this
fiscal year, the barriers to Medicare reimbursement for injectable
drugs.
I would like to take this opportunity to explain our involvement in
this issue. The Patient Advocate Foundation is a national non-profit
organization that serves as an active liaison between patients and
their insurers, employers, and/or creditors to resolve insurance, job
discrimination, and/or debt crisis matters relative to their diagnosis.
The Patient Advocate Foundation seeks, through case managers and
attorneys, to assure patients access to care, maintenance of
employment, and preservation of their financial stability.
In 1999, the Patient Advocate Foundation handled 29,000 calls. Many
of our calls came from cancer patients, but we also serve individuals
with AIDS and other serious and life-threatening illnesses. It is our
mission to provide case managers and/or attorneys to individuals who
are having difficulty gaining access to health care. When individuals
are diagnosed with cancer or any other serious illness, they need to
devote themselves to fighting the disease and need not be distracted by
fighting for access to the care recommended by their physician. If
there is a need to address access, job discrimination, or debt crisis
issues, we are prepared to help with those matters.
The National Patient Advocate Foundation is an organization that
seeks to create avenues of access through policy and legislative reform
that serves as a voice for those who are seeking access to high quality
health care prescribed by treating physicians. Most of our activity is
directly related to improving access to care for individuals with
cancer. Our advocacy activities are informed and influenced by the
information we receive through the counseling and case management
activities in the Patient Advocate Foundation. When we observe trends
in the cases we handle--whether a pattern of denials or an apparent
shift in public or private insurance coverage standards--we explore the
reasons for the apparent pattern. If appropriate, we address the
underlying policy behind a new or revised coverage decision and seek to
ensure patients continued access to quality care.
It is the work of the Patient Advocate Foundation that brings us
here today. In 1998 and 1999, we observed an increased rate of Medicare
denials for certain injectable drugs and biologicals. Individuals who
had previously received Medicare coverage for injectable products were
being denied this coverage. Our calls regarding denials came from
individuals with cancer, carcinoid syndrome, acromegaly, and AIDS, as
well as from those who had received organ transplants and those on
renal dialysis.
When we investigated this matter, we discovered that it had been
the consistent policy of Medicare to provide payment for injectable
drugs and biologicals if they are administered in a physician's office
even though they may theoretically be self-administered in some
settings. The question of whether they should be considered self-
administrable--and thus not covered by Medicare--had been resolved
based on the ``usual method of administration of the form of that drug
or biological as furnished by the physician,'' according to the
Medicare Carriers Manual. Under this provision, injectable drugs had
long been reimbursed when administered incident to physician services.
Unfortunately, in 1999 HCFA appeared to be considering changes in
its policy of reimbursement for injectable drugs, and a number of
carriers had begun to deny reimbursement for injectable drugs. The
result for our patients was disastrous. Medicare patients were left
with the responsibility to pay for their own medications and to then
self-inject them. This results in decreased quality of care. Injectable
drugs cannot be easily self-administered by elderly or disabled
Medicare patients, and feared their care and health would be adversely
affected by a change in HCFA policy. Our patients affirmed to us how
these changes would adversely affect their health.
We joined with our colleagues in the Cancer Leadership Council to
oppose efforts by HCFA to restrict reimbursement for injectable drugs
and biologicals. In addition, we supported efforts to include a
provision in Pub. Law No. 106-113, the Department of Health and Human
Services Appropriations Act, to prevent HCFA from restricting coverage
for injectable drugs.
We would like to express our thanks to the Congress for its action
on this matter. Regrettably, enactment of Sec. 219 of Pub. L. No. 106-
113 did not result in immediate action by HCFA to clarify with its
carriers the policy for reimbursement of injectable drugs and
biologicals, and we again sought the intervention of Congress on this
issue. This Memorandum should temporarily eliminate the reimbursement
difficulties our clients have recently encountered. However, we also
note that the Program Memorandum ``may be discarded after September 30,
2000.'' HCFA appears to be relying on the technicality that the
provision related to injectable drugs was included in an appropriations
bill to justify ``discarding'' the Program Memorandum at the end of the
year. Although we believe the intent of Congress on this matter is
clear, it may be necessary for Congress to revisit this issue before
the end of the fiscal year to prevent disruption in services to
Medicare beneficiaries.
We believe the current policy on reimbursement of injectable drugs
and biologicals--the policy announced in the March 17 Program
Memorandum--is the correct one for Medicare beneficiaries and for the
program. We urge that HCFA clarify that this policy is a permanent one.
We will be joined by the entire cancer community in opposing any change
in the current policy for reimbursement of injectable drugs and
biologicals.
Mr. Bilirakis. Thank you very much, Ms. Davenport-Ennis.
