[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[Extensions of Remarks]
[Pages 17134-17135]
[From the U.S. Government Publishing Office, www.gpo.gov]




  LEAST COSTLY ALTERNATIVE POLICIES: IMPACT ON PROSTATE CANCER DRUGS 
                     COVERED UNDER MEDICARE PART B

                                 ______
                                 

                            HON. KEN CALVERT

                             of california

                    in the house of representatives

                      Thursday, December 13, 2012

  Mr. CALVERT. Mr. Speaker, I rise today to bring to the House's 
attention a November 2012 report by the Department of Health and Human 
Services (HHS) Office of Inspector General (OIG), which I requested, 
titled Least Costly Alternative Policies: Impact on Prostate Cancer 
Drugs Covered Under Medicare Part B (0E1-12-12-00210). I ask that the 
Findings, Conclusion and Recommendation of the report be entered into 
the Congressional Record. The full report can be found at: https://
oig.hhs.gov/oei/reports/oei-12-12-00210.asp.
  In 2004, the HHS OIG concluded that Medicare carriers should apply 
parity reimbursement to a group of drugs covered under Medicare Part B 
known as LHRH agonists. This recommendation was in part to remove 
economic incentives for providers from the prescription process. The 
HHS OIG further concluded that the implementation of parity pricing for 
LHRH agonists would produce savings of $40 million per year. Following 
this recommendation, the Centers for Medicare and Medicaid Services 
(CMS) encouraged carriers to apply parity reimbursement policies to 
LHRH agonists. In response to a court decision concerning another class 
of Part B drugs, CMS withdrew utilization of parity reimbursement for 
LHRH agonists in April of 2010.
  In response to concerns expressed to me that the withdraw of parity 
reimbursement may have created an unintentional economic incentive for 
providers to prescribe the costliest drugs in the LHRH class, I 
requested HHS OIG look into the matter.
  In their November 2012 report, HHS OIG found that parity pricing 
would have saved the Medicare program $33.3 million dollars had it been 
in place between the third quarter of 2010 and the second quarter of 
2011. What's more, $6.7 million of these savings would have been 
realized by Medicare beneficiaries in the form of reduced coinsurance 
payments. Additionally, the November 2012 HHS OIG report stated that 
parity pricing policies may be a useful tool for conserving taxpayer 
funds in the Medicare program.
  Mr. Speaker, given Medicare's current fiscal outlook, it is 
imperative that policy decisions be made with the program's fiscal 
health, as well as the patient's health, in mind. I encourage my 
colleagues to read the HHS OIG report and I look forward to working 
with my colleagues in Congress to address the OIG's recommendations and 
ensure the fiscal health of Medicare for generations to come.

                                Findings


 Medicare and its beneficiaries would have saved $33 million in 1 year 
        if LCA policies for LHRH agonists had not been rescinded

       If LCA policies had been in effect between the third 
     quarter of 2010 and the second quarter of 2011, payment 
     amounts for Lupron, Eligard, and Zoladex would have been 
     based on that of the least costly alternative, Trelstar. As 
     shown in Table 2, the potential savings per dose in each 
     quarter would have ranged from $1.61 to $33.49 for Zoladex 
     and from $17.70 to $40.85 for Lupron and Eligard.
       If the more expensive products had been reimbursed at the 
     lower price in each quarter under review, total expenditures 
     for monthly injections over the year period would have been 
     reduced from $264.6 million to $231.3 million, yielding a 
     total savings of $33.3 million (13 percent). Twenty percent 
     of these savings ($6.7 million) would have been realized by 
     Medicare beneficiaries in the form of reduced coinsurance 
     amounts.

                                 TABLE 2: PAYMENT AMOUNTS FOR MONTHLY INJECTIONS
----------------------------------------------------------------------------------------------------------------
                                                                        Third      Fourth     First      Second
               HCPCS Code                            Brand             Quarter    Quarter    Quarter    Quarter
                                                                         2010       2010       2011       2011
----------------------------------------------------------------------------------------------------------------
Payment Amounts for the Least Costly Product
J3315...................................  Trelstar..................    $164.59    $181.93    $176.27    $197.31
Additional Amounts Paid for More Expensive Product
J9202...................................  Zoladex...................    +$33.49    +$12.36    +$26.08     +$1.61
J9217...................................  Lupron, Eligard...........    +$40.85    +$26.28    +$32.83    +$17.70
----------------------------------------------------------------------------------------------------------------
Source: Medicare reimbursement amounts published by CMS for third quarter 2010 through record quarter 2011.

