NCPA - National Center for Policy Analysis


July 21, 2005

Many physicians are dropping Medicare patients with immunity problems because of a change in Medicare reimbursement, mandated by the 2003 Medicare overhaul, says the New York Times. Prices for intravenous immunoglobulin, a product derived from donated blood plasma, have risen sharply and now, with lower reimbursement rates, doctors feel they can no longer afford to treat these patients.

The change in Medicare reimbursement for immunoglobulin is intended to prevent overuse of the drug, which can cost $20,000 to $80,000 per year per patient, says the Times. Until this year, Medicare reimbursed doctors based on the average wholesale price. However, doctors usually bought the drug for much less, then making a profit when Medicare reimbursed them.

But now, patients all over the country are not getting treatment, says Michelle B. Vogel of the Immune Deficiency Foundation. Consider:

  • About 50,000 Americans have immune deficiency, some 7,000 of them Medicare patients, many younger than 65 because they are on disability.
  • Medicare spent $300 million on immunoglobulin in 2004, its 10th biggest drug expenditure -- up from $180 million the year before, even though the reimbursement rate had gone down.
  • Medicare's new reimbursement rate is about $42 a gram for the powdered product and $56 a gram for the liquid, down from $66 last year for either type and $78 in October 2003; a typical monthly infusion is 30 to 50 grams.

The Times says some hospitals are reporting shortages as doctors shift patients from their offices to hospitals, which are still reimbursed under the old formula at about $80 gram.

Absent an unlikely declaration of a public health emergency, Medicare is prohibited from reverting to the old cost formula. Since private insurers often take cues from Medicare, patients with private insurance may also have trouble getting treatment.

Source: Andrew Pollack, "Law Impedes Flow of Immunity in a Vial," New York Times, July 19, 2005.

For text (subscription required):


Browse more articles on Health Issues