Let me ask you, do you have an opinion as to why you think
HCFA all of a sudden issued the program memorandum in August
1997 changing its policy on self-administered drugs by virtue
of adding the language ``the individual patient's mental or
physical ability to administer any drug is not a consideration
for this purpose''? Why?
Virtually all of us raised that question with Mr. Hash. Was
anybody satisfied with his response?
Ms. Davenport-Ennis. I think in response to your question,
Mr. Chairman, certainly we have asked Mr. Hash that question.
We took our entire policy committee in to meet with Mr. Hash
shortly after that policy memorandum was issued. We do not
understand why it was issued, nor why there was that change.
Mr. Bilirakis. What has changed, other than--well, I was
going to say other than maybe pressure from Congress? But heck,
back in October we sent that letter forward. What has changed
between when they changed that policy and now all of a sudden
on March 17 they decided to go back to that original policy?
The head of HCFA cares about the health of people and
reimbursements as much as anyone. Mr. Hash certainly does. We
all do up here. We throw stones at each other, which is very
unfortunate, but I know we all believe that we all care.
I have been really scratching my head, wondering why in the
world would they do this all of a sudden; just pull it out of
the air? Then basically, in effect, they admitted their mistake
by changing it all just last week.
Ms. Story or Ms. Davenport-Ennis, were any of you
contacted, or do you know of any other patient groups who may
have been contacted prior to their having issued that August,
1997, PM?
Ms. Davenport-Ennis. I am not aware that any other group
within the Cancer Leadership Council that we work with actively
were contacted. However, I certainly could not speak with
absolute assuredness that they were not. But I have no working
knowledge or recollection.
Mr. Bilirakis. Ms. Story, you have no knowledge of that?
Ms. Story. No.
Mr. Bilirakis. Dr. Steinberg, do you have any impression of
that, any idea of any contact that you may have heard?
Mr. Steinberg. No.
Mr. Bilirakis. Mr. Hash said over and over and over again
that--is any representative of HCFA here? Are you taking notes?
Please. I more often than not ask that they stay over to listen
to the other panels, and I appreciate very much HCFA having
done that.
Mr. Hash said that the 1997 memorandum would clarify and
even expand, and he kept referring to expanding, expanding
coverage. Does anybody agree with that?
Ms. Rybicki, you of course very painfully described for us
how your physical and mental condition would have kept you from
self-administering the drug, and Ms. Sizemore, with a hell of a
lot of courage and guts, certainly described how her husband
would not have been able to do it.
Frankly, and I say this with HCFA present and with my
colleague to my left being here, the phrase that they have
thrown in here regarding not taking into consideration the
patient's mental or physical ability is what really troubles me
I think probably more than anything else. Where did that come
from? I just cannot imagine.
At this point I will defer to Mr. Strickland.
Mr. Strickland. Mr. Chairman, I detected that Ms. Lohrman
may have wanted to say something.
Mr. Bilirakis. I am sorry, did you? Please proceed, ma'am.
Ms. Lohrman. What they are saying is that they do not want
the bill passed, or the law changed to include injectable
drugs, is that what they are saying? That you don't want it to
where other people can get this drug?
Ms. Rybicki. No, that is not what I am saying at all. I am
hopefully speaking on behalf of everybody who needs to have it.
Ms. Lohrman. I misunderstood her. I was going to say, that
should be up to the doctor and the health care provider.
Mr. Bilirakis. Dr. Steinberg made that clear in his written
testimony. I missed some of his oral because I had some
community health center people out there who wanted to see me.
We have so much up here in our place.
All right, back to Mr. Strickland.
Mr. Strickland. Thank you, sir.
I was just sitting here listening to your testimony, and a
lot of thoughts came to my mind. A thought, I guess, that was
most troubling to me is that we are rationing health care in
America today. I don't think there is any question about that.
We need to face up to that fact. We need to ask ourselves if
that is what we want to do or want to continue to do, but we
are rationing health care.
There are people who need medications who cannot get them,
cannot afford them. That is the state of affairs in America
today.
I was also thinking of a quote by Hubert Humphrey who said,
you judge a society by the way it treats those in the dawn of
life, the children; those in the twilight of life, the sick and
the elderly; and those in the shadows of life, the disabled and
those who are in most need. Your stories are gut-wrenching.
I say to myself, this is America. We are a rich country,
and we do what we choose to do with our resources. We just
simply have not chosen to provide health care to the people in
this country who need it.
I strongly think we should do what we can to correct this
problem that has been brought to us. I think that is a step
that we can take and should take to guarantee you that in
September you will not have to worry about your benefits being
eliminated. But I have a question for Dr. Steinberg.
