Medicare and Medicaid Reform Update How will you be affected?

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Medicare and Medicaid Reform Update How will
you be affected?

• Patrick Collins
• Sr. Mgr. Public Affairs

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Medicare and Hemophilia

• Eligibility based on age (65) or disability
• Blood clotting factor is under Medicare Part B
• Reimbursement based on Average Sales Price Plus
  6
• Additional furnishing fee provided specific
  solely to blood clotting factors
• 2005 - 0.14 per iu
• 2006 - 0.146 per iu
• Medicare payment based on 80/20 split
• 80 of costs picked up by Medicare
• 20 is the patient responsibility

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MEDICARE REIMBURSEMENT FACTOR VIII
Product 2006 Q2 Rate 2006 Q1 Rate
Factor VIII per i.u. (J 7190) 0.681 0.659
Factor VIII, recombinant, per i.u. (J 7192) 1.058 1.064

• Reimbursement is at volume weighted ASP plus 6
  based on manufacturer submitted ASPs for 2
  quarters previous. For example, Q1 2006 rates
  are based on volume weighted ASPs from Q3 2005.
  For blood clotting factors, this payment rate
  also incorporates an additional add-on fee.
• In 2006, an additional 0.146 per unit add-on
  rate for administration of clotting factor will
  be implemented for homecare and hemophilia
  treatment center administration. This will be
  adjusted in future years by linking any increases
  to the Consumer Price Index.

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MEDICARE REIMBURSEMENT VWD FACTOR
Product 2006 Q2 Rates 2006 Q1 Rates
Von Willebrand Factor, per i.u. (J7188) 0.877 0.871

• Reimbursement is at volume weighted ASP plus 6
  based on manufacturer submitted ASPs for 2
  quarters previous. For example, Q1 2006 rates
  are based on volume weighted ASPs from Q3 2005.
  For blood clotting factors, this payment rate
  also incorporates an additional add-on fee.
• In 2006, an additional 0.146 per unit add-on
  rate for administration of clotting factor will
  be implemented for homecare and hemophilia
  treatment center administration. This will be
  adjusted in future years by linking any increases
  to the Consumer Price Index.

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MEDICARE REIMBURSEMENT FACTOR IX
Product 2006 Q2 rates 2006 Q1 rates
Factor IX non-recombinant (J 7193) 0.889 0.892
Factor IX, complex, (J 7194) 0.639 0.675
Factor IX, recombinant,(J 7195) 0.985 0.986

• Reimbursement is at volume weighted ASP plus 6
  based on manufacturer submitted ASPs for 2
  quarters previous. For example, Q1 2006 rates
  are based on volume weighted ASPs from Q3 2005.
  For blood clotting factors, this payment rate
  also incorporates an additional add-on fee.
• In 2006, an additional 0.146 per unit add-on
  rate for administration of clotting factor will
  be implemented for homecare and hemophilia
  treatment center administration. This will be
  adjusted in future years by linking any increases
  to the Consumer Price Index.

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Medicare Co-Payment

• Person with hemophilia responsible for 20 of
  total costs of therapy
• Many individuals have supplemental insurance to
  pick up 20 individual responsibility
• In cases where 20 could not be paid, providers
  could in many cases write off as bad debt from
  uncollected copayment
• New reimbursement model makes writing off such
  debt much more difficult.
• Individual without supplemental insurance now may
  have some difficulty

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Medicare Co-Payment

• 20 individual responsibility for blood clotting
  factor is financially onerous
• Collaboration of HFA, NHF, COTT with ZLB Behring
  on alternatives to address this situation
• Potential solution
• Cannot cost the federal government money
• Must be accessible and have individual
  responsibility
• Agreed upon solution
• MediGap

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Medicare Co-Payment

• Proposing MediGap coverage for those on Medicare
  due to disability
• Only those 65 and over have mandatory access to
  MediGap
• Medicare disabled do not have mandatory coverage
• 24 states offer MediGap to those on Medicare due
  to disability
• Solution is to have equal MediGap coverage for
  Medicare beneficiaries

