NCPA - National Center for Policy Analysis

Medicare Rule Endangers Access to Hospital-Administered Drugs

June 10, 2003

As Congress begins debating expanded Medicare drug coverage, organ transplant patients nationwide are at risk of losing access to therapies already covered by Medicare, warns Dr. Pedro Vergne-Marini, director of the transplantation and renal disease division at Methodist Medical Center in Dallas.

A new regulation implemented by the U.S. Centers for Medicare and Medicaid Services (CMS) earlier this year reduced Medicare reimbursement for certain innovative and potentially lifesaving medications administered in the hospital outpatient setting.

Medicare reimbursement for transplant drugs is well below what the hospital pays for them:

  • At the Methodist Medical Center of Dallas, about 75 percent of kidney/pancreas transplant patients are Medicare beneficiaries.
  • New therapies play a big role in the 90 percent survival rate of renal transplants, but transplants cost approximately $80,000 per patient.
  • If physicians utilize less innovative therapies for kidney treatment, 20 out of 100 patients could lose their transplants, be forced back onto dialysis or even risk death.
  • Fifty-four medicines are affected by the CMS regulation, including 14 for cancer and the treatment of chemotherapy side effects, four for cardiovascular disease and emergencies and four that help prevent organ rejection.

Because Medicare is the nation's largest health insurance program, federal coverage and reimbursement decisions have an impact on research and development.

Source: Pedro Vergne-Marini, "Medicare regulation threatens organ transplants," Dallas Morning News, June 10, 2003.


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