Dr. Steinberg, we have had some people suggest that we go
back--that HCFA go back to the old rules to cover whatever
injectable drugs HCFA covered before 1997. I wonder, though, if
going back to the old rules is going to resolve the controversy
about self-injectable drugs. Is it conceivable that drugs that
are injected by a doctor today could become for self-injection
in the future, or even in pill form?
Mr. Steinberg. It is more than conceivable, it is likely. I
think the point that you are making simply highlights the fact
that even sitting around talking about how to define ``self-
injectable,'' it is sort of a micro issue which hopefully we
can do something with, but it is not the issue, right?
The fact that certain drugs are self-injectable and
therefore are not covered, you know, we are talking about
whether this person can self-inject or that person can self-
inject. The reality is that there are hundreds of other
medicines that are oral that may have as big an impact on
patient's survival or quality of life. We have not even talked
about them today.
This is an anachronistic issue, this self-injectability. As
I say, it is a rare drug that you could not train at least one
patient to self-administer. So if the definition is could
somebody do it, well, it would wipe out coverage for almost any
injectable.
Mr. Strickland. So what in your judgment, as a physician,
is the best answer to this dilemma that we face? If you were
us--if you had the power to make a decision to solve the
problem, what would you suggest?
Mr. Steinberg. I guess I would suggest the following; that
if the Congress, through its legislation, has decided that, at
least to date, drugs that are not self-injectable or drugs that
are self-injectable will not be covered, as I indicated in my
testimony, it is not possible for you or somebody at HCFA or
anybody else other than the physician caring for a patient to
make an informed judgment as to whether or not a patient can or
cannot safely inject a drug.
So if we have to live within the box related to self-
injectability, I would leave that decision to the physician.
But at the same time, by the same token, I would encourage you
to recognize that this is the micro issue, and the macro issue
is that drugs have become an absolutely essential component of
health care today.
It does not make a lot of sense to have a program that is
supposed to enable people to get necessary health care and to
deny them access to what may be for them the most critical
component.
The reason I highlighted chronic disease is that the
treatments for chronic disease tend to be medication. They are
not surgery, they are not hospitalization. Those are treatments
for acute disease. But Medicare is supposed to cover acute and
chronic disease.
So I guess if I could wave a magic wand, I would make the
definition of ``self-administrable'' up to the physician. If
the physician deemed it self-administrable, then it would not
be covered under this law. But I would urge you to revise the
law to make all drugs available.
Mr. Strickland. Thank you, sir.
Thank you, Mr. Chairman.
Mr. Bilirakis. Thank you, Mr. Strickland. It bothers me
that we--do any one of you out there doubt that the entire
Congress of the United States wants to do and will make every
possible, honest effort to include prescription drugs in
Medicare?
Mr. Burr.
Mr. Burr. Thank you, Mr. Chairman. I am not sure exactly
where to start. I have a ton of notes I wrote, and probably
half of which I will get to.
Julie, let me just say one thing, I don't know that I could
have done what you just did. But for that I am very thankful.
It sent me back to visions, Mr. Chairman, of the FDA Reform
Act, the Modernization Act. People have since asked me how we
had the passion to go 2\1/2\ years through two different
Congresses to accomplish a bill that people said in the
beginning could not be done, and my answer was, it was because
of the individuals that came 1 year to lobby me about the
sickness that they had that did not return the next year,
because they had a sense of urgency that we never figured out
then.
Clearly that is the human side, sometimes we forget that
not only do we have policy decisions to make, we have human
faces behind the issue to remember, and an urgency that goes
along with it that affects lives, and affects families in ways
that many of us don't know.
I want to highlight one thing Julie said in her comments.
That was that there was a fear that the actions taken by HCFA,
right or wrong, would be replicated in the private sector. That
is a fact. There is significant history to prove that that is
the case. I am not saying that it is always bad, but it is a
statement that you can accept with a great degree of certainty.
If we produce a product that is good, the private sector
will replicate a good product. If we produce a product that is
bad, that does not take into consideration all of the things
that it should, because it was the Health Care Financing
Administration, the private sector will take the opportunity to
replicate that.
I know there is somebody here from HCFA. I will not ask who
they are. I hope they will carry that message back, and I hope
they will also carry the message back that I have heard, and
that is that regardless of how much I think of Mike Hash and
Nancy-Ann, I think that we all agree that what we have heard so
far does not give us a great deal of comfort that we have
addressed the problem, whether short-term or long-term.
I would like to be specific on a few questions, if I can.
Dr. Steinberg, you said earlier that were we to design
Medicare today, it would have included a drug benefit. I
totally agree with you. I would also add a caveat to that. Were
we to design Medicare today, it would not resemble in any way,
shape, or form the model that we currently have.
Would you agree with that?
