Hemophilia A

THE PRESCRIPTION DRUG and Medicare Improvement Act of 2003 has one major flaw--reimbursements on medical supplies and home health care. The problem is that legislators are embracing a new reimbursement model without fully understanding its impact on the hemophilia community. With the new higher cost of care items, patients will not have access to critical home care services, which will delay necessary treatment.

In terms of treatment, hemophilia is the fifth most costly chronic disease. At present, the in-home health care industry saves hospitals thousands of dollars per patient per year Medicare Act reimbursement cuts, however, will drive individuals with hemophilia into hospitals and emergency rooms at a much greater cost to the system. With lifesaving home care services out of roach, interminable treatment delays will drive up the frequency of crippling episodes and fatalities as well as heap additional expenses on the Medicare system. If this sounds overly dramatic, talk to the thousands of individuals throughout the U.S. who have hemophilia for whom this legislation could be a matter of life and death.

According to Jonathan Goldsmith, president of the Immune Deficiency Foundation and former director of several hemophilia treatment centers: "People with hemophilia need access to their life-saving factor in a timely fashion, and if they don't receive prompt treatment at the first sign of bleeding--which is often in a home setting--then they will have problems that include progressive joint damage and bleeding into vital areas that could have very serious health consequences."

"We have been fighting a reimbursement nightmare for the past three years," relates Jan Hamilton, executive director of the Hemophilia Federation of America. "If people with hemophilia can't continue to get their product at home, and they have to go back to the emergency room or the doctor's office or the hospital to get it, we've just lost 20 years of progress."

At issue is a significant restructuring of the core reimbursement methodology used by Medicare for the biological blood dotting "factor" patients require to prevent or stein bleeding episodes. The Medicare Act outlines a shift from the current reimbursement rate of 95% of the Average Wholesale Price (AWP) per unit to a calculation based on Average Sales Price (ASP) plus a nominal administration tee. By all accounts, this represents a dramatic reduction in the amount of reimbursement that provides for blood clotting factor and a few ancillary supplies. Moreover, it leaves little else to cover a host of services that hemophilia patients rely on to allow for immediate treatment of bleeds in the home.

While this might appear to be sound fiscal belt-tightening, advocates argue that legislators are embracing this new reimbursement model without fully understanding its impact. For instance, the new structure is based heavily on the recommendations of a report from the General Accounting Office, yet the GAO has acknowledged that it had insufficient data to provide an estimate of the costs of the administrative services provided by home care companies dispensing factor. This is a major flaw that could leave key home care services uncovered and, therefore, unavailable to patients with hemophilia.

"If a patient is not able to infuse quickly and treatment is delayed, there can be any number of serious or life threatening consequences," warns Hamilton. "If the bleed is in a knee, elbow, or any joint, the individual could possibly develop crippling in that joint because of the delay in treatment. If it's a head bleed, the final destination could be the morgue."

There are an estimated 25,000 people living with hemophilia in the U.S. The malady occurs when an essential protein is missing that prevents blood from clotting properly. To manage the disorder, blood clotting factor is infused (injected) to replace the missing protein. In severe cases, infusion is required several times a week, and more frequently if a bleeding episode occurs.

An adult with severe hemophilia typically will experience eight to 10 bleeds per month and self-administer 1,500 to 4,000 units of clotting factor per infusion. Annually, clotting factor costs usually are between $150,000 and $225,000 for an adult with severe hemophilia.

On Jan. 1, 2005, the reimbursement for such drugs will move to a more complex "market-based payment system" that will do away with the concept of AWR This change represents a major reduction in reimbursement per unit of factor, sufficient to cover the cost of the factor itself and a few ancillary items, but little else. Furthermore, the Medicare Act directs the Secretary of Health and Human Services to determine such payment "for items and services related to the furnishing of [factor] in an amount that the Secretary determines to be appropriate." This fee may "take into account any or all of the following: (i) the mixing (if appropriate) and delivery of factor to an individual, including special inventory management and storage requirements. (ii) Ancillary supplies and patient training necessary for the self-administration of such factors."

"Essentially, what it means is that some of the costs for services incurred by home care companies that used to be reimbursed through the cost of the product are not going to be reimbursed through the cost of the product anymore," contends Lynn Shapiro Snyder, of the Washington, D.C.-based law firm of Epstein, Becker and Green.

Adding to the frustration is the general ambiguity of the "administration fees," an issue that troubles Donna Ligda, a clinical nurse specialist and employee of Curative Pharmacy Services, the country's third-largest hemophilia specialty pharmacy provider of blood clotting factor. "From every indication, there is no way that the administrative fees they are proposing are going to come close to covering the level of services that has been received by individuals with hemophilia in the past," she insists.