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Medicare Co-Payment

• Seeking federal legislation to equal MediGap
  eligibility requirements between those 65 and
  over and those who are disabled
• This prevents a state by state appeal
• Supplemental insurance for the disabled is needed
  for Medicare beneficiaries with hemophilia
• Individual still has cost share responsibilities
  (deductibles, premiums, etc.) but far less than
  20 of cost of therapy.
• MediGap range - 250 - 500 per month
• 20 out of pocket - 1667 per month (if 100K
  annually)

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Proposed MediGap Statutory Language

•  
• The bold, underlined text represents the
  proposed revision to Social Security Act
  1882(s)(2)(A)
•  
• The issuer of a medicare supplemental policy may
  not deny or condition the issuance or
  effectiveness of a medicare supplemental policy,
  or discriminate in the pricing of the policy,
  because of health status, claims experience,
  receipt of health care, or medical condition in
  the case of an individual for whom an application
  is submitted prior to or during the 6 month
  period beginning with the first month as of the
  first day on which the individual is (i) 65
  years of age or older or (ii) determined to be
  disabled (as defined in section 223(d)(1) of the
  Social Security Act) and (iii) enrolled for
  benefits under part B.
• -OR-
• (a) ASSURING AVAILABILITY OF MEDIGAPCOVERAGE-
• (1) IN GENERAL- Section 1882(s) (42 U.S.C.
  1395ss(s)) is amended--
• (A) in paragraph (2)(A), by striking is 65 years
  of age or older and is' and inserting is first'
• (B) in paragraph (2)(D), by striking who is 65
  years of age or older as of the date of issuance
  and' and
• (C) paragraph (3)(B)(vi), by striking at age
  65'.
• (2) EFFECTIVE DATE- The amendments made by
  paragraph (1) apply terminations of coverage
  effected on or after the date of the enactment of
  this Act, regardless of when the individuals
  become eligible for benefits under part A or part
  B of title XVIII of the Social Security Act.

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Federal Impact on Medicaid

• Greater Reliance on Average Manufacturers Price
• Budget Deficit Reduction Act of 2005
• Requires that CMS provide AMP data to states
  beginning July 1, 2006
• Provide on a monthly basis
• Will states use to set reimbursement rates?
• Rates less than AWP, which many states still use
• Will states provide appropriate plus to AMP
• Retained federal match and federal upper limit
  for Medicaid prescription drugs at reasonable
  rate

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State Medicaid

• State government insurance program to insure the
  poor
• States set the rules and regulations
• Percent above the poverty level to be eligible
• How much to reimburse
• What therapies to cover
• Federal and state dollars are used to fund
  Medicaid
• Amount of federal match depends on the poverty
  level of a particular state.
• Blood clotting factors are covered under state
  Medicaid programs

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Nationwide Trends in State Medicaid

• Restricting Access
• Sole Source Programs
• Arizona, Utah and Mississippi Medicaid
  beneficiaries can obtain BCF only through HTC
• Minnesota program defeated
• Florida expanded to 2 providers
• Preferred Drug Lists/Prior Authorization
• Iowa has program in place, most BCF on list
• Pennsylvania program defeated, PT recommended
  either all BCF products or no products
• Supplemental Rebates
• Payment of rebates in order for therapy to be
  given first preference for Medicaid consideration

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Nationwide Trends in State Medicaid

• Reducing Expenditures
• Shifting of all Medicaid beneficiaries into
  Managed Care
• Florida? pilot program being launched in 2
  counties for all Medicaid patients
• Reduction of reimbursement rates
• Maryland ASP plus 8
• California ASP plus 20
• Soliciting of state contracts
• New York, South Carolina, West Virginia
• Imposing ceilings on what will be reimbursed
• Many states have implemented Maximum Allowable
  Cost
• Dropping coverage altogether
• Tennessee

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Closing Remarks

• Reimbursement is under attack on the state level
• Medicaids looking to restrict access, cut costs,
  and supply clotting factor on the cheap
• Medicare access is actually pretty good
  furnishing fee has maintained access to therapy
• Medicare 20 copayment needs to be addressed
• ZLB Behring and the plasma industry
  (PPTA)committed to fighting for patient access to
  all blood clotting factors
• Open access to all products
• Open access to all vendors and sites of service