Mr. Steinberg. I have a little more difficulty responding
to the latter part. Clearly I agree with you that drugs would
be included. I guess in order to answer the latter part of the
question, I would have to know a little more specifically which
aspects----
Mr. Burr. Let me just use the analogy that I see sort of
behind this issue that we are here on today. Because of
technology, we are trying to make a determination about whether
we cover a drug that technology allows us to self-inject which
before was something we did in a hospital or doctor's office.
Is that a fair observation on my part?
Mr. Steinberg. Yes. As I mentioned in my testimony, both
oral and written, I think the current situation, whether it is
due to the Social Security Act or whether it is due to how it
has been interpreted, provides perverse incentives to both
manufacturers and to physicians.
As I tried to describe, to have a situation where a
manufacturer reformulates a product that could be administered
much more simply one way but it is not covered that way, have
them reformulate it so it can be only administered
intramuscularly by a professional and therefore be covered,
that should not be what the effect of a law is.
Similarly, to have a physician prescribe a second best
product simply because they have to administer it, it is more
expensive but it is covered, that also is a perverse incentive.
So I guess my view is that whatever policies we have should
be policies that encourage innovation, that also encourage I
will say appropriate high quality health care, and some
accountability for that. Because otherwise we could spend every
dollar in the country, but it does not mean it would be well
spent.
Mr. Burr. How does the private sector delivery system adapt
to the ever-changing availabilities in medicine, whether they
are pharmaceuticals or devices or techniques?
Mr. Steinberg. They do it as imperfectly as anybody else.
Mr. Burr. But they do it without congressional legislation
forcing it to happen. Is that right?
Mr. Steinberg. They sure do, but they do it under different
types of constraints. They do it under contractual constraints,
under policy constraints.
For the past 10 years, I have been a member of a national
Blue Cross/Blue Shield medical advisory panel. That panel is
the panel that makes determinations about whether or not drugs,
devices, procedures are safe and effective.
I can tell you that it is a laborious process. It involves
a considerable amount of work, and many of the decisions are
difficult, oftentimes because the requisite information that
one needs to make those judgments is not available.
The issue of making decisions about new technology is
problematic everywhere, and I believe that no matter what
system we have, we are still going to have to wrestle with
which new technologies are appropriate to use and which are
not.
Mr. Bilirakis. The Chair would announce that we are now
going into a second round, and the Chair yields to the
gentleman from North Carolina, Mr. Burr.
Mr. Burr. The gentleman from North Carolina would thank the
Chair for letting him lead off this series.
Ms. Story, let me just ask you a very simple question. Were
there drugs and biologics that Medicare paid for in 1997 that
after this memorandum are not reimbursable today?
Ms. Story. Yes.
Mr. Burr. A lot?
Ms. Story. A good number.
Mr. Burr. So for anybody that would stand up and say that
nothing has changed, that is misinformed? Would that be an
accurate statement?
Ms. Story. Yes.
Mr. Burr. I tried to be very selective as to how I chose
those words.
Mr. Chairman, I would like to enter into the record a
letter dated February 29, 2000. It was a letter from the Health
Care Financing Administration. It referenced the memorandum.
I think that it is important that--are you familiar with
that, Ms. Story? I think it was from a South Carolina--staff
can make that available.
Mr. Bilirakis. Without objection, that will be done.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T4029.021
[GRAPHIC] [TIFF OMITTED] T4029.022
Mr. Burr. What did that letter say?
Ms. Story. Basically it said that with Interferon,
Interferon that had been covered prior to 1997 was no longer
being covered.
Mr. Burr. This is the letter dated February 29, 2000?
Ms. Story. Yes. That would be correct.
Mr. Burr. What kind of impact does that have?
Ms. Story. It really means, for a patient that has some
form of cancer that requires treatment with Interferon, that
they are not going to get it.
Mr. Burr. Is that a common drug for the treatment of
cancer?
Ms. Story. Certain kinds of cancer.
Mr. Burr. Certain types?
Ms. Story. Yes.
Mr. Burr. How does that letter fit with Mr. Hash's
testimony that nothing has changed?
Ms. Story. It doesn't, because it has. After 1997 there
were changes, and our patients are not having drugs covered.
They don't have access to the drug. They don't have the money
to pay for the drugs themselves. They don't have professional
care or expertise that they might need, should it be self-
injectable.
Interferon can be a dangerous drug for a patient home alone
that does not know what to look for. They have lost all that,
in addition to all the other losses that they face.
Mr. Burr. Mr. Chairman, I have a lot more, but I don't know
that it necessarily would achieve any other answers than what I
have heard so far.
