Proponents praise radiopharmaceutical reimbursement overhaul, with caveats

July 30, 2008

Bexxar and Zevalin have become the poster children of inadequate reimbursement for radiopharmaceuticals. Despite recent Congressional action to freeze their payment rates until January 2010, advocates for these radioimmunotherapic agents say more should be done to support the application of these clinically valuable but extremely expensive drugs.

Bexxar and Zevalin have become the poster children of inadequate reimbursement for radiopharmaceuticals. Despite recent Congressional action to freeze their payment rates until January 2010, advocates for these radioimmunotherapic agents say more should be done to support the application of these clinically valuable but extremely expensive drugs.

The SNM and industry representatives lauded Congress for the June 15 passage of the Medicare Improvements for Patients and Providers Act of 2008. The new law repealed a 10.6% cut in Medicare fees to physicians and included an 18-month extension of the 2007 reimbursement rates for radiopharmaceuticals used in the treatment of cancer and other types of life-threatening diseases. It also sent a powerful message about the need to ensure quality care to critically ill patients, said SNM President Robert W. Atcher, Ph.D.

"Thousands of patients will benefit and live longer if the government and private payers adequately reimburse highly effective radioimmunotherapies," Atcher said.

Bexxar and Zevalin were approved by the FDA to treat patients with relapsed or refractory non-Hodgkins lymphoma whose disease no longer responds to chemo- or radiotherapy. Mounting evidence suggests Bexxar or Zevalin treatment can lead to longer remissions if given before conventional therapy. The Centers for Medicare and Medicaid Services set reimbursement rates for Bexxar and Zevalin at $10,554.47 and $15,159.66, respectively. The drugs actually cost more than $20,000 per dose, however, and treatment requires one or more doses.

"They are underreimbursed," said Dr. Kenneth McKusick, SNM representative to CPT and chair of the Nuclear Medicine APC task force. "As hospitals realize that they are not getting paid commensurate to what they are paying for these products, they will not be accepting this type of therapy to be done in their hospital outpatient departments."

In June, SNM officials criticized CMS for underestimating the cost of at least 15 radiopharmaceutical agents in addition to Bexxar and Zevalin. Under Medicare's current Hospital Outpatient Prospective Payment System, CMS does not use external data sources to identify and reimburse radiopharmaceuticals. Both agents are used in diagnostic imaging procedures that are necessary to determine the right therapeutic doses, but the cost of the diagnostic procedure is bundled into the therapeutic reimbursement codes, McKusick said. The problem compounds when private insurers, keeping an eye on CMS rates, refuse to pay more for these procedures.

"This problem restricts the availability of the product to the physicians who want to treat patients with this type of therapy," McKusick said.

The SNM considers this a generic problem and not restricted to Bexxar and Zevalin. CMS and healthcare providers need a better system in which manufacturers and distributors provide accurate cost information, which they do not currently do. The therapeutic side is just the bellwether, McCusick said. Many drugs used for imaging and therapeutic studies in dementias, adrenal tumors, and other conditions are also underpaid.

"This is going to be an ongoing issue," McCusick said. "We are working with all of the different organizations to try to come up with a system that CMS can utilize to obtain cost information on an ongoing basis. A system that does not penalize hospitals and force many of them to deny a particular procedure as it is occurring now with this therapy."

For more information from the Diagnostic Imaging archives:

Proponents hail passage of Medicare bill as triumph for physicians, patients

Society protests Medicare reimbursement policies

Medicare payment changes take bite out of IR and molecular imaging

Medicare bundling proposal raises concern