Members of the hemophilia community particularly are concerned that the Centers of Medicare and Medicaid Services (CMS) may be relying too heavily on specific conclusions drawn by the GAO report entitled, "Payment for Blood Clotting Factor Exceeds Providers' Acquisition Cost." The Medicare Act specifically suggests that the HHS Secretary review the GAO's report to derive the amount of the administration fee. Yet, the GAO acknowledges in the report that their conclusions were drawn with information provided by Hemophilia Treatment Centers (HTCs), but did not estimate the costs incurred by homecare companies associated with the furnishing of clotting factor and preventive treatment services.

Homecare companies argue that, minus this key data, accurately estimating administration fees is impossible. The GAO report wrongly assumes that the administrative costs that apply to HTCs also are appropriate for homecare pharmacy companies. "It is inappropriate to establish this fee based only on the cost structures of hemophilia treatment centers," reads a statement from the National Hemophilia Foundation. "Most clotting factor for self-infusion is dispensed by hemophilia treatment centers and home care providers."

"The government is trying to determine an administrative fee that would be added to the cost of the product," explains Snyder. "They need to make sure that the level of service and quality that has historically been available under the current payment methodology from various specialty pharmacies can continue so that there is no disruption of services."

Congress and HTC

Congress created the national HTC network in 1974 to ensure access to comprehensive and specialized care for persons with bleeding disorders. HTCs are Federally funded facilities that offer broad professional treatment services.

A home care company, also known as a specialty pharmacy, fills a specialized niche in the hemophilia community by offering home delivery of factor, as well as services that complement those of HTCs. They include access to clinicians that are specially trained to provide education about hemophilia and factor; monitoring of patient compliance with drug manufacturers' guidelines; specialized delivery services such as refrigerated overnight mail, courier, or hand delivery; and patient support and community advocacy.

Some home care pharmacies have adopted a "personal care" treatment service model to help improve a patient's lifestyle for--instance, attendance at school and in the workforce. The model includes community service representatives who assist hemophilia sufferers with home delivery of factor: additional patient care items to ensure treatment outcomes through training and information support; constant follow-up care; and assistance with processing the reimbursement claims with insurance providers.

There is quantifiable evidence that the support and assistance of HTCs and home care companies improve patient outcomes and lower system costs. Studies by the Centers for Disease Control have found hospitalization and morbidity are reduced by 40% for individuals with hemophilia who receive proactive care.

Providing the reimbursement to allow for home care services and keeping patients out of hospitals negates a host of future costs to Medicare. By eliminating the delay between injury and treatment, much less factor is required to treat a bleed. Furthermore, the cost for factor alone might be several thousand dollars more per unit in a hospital emergency room. Add to that total the emergency room bill and further costs from delayed treatment and subsequent complications, such as surgery, rehabilitation, and physical therapy--all of which typically are covered by Medicare, Medicaid, or other insurance.

"The more you delay, the more product it takes, and the more expensive it gets," Hamilton points outs. "A bleed that might have started out costing two to three thousand dollars could wind up costing $12,000 instead."

The reduction in Medicare reimbursement could result in home care suppliers reducing or eliminating many of these key services. Snyder stresses that it is imperative for consumers and providers to educate regulators continually on the difference between the provision of factor and what it does for quality of life. "The initiative right now for the hemophilia community is to help the government to come up with the appropriate dollar amounts through the administrative Ice that adequately reimburses specialty pharmacies that offer a whole range of services."

Adds Ligda: "Specialty pharmacies are simply looking for a Medicare payment structure for hemophilia blood clotting factor that accounts for, and adequately reimburses for, the critical services ancillary to the furnishing of factor product.'"

For this reason, Curative Pharmacy Services is appealing directly to the CMS for a separate payment from the administrative fee proposed in the Medicare bill for blood clotting factor that is adequate to cover the critical costs provided by specialty pharmacies to Medicare beneficiaries. "We believe that HHS's development of the separate payment for the administrative costs associated with furnishing hemophilia blood clotting factor will be critical to assuring continued quality and access to care," Ligda stresses.

If dealing with the Medicare Act was not enough cause for concern for those with hemophilia, state run Medicaid programs already are jumping on the bandwagon. California and Indiana legislators are enacting a similar change in methodology based on ASR The potential domino effect of this methodology change at the national--and state--level could mean devastation to a community of patients who have endured enough suffering.

"If legislatures do the right thing, up front. they are going to eliminate more expensive treatment at the hospital level. They are going to have healthier patients that are going to be productive, tax-paying citizens who can hold a job or go to school and not be on government assistance programs.

"My advice to the government is don't be penny wise and pound foolish," Hamilton concludes. "If you try to cut down what you reimburse for key services, you are going to wind up paying more in the long run."

Jeff Elliott is a freelance writer who specializes in health issues.

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