My only hope, let me say this to all of the witnesses--I
want to personally thank them for their willingness to come
here and share with us. It is really the intent, I won't say of
this committee but I will say of this Congress, to figure out,
one, how to extend drug coverage to seniors, because in fact
those who say if we designed it today, it would be part of it,
they are right. But I think it is also time that we try to
figure out what the delivery system for health care for our
seniors and for ourselves will look like in the future.
As Julie pointed out, the actions taken by government
entities have a significant influence on the policies of the
private sector, of private sector entities at some point after
that.
I am confident that we can get this closer to perfect than
many give us odds on doing, Mr. Chairman, like the FDA. I am
convinced it will not be easy, but I think there are some
people who are also convinced that we are not going to go away
until we finish. For your leadership on that, I am thankful.
I yield back.
Ms. Sizemore. May I say something, please? This knowledge
that I learned just this last week of how Medicare decisions
can affect the private sector is not something that a lot of
people know. I shared this with my family, I shared it with a
man on the plane flying here, and they were blown away. They
could not believe that that is what would happen.
I hope you all realize that a lot of the American people do
not know this. If they found out about this, I don't know what
their reaction would be, but you would have, I am sure, at your
private offices your phone lines ringing off the hook over
this, because it would affect everyone.
But unfortunately, most of the American people do not know
that this could happen. They do not realize it, because they
are busy with their lives.
Mr. Burr. Mr. Chairman, let me just say to Julie, I hope
she will give us a couple months before she tells the other 249
million people, because I think we can accomplish a lot in that
period of time.
Mr. Bilirakis. If we truly want to, all of us, if we truly
want to.
Mr. Strickland.
Mr. Strickland. Thank you, Mr. Chairman. I think I can be
brief.
I had an experience over the last weekend in Columbus,
Ohio. I was eating in a senior citizens center, and an older
gentleman told me that he had just been diagnosed about a year
earlier with Parkinson's disease.
He says, I take six prescriptions. One of my prescriptions
costs over $200 a month. My wife, the only way we can make it
is for my wife to continue to work. I asked him how old his
wife was, and she is 78 years old.
I listened to you talk about cancer and multiple sclerosis
and various illnesses and diseases. I am thinking, we ought not
to be making these kinds of choices. We ought not to be
deciding who gets medicine and under what conditions.
It is true that, if not all of us in the Congress, most of
us in the Congress want a prescription drug benefit under
Medicare, but how we do that is very important, a very
important question that needs to be resolved.
Dr. Steinberg, I just have a question for you that I think
I know the answer to, but I am just wanting to get this on the
record. You work with a lot of people, and some of the people
you work with are poor people. Some of the people you work with
are people with modest incomes, or even people with very
healthy incomes.
As a physician, knowing what you know, will a prescription
benefit that is targeted only toward low-income people solve
the problem that we face in this country, or even the problems
that many people who are represented here at this table face?
Mr. Steinberg. Absolutely not. What you say is definitely
the case. As I mentioned, I had many patients of modest means,
they would not be considered poor, they would be considered
working class, in East Baltimore who simply did not fill
medications, prescription medications, because they didn't have
enough means to do so. So it is not limited to the poor.
If I could, I would also like to say that, as you all
realize, a prescription benefit is not a prescription benefit
is not a prescription benefit.
To just say that we will add a prescription benefit will
not necessarily solve any problem. It depends on how that
benefit is designed, not just who it is targeted at.
So I would encourage you to understand that for those who
are on chronic medications that they have to fill monthly, that
they are, as we found in our study, spending $5,000, $10,000 a
year. And to give $1,000 worth of coverage to someone who has a
need for $10,000 worth of medication is like saying, we will
give you enough to treat your diabetes, but we don't have
enough to treat your heart failure or angina. And I am not sure
we have accomplished a lot in that sort of circumstance.
Mr. Strickland. I represent a district in southern Ohio, an
Appalachian district, where the median income for a family of
four is less than $22,000. So you see the dilemma that many of
the people I represent face.
I want to thank each of you for coming here. I want to
thank our good chairman for his leadership. He is a wonderful
person to work with, and I think all of us on this committee
value him.
Mr. Bilirakis. Thank you very much for that, Ted.
Dr. Steinberg, what you are really saying is that there--
anything we do should have a stop loss attached to it. We can
use the term ``catastrophic'', although we don't like to use
that term, for obvious reasons.
Is that what you are saying, basically, that there ought to
be----
Mr. Steinberg. I believe there is a need for the high end
coverage. There are many ways it could be designed, but my
point is to cap a benefit, as even many private policies
currently do, at $1,000, it does not cut it for somebody who--
--
Mr. Bilirakis. That is something, frankly, and I think Mr.
Strickland knows that, we have been working awfully hard on.
