(1) The 2001 report of the Medicare Payment Advisory Commission to Congress states that ‘to help ensure beneficiaries’ access to high-quality care, Medicare payments should correspond to the cost efficient providers incur in furnishing this care’. Payments that do not meet this objective may create barriers to access.
(2) Intravenous immune globulin (IVIG) is a human blood plasma derived product, which over the past 25 years has become an invaluable therapy for many chronic conditions and illnesses, including primary immunodeficiency diseases, autoimmune, and neurological disorders. For many of these disorders, IVIG is the most effective and viable treatment available, and has dramatically improved the quality of life for persons with these conditions and has become a life-saving therapy for many.
(3) The Food and Drug Administration (FDA) recognizes each IVIG brand as a unique biologic. The differences in basic fractionation and the addition of various modifications for further purification, stabilization, and virus inactivation/removal yield clearly different biological products. As a result, IVIG therapies are not interchangeable, with patient tolerance differing from one IVIG brand to another.
(4) The report of the Office of the Assistant Secretary for Planning and Evaluation (ASPE), Department of Health and Human Services (DHHS), ‘Analysis of Supply, Distribution, Demand, and Access Issues Associated with Immune Globulin Intravenous (IGIV)’, issued in May 2007, found that IVIG manufacturing is complex and requires substantial upfront cash outlay and planning and takes between 7 and 12 months from plasma collection at donor centers to FDA lot release.
(5) The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 changed Medicare’s reimbursement methodology for IVIG from average wholesale price (AWP) to average sales price plus 6 percent (ASP+6), effective January 1, 2005, for physicians, and January 1, 2006, for hospital outpatient departments, thereby reducing reimbursement rates paid to these providers of IVIG on behalf of Medicare beneficiaries.
(6) An Office of the Inspector General (OIG) April 2007 report, Intravenous Immune Globulin: Medicare Payment and Availability, found that Medicare reimbursement for IVIG was inadequate to cover the cost many providers must pay for the product. During the third quarter of 2006, 44 percent of IVIG sales to hospitals and 41 percent of sales to physicians by the three largest distributors occurred at prices above Medicare payment amounts.
(7) The ASPE report notes that after the new reimbursement rules for physicians were instituted in 2005, 42 percent of Medicare beneficiaries who had received their IVIG treatment in their physician’s office at the end of 2004 were shifted to the hospital outpatient setting by the beginning of 2006. This shift in site of care has resulted in lack of continuity of care and adverse impact on health outcomes and quality of life.
(8) The OIG also reported that 61 percent of responding physicians indicated that they had sent patients to hospitals for IVIG treatment, largely because of their inability to purchase IVIG at prices below the Medicare payment amounts. In addition, OIG found that some physicians had stopped providing IVIG to Medicare beneficiaries altogether.
(9) The OIG’s 2007 report concluded that whatever improvement some providers saw in the relationship of Medicare reimbursement for IVIG to prices paid during the first three quarters of 2006 would be eroded if manufacturers were to increase prices for IVIG in the future.
(10) The Centers for Medicare & Medicaid Services, in recognition of dislocations experienced by patients and providers in obtaining IVIG since the change to the ASP+6 reimbursement methodology, has provided during 2006 and 2007 a temporary additional payment for IVIG preadministration-related services to compensate physicians and hospital outpatient departments for the extra resources they have had to expend in locating and obtaining appropriate IVIG products and in scheduling patient infusions.
(11) The Medicare Modernization Act of 2003 (MMA) established an IVIG home infusion benefit for persons with primary immunodeficiency disease (PIDD), paying only for IVIG and specifically excluding coverage of items and services related to administration of the product.
(12) The ASPE report, Analysis of Supply, Distribution, Demand, and Access Issues Associated with Immune Globulin Intravenous (IGIV), found that Medicare’s IVIG home infusion benefit is not designed to reimburse for more than the cost of IVIG and does not cover the cost of infusion services (for example, nursing and clinical services and supplies) in the home. As a consequence, the report found that home infusion providers generally do not accept new PIDD patients with only Medicare coverage. These limitations in service are caused by health care providers--
(A) not being able to acquire IVIG at prices at or below the Medicare part B reimbursement level; and
(B) not being reimbursed for the infusion services provided by a nurse.
(13) Physicians administering IVIG to Medicare beneficiaries are reimbursed at the same low complexity level as the administration of antibiotics. However the administration of IVIG requires special preparation and handling, involves significant patient risk, and prolonged nursing time to monitor the patient during infusion.