       During the year before LCA policies were rescinded, the 
     most costly LHRH monthly injections--Lupron and Eligard--were 
     administered at about twice the rate of the least costly 
     alternative, Trelstar (Figure 1). However, utilization of 
     these pricier drugs was declining during this time, 
     decreasing 11 percent from the second quarter of 2009 through 
     the first quarter of 2010. Meanwhile, utilization of Trelstar 
     was rising, increasing almost 5 percent over the same four 
     quarters.
       As shown in Figure 1, utilization patterns for monthly 
     injections shifted dramatically in favor of the costlier 
     products almost immediately after LCA policies were 
     rescinded. Utilization of Lupron and Eligard increased 
     substantially, rising a total of 31 percent from the 
     beginning of the second quarter of 2010 through the end of 
     the second quarter of 2011.
       During the same period, the administration of Trelstar 
     plummeted by 74 percent, with the largest utilization drops 
     occurring in the quarter during which the LCA policies were 
     removed and the first full quarter after. By the end of the 
     second quarter of 2011, Lupron and Eligard were administered 
     at almost 10 times the rate of Trelstar.
       Although the administration of Zoladex decreased over the 
     entire 27 months under review, utilization remained extremely 
     low relative to utilization of Lupron; Eligard; and, to a 
     lesser extent, Trelstar.


  However, the overall utilization of LHRH agonists has been steadily 
                               decreasing

       Despite variations in the administration of individual LHRH 
     agonists, the number of doses of LHRH agonists administered 
     overall for the treatment of prostate cancer began decreasing 
     at least a year before CMS instructed contractors to rescind 
     LCA policies and continued to fall for more than a year 
     afterward. This downward trend was evident not only for the 
     more commonly administered monthly injections, but also for 
     annual implants.
       The number of monthly injections used to treat prostate 
     cancer decreased about 7 percent during the year before 
     elimination of LCA policies and continued to decrease another 
     5 percent in the 15 months after, resulting in an overall 
     decrease of 12 percent from the second quarter of 2009 
     through the second quarter of 2011. (See Figure 2.)
       The overall decrease in the administration of the annual 
     Vantas implant was even more pronounced. The number of these 
     implants used to treat prostate cancer fell by 23 percent in 
     the year prior to elimination of LCA policies and continued 
     to fall another 23 percent in the 15 months after, resulting 
     in an overall decrease of 41 percent
       Although the use of LHRH agonists has been decreasing, we 
     did not find a compensatory increase in another type of 
     hormone therapy, the simple orchiectomy. The number of these 
     procedures performed to treat prostate cancer declined 15 
     percent during the year before the elimination of LCA 
     policies and continued to decline an additional 16 percent 
     afterward.
       A study published in 2009 in The Journal of Urology 
     identified a similar reduction in the use of hormone therapy 
     to treat prostate cancer. This study, which examined claims 
     and payment data from 2003 to 2007, attributed the overall 
     reduction in hormone therapy to a number of different 
     factors, including a decrease in Medicare payment amounts 
     following the implementation of the ASP-based reimbursement 
     methodology, the increased use of intermittent hormone 
     therapy, and an increased recognition of the adverse effects 
     associated with hormone therapy. The study authors conclude 
     that these factors, taken together, may have resulted in a 
     more discriminating physician practice pattern and shrinking 
     pool of appropriate candidates for LHRH agonists.

[[Page 17135]]



                     Conclusion and Recommendation

       In 1995, Medicare contractors began using LCA policies to 
     control the cost of LHRH agonists used to treat prostate 
     cancer. However, CMS eliminated these policies in April 2010 
     as a result of a 2009 court ruling stating that Medicare law 
     did not authorize the use of an LCA policy for an inhalation 
     drug covered under Medicare Part B. Congressman Ken Calvert 
     subsequently raised concerns that elimination of LCA policies 
     for prostate cancer drugs may have provided physicians with 
     an incentive to administer costlier drugs to patients.
       Our results indicate that Medicare spending on clinically 
     comparable LHRH agonists is higher in the absence of LCA 
     policies, costing Medicare and its beneficiaries $33 million 
     in 1 year. Our results also confirm changes in utilization 
     patterns for LHRH agonists, some of which appear to have 
     occurred independently of LCA policies and some of which 
     coincided with their removal. Specifically, the use of 
     hormone therapy has been decreasing overall, which may be 
     attributable in part to Medicare reimbursement but may also 
     be influenced by clinical factors, such an increased 
     awareness of hormone therapy's health risks. In contrast, the 
     shift in utilization patterns in favor of costlier products 
     coincided directly with the removal of LCA policies.
       LCA policies may be a useful tool for conserving taxpayer 
     funds, provided that patients retain access to appropriate 
     care; however, in light of the 2009 court ruling, LCA 
     policies are not likely to be restored without legislative 
     action. Therefore, we recommend that CMS:


 Consider seeking legislative authority to implement LCA policies for 
              Part B drugs under appropriate circumstances

       By seeking a legislative change to amend the current 
     statutory Medicare provisions applicable to Medicare Part B 
     drugs, CMS could regain the flexibility to implement LCA 
     policies for certain clinically comparable products under 
     circumstances it deems appropriate.

                          ____________________