Granted, the process here being what it is, you would like to
think that you can get all of the people, both sides of the
aisle, together in a room and get things worked out, but
unfortunately, that just does not work. So you sort of have to
first convince your colleagues on your side to come up with a
position, and then try to share.
Mr. Strickland. Mr. Chairman, most people are not as
cooperative as we are.
Mr. Bilirakis. Getting back to Mr. Hash's written
testimony, and he is not here and I hope he does not mind, I
certainly don't mean to attack him, but it says here in the
second page, at the top of the second paragraph, the top of
page 2 of his written testimony, ``Our clinicians at HCFA are
concerned that creating such a narrow exception to the ban on
Medicare coverage for outpatient drugs could create an ethical
dilemma for compassionate physicians when caring for patients
who can self-administer drugs but cannot afford the drugs they
need. This approach could compound the current inequities in
coverage, and may also create program integrity problems.''
I don't disagree with that. But so what, I guess is the
question I ask. On one hand we say we want all prescription
drugs covered. We have had a history of covering some of them.
Are we helping the situation by taking away some of that
coverage that has been there, in existence, for all these many
years? I think not. We need to retain that partial coverage,
expand upon it, and improve upon it.
Again, I am having problems--all of us here are having
problems trying to understand the reason for that PM back in
August 1997.
Ms. Davenport-Ennis, yesterday's edition of Health News
Daily quotes a senior HCFA official about the agency's
perspective on their report policy change. Are you familiar
with what I am referring to?
Ms. Davenport-Ennis. Very.
Mr. Bilirakis. I will just go ahead and read it: ``the
guidance had clarified that although self-administered drugs
are not covered under Part B, a carrier may choose to provide
reimbursement if such a drug is administered by a physician in
order to teach the patient the correct self-injection
procedure.''
I guess the question is, does HCFA's view of their program
memorandum satisfy your concerns, or this more recent program
memorandum, if you will, satisfy your concerns, or does it
really raise a fear that they are trying to undermine, and I
hate to put it this way, but to undermine Medicare coverage of
injectable therapies?
I don't mean that as strictly as it sounds, undermine. But
that is really what has been happening.
Ms. Davenport-Ennis. I would like to respond with some
specificity. I do feel that my concern at reading that today is
that once again it appears that HCFA is saying to their
carriers, this is still a discretionary matter, that you may
choose to interpret this the way you feel is appropriate.
We do not read the law that was passed as being
discretionary. We read it as having very specific instruction
for the carrier.
We find over and over again with both the physicians who
refer their patients to us and the thousands of patients with
whom we interact that there seems to be a global plea which is,
simply, help us understand what the rules are, whether they are
in the private health care sector or whether they are in the
Medicare sector.
If you will help us understand what the rules are, then we
will have confidence in that and we will feel reassured that if
we follow those rules, then in fact the result will be that we
have the coverage we think we have. We continue, since the
memorandum of 1997, in all sincerity, to find that the
reasonable expectations that we had as we interpreted the
language evaporate from time to time. We find inconsistencies,
depending upon which carrier memorandum we might be reading
about which particular product in which particular State.
So when we read what the Health News Daily had to say
yesterday we found it very troubling, because I can see in my
office the phones beginning to ring again with carriers who may
in good faith be trying to follow the direction that perhaps
they think is being reflected in the Health News Daily, only
again to maybe issue another memorandum, as the one that was
just issued in South Carolina on February 29, that was so
troubling and that once again caused those phones to start to
ring.
So it is a huge concern for us. We also, in closing, must
say that when the U.S. Congress looks at any issue that
involves health care, and once you have had thorough hearings
on the matter and you voted it out of committee and you voted
it off the House floor and off the Senate floor, and it becomes
a law of the land, within our organization, I can assure you,
we view that law as stout. We view that law as one that
deserves respect from every citizen, every entity that is being
directed by that law.
We have great concern when it comes to a sense on any part
that it is a discretionary matter when the U.S. Congress passes
a law.
Mr. Bilirakis. That should tell us something.
Mr. Steinberg. Mr. Chairman, can I comment on that?
Mr. Bilirakis. Without objection.
Mr. Strickland. No objection.
Mr. Bilirakis. Please.
Mr. Steinberg. It seems clear from listening today that the
language in the statute, at least to a number of people, is
ambiguous. I would just like to say that anything your
committee can do to clarify what you think that language should
mean would take on the effect of eliminating the problem with
discretion or variability in interpretation.
So I guess I would ask for all the help you can provide to
clarify this.
Mr. Bilirakis. And to turn it around, we need your help. We
are an ivory tower. We have probably more physicians maybe in
the Congress than we have ever had. But the truth of the matter
is that we have some practical experience, but not really very
much. Yet, we have to make these very tough decisions. We don't
know how it is going to affect the patient out there and the
medical provider. That is why it is so very important that we
do get your inputs to help us out.
Dr. Steinberg and Ms. Davenport-Ennis, particularly you
mentioned it, over the years, and you can imagine in my
position, I just cannot even walk by a doctor back home without
him stopping me and complaining about this or that; and Ted
gets that, we all do.
But the biggest complaint that we have had is, look, I want
to follow the law. I want to follow the law, but it is
inconsistent. We need some clarification and some consistency
on how to file the claims and the reimbursements.
When my son started his medical practice--he is also an
internist--he could not afford any of the computer systems and
all that equipment, and he had the pegboard system which you
are probably familiar with. Maybe most doctors start out that
way.
It was in January at the beginning of a new Congress, so I
had a lot of time at home. I spent a lot of time in his office
working with the pegboard system, and trying to understand the
different classifications, the coding and things of that
nature. My God, what you all go through, thanks to us.
Well, you are really all wonderful, and the courage, of
course, of Ms. Sizemore, Ms. Rybicki, and Ms. Lohrman, have
shown, and of course the knowledge that Dr. Steinberg and Ms.
Story and Ms. Davenport communicated to us is very valuable.
I like to think that we will address prescription drugs,
the overall picture, in time to keep what you are concerned
about from happening. I don't know. But it takes two to tango,
and that is a problem.
We might do something. If we don't, we certainly ought to
shore up this area. I know with cooperation with people like
Mr. Strickland and so many others, we are going to do it. Thank
you very much for being here. God bless you.
Again, you are available for any written questions we may
want to offer to you to respond?
Ms. Davenport-Ennis. Yes.
Ms. Sizemore. Yes.
Mr. Bilirakis. The hearing is concluded.
[Whereupon, at 2:06 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:
Responses for the Record of Michael Hash, Deputy Administrator, Health
Care Financing Administration
Question 1. According to your testimony, it was never HCFA's intent
for the August 13, 1997 directive to reduce or limit the Medicare
program's longstanding coverage of professionally-administered
injectable drugs. Is that an accurate reading of your testimony?
Answer: Yes. The August 13, 1997 memorandum was a clarification of
the longstanding HCFA policy with respect to coverage for drugs and
biologicals that cannot be self-administered. In fact, the memo
emphasized that Medicare claims processing contractors may cover
generally self-administered drugs when a provider is administering the
drug in order to teach a patient how to self-administer. We did this to
encourage more coverage in these situations.
Question 2. The Committee heard testimony, however, that a number
of professionally-administered injectable drugs which were routinely
reimbursed prior to August 13, 1997 were denied coverage after that
date. Can you confirm or do you deny that such has been the case?
Answer: This is possible. Like many specific coverage policies in
Medicare's history, determination of whether a specific drug can be
self-administered has been left up to the medical directors of each
claims processing contractor. Instructions to Medicare claims
processing contractors on this issue have been provided through the
Medicare Carrier Manual and were updated in 1995. Those instructions
stated that drugs may be covered only if they ``are of the type that
cannot be self-administered.'' Some carriers expressed confusion over
this policy, which may have led to improper reimbursements. In order to
address carrier confusion, we issued a memorandum clarifying the
national guidance in our carrier manual on August 13, 1997.
Question 3. From what the Committee has learned about these
denials, the Medicare carriers involved are asserting that their
actions to restrict Medicare are a result of the August 1997
transmittal. How do you respond?
Answer: Instructions to Medicare claims processing contractors on
this issue have been provided through the Medicare Carrier Manual and
were updated in 1995. Those instructions stated that drugs may be
covered only if they ``are of the type that cannot be self-
administered.'' Rapid advancements in pharmacolgical and medical
developments caused confusion in carriers' interpretation of Carrier
Manual instructions, which may have led to improper reimbursements. The
August 13, 1997 memorandum was a clarification of the longstanding HCFA
policy in this area. This memorandum did not increase restrictions on
beneficiary access to prescription drugs. It clarified for carriers the
criteria for making drug coverage decisions as required by the Social
Security Act.
Many of these types of coverage decisions are left to carriers'
discretion, and we try to ensure their decisions are consistent with
statute. The August 1997 memorandum reminded carriers that according to
the way the statute is written, coverage decisions should be based on
the nature of the drug or biological in question rather than on the
capacity of any one individual.
Question 4. It has come to our attention that the Medicare carrier
serving South Carolina--Palmetto Government Benefits Administrators
(PGBA)--has informed cancer caregivers that injections of Interferon
for cancer patients will not be covered unless the carrier is convinced
that the injection incident to a physician's professional services is
``medically necessary. This requirement is in direct contradiction to
the reimbursement process that existed prior to August 1997, and
appears to ignore the Program Memorandum issued by HCFA on March 17,
2000. Of even greater concern to the Committee, however, is the
statement by a senior officer at PGBA that HCFA has recommended the
carrier adopt and maintain this course of action. What is your response
to this set of circumstances? What will you do to correct the course of
action adopted by PGBA, and when will the Committee be informed of
corrective action you will take?
Answer: Any items or services covered by Medicare by law must be
medically necessary. Policy relating to medical necessity, as described
in section 2049.4 of the Medicare Carriers Manual, remains unchanged,
both before and after the August 1997 memo. Medical necessity
determinations are made at carriers' discretion. Policy relating to the
issue of injectable drug types is found in a separate section of the
Medicare Carriers Manual, section 2049.2. The August 13, 1997 memo, as
well as section 219 of the Appropriations Act, only refer to Carrier
Manual section 2049.2, and not the section on medical necessity.
Question 5. As you know, the vast majority of my colleagues support
the establishment of a broad Medicare drug benefit. However, the case
of coverage of professionally-administered injectable drugs raises an
important issue that must be addressed as we move forward on the
broader reform effort. The President's proposal to establish a new Part
D optional drug benefit specifically excludes the currently covered
outpatient prescription drugs. The current confusion regarding
injectable drugs has raised concerns that, if the President's proposal
were enacted into law, these drugs would not be covered under either
Part B (due to ongoing carrier actions and the time-limited nature of
the March 17, 2000 Program Memorandum) or under Part D (due to the
design of the President's plan). In the meantime, there are patients
who used to have some important injectable drugs covered by Medicare
and now find themselves in a bureaucratic snafu which is leading to
denials of coverage. While Congress and the Administration are
exploring the creation of a broad Medicare drug benefit, will HCFA take
definitive steps to resolve the problem faced by these seniors and the
apparent confusion of the carriers?
Answer: Under the President's proposal, prescription drugs would be
covered either under Parts A and B or the new Part D. Those that are
covered under A or B would retain such coverage to the extent that the
benefit has not expired, at which point Part D would pick up the
coverage. Those drugs that are not covered under Parts A or B would be
covered under Part D.
We believe that all prescription drugs would be covered and no one
would be ``caught in the middle.'' We are holding a series of town hall
meetings on the issue of injectable drugs. When the restrictions
included in the FY 2000 Appropriations Act expire, we plan to publish a
proposal in the Federal Register offering several different options for
determining ``self-administered,'' including options which take patient
characteristics into account. When finalized, this definition would
serve as a basis for determining coverage under Part B versus Part D.
Question 6. The March 17, 2000 Program Memorandum advises carriers
to discard it after September 30, 2000. This statement suggests to many
of us that it may be HCFA's intent to restrict Medicare program's
longstanding coverage of professionally administered injectable
therapies after that date. What do you think will happen to seniors and
people with disabilities who depend upon Medicare coverage of these
drugs after September 30, 2000? In light of the continuing action taken
by Palmetto Government Benefits Administrators and other carriers, will
HCFA amend the Program Memorandum to make permanent the current ban on
the restriction of this coverage? If not, then why?
Answer: Rather than amend the Program Memorandum, we would like to
pursue the issuance of a proposed rule to solicit public comment on the
definition of the term ``self-administered'' to solicit input from the
broadest possible range of stakeholders. We attempted this previously,
but postponed the proposal out of concern that we not appear to violate
the appropriations language, In lieu of a broader solicitation through
the Federal Register, and as instructed in the Appropriations Act
conference report, we are scheduling town hall meetings to allow
interested parties to discuss this issue and available options. The
first meeting is set for May 18th in Baltimore. The information
collected during these town hall meetings will provide HCFA with
guidance in considering future steps on this topic that was in effect
before the August 1997 memorandum.
Question 7. Included in your final rule on Medicare's Prospective
Payment System for Hospital Outpatient services (HCFA-1005-FC) issued
on April 7, 2000, you state ``Drugs that can be self-administered are
not covered under Part B of Medicare.'' Yet in section 219 of the
Consolidated Appropriations Act of 1999, Congress directed HCFA to
continue Medicare's coverage policy that was in effect prior to August
13, 1997, which covers drugs usually administered incident-to a
physician's services. Do you view your March 17 Program Memorandum
issued to implement section 219 of the Consolidated Appropriations Act
of 1999 as consistent with the statement in the April 7, 2000 final
rule?
Answer: The Prospective Payment System for Hospital Outpatient
services final rule states ``Drugs that can be self-administered are
not covered under Part B of Medicare (with specific exemptions for
certain oral chemotherapeutic agents and antiemetics, blood-clotting
factors, immunosuppressives, and erythropoietin for dialysis
patients).'' This statement is consistent with the current Medicare
payment policy.