There are two issues before Congress that require immediate grass roots support:

1. Dialysis Treatment Reimbursement - click here

2. ESRD-related Drug Reimbursement - read below

Sample letters that oppose these reimbursement cuts are provided here for you to send to your congressional representatives. These are word processing documents that you can edit, save, and print on your own computer.

WORD™ (doc) sample letter to US Senator
Rich text format (rtf) sample letter to US Senator

WORD™ (doc) sample letter to US Representative
Rich text format (rtf) sample letter to US Representative

Click here to access a list of addresses for U.S. Senators and Representatives arranged by state.

It's easy to send an e-mail. All the senators have e-mail addresses listed, so simply edit the above letter, copy it, and then paste the contents into an e-mail to each of your state's senators. The House of Representatives has an e-mail writing service that helps you locate your representative and delivers your message to him/her.

Read below for further information on this issue.

August 8

Issue - ESRD-related Drug Reimbursement Cuts

The Clinton Administration has already instituted new Medicaid drug pricing for ESRD related drugs and now wants to use the same significantly lower average wholesale prices (AWPs) for Medicare ESRD drug reimbursement.

Background

Frustrated because Congress in the past three years has refused to go along with the Clinton Administration’s wrong headed proposals to reduce Medicare’s drug reimbursements, the Administration has instead decided to take matters into their own hands. Based on a study conducted by State Medicaid fraud units and the Department of Justice, the Administration has come up with new average wholesale prices (AWPs) that are significantly lower than the current AWPs.

Medicare by law must pay 95% of the AWP for any given drug covered under Medicare. However, the law does not specify how AWPs are to be calculated . Traditionally, the drug companies have self reported these numbers to a company that publishes the Red Book and the fiscal intermediaries and carriers have used the Red Book AWPs to establish Medicare’s reimbursement. The Clinton Administration is challenging this system and instead has decided to develop their own AWPs based on wholesaler catalogue prices.

All of the ESRD related drugs reimbursed by Medicare are provided in the dialysis facility through intravenous administration which requires nurse supervision. These prescription drugs are all a part of the standard of care for ESRD patients and are primarily used to reduce their anemia, improve calcium levels to prevent bone loss and life threatening infections. These drugs measurably improve the lives of individuals with ESRD.

Rationale for Rejecting The Proposed AWPs

The Proposal Does Not Reflect the Costs Actually Paid by Dialysis Facilities - Based on data gathered from members of the National Renal Administrators Association and from the largest dialysis providers it is clear that some of the proposed AWPs would result in Medicare reimbursement that would be less than providers’ costs, especially for those who are unable to collect the 20% coinsurance.

The Proposal Ignores Certain Incurred Costs - The proposed AWPs also do not recognize the legitimate costs of administering the drugs. Additional costs would go unreimbursed would include the costs for procuring and storing, opportunity costs associated with inventorying expensive drugs, waste and spillage, bad debts, sales taxes and incidental supplies required to administer these drugs. None of the drugs in question were on the market when the Medicare composite rate paid to dialysis facilities was developed and therefore the composite rate does not provide adequate compensation for the administration of these drugs. Further, except for a 1.2% increase this year, the composite rate has essentially been frozen or reduced for over two decades.

The Proposal Could Result in Increased Costs to Medicare - Because many believe the proposed AWPs are arbitrary and do not reflect the cost of the drugs or the administration of the drugs, the ESRD community is very concerned that dialysis facilities may have to stop administering these vitally important drugs. Instead, there will be an incentive for dialysis facilities to send their patients to the hospital to have the intravenous drugs administered.

As a result, Medicare would wind up spending more not less on these drugs because hospitals receive administrative overhead reimbursement in their cost report settlements from Medicare which dialysis facilities do not receive.

Also, many clinicians believe that these drugs actually result in cost savings to Medicare. For example, Iron Dextran enhances the effectiveness of EPO in treating anemia.

The Proposal Could Adversely Affect Patient Care - This new policy will also create real hardships for ESRD patients who now spend a minimum of four and half hours in the dialysis facility three times a week for their dialysis treatments. Many ESRD Medicare beneficiaries already have transportation problems which will be exacerbated by having to go to a hospital for the intravenous drugs. Medicaid transportation costs would surely increase as ESRD patients would require transportation to the hospital as well as the dialysis facility. It is a strong concern that patients would be less compliant in getting these critically important drugs, which they now receive as part of their dialysis treatment, and as a result with have poorer outcomes.

Conclusion

In short, the proposed AWPs will result in Medicare spending more money, instead of less, and will likely wind up with poorer outcomes for ESRD Medicare beneficiaries, if these proposed drug pricing changes are instituted.

August 3

Did you know ...

Reimbursement for dialysis treatments from Medicare has been drastically eroding. According to the Health Care Financing Administration (HCFA), the average payment was $128 per treatment in 1983 and the average payment is now just $122 per treatment.

Adjusting for inflation, the reimbursement is now worth only $36, according to the Department of Treasury.

August 4

Did you also know ...

In response to shrinking Medicare reimbursement, dialysis facilities have been forced to cut staff-to-patient ratios, use more technicians and make other efficiency changes.

In addition, there is no annual inflation update formula for dialysis providers, as is the case for other Medicare providers.

Congress receives recommendations about the Medicare reimbursement rates for dialysis treatments from the Medicare Payment Advisory Commission (MedPAC). In its reports, even MedPAC has acknowledged that dialysis providers have exhausted cost-cutting possibilities and that no further productivity gains can be realistically expected.

Because of the declining reimbursement, MedPAC has recommended an additional 1.2% increase for 2001 and that the adequacy of Medicare reimbursement for dialysis facilities be reviewed annually. President Clinton has also proposed an additional 1.2% for dialysis providers for 2001.

However, none of this will happen unless Congressional leaders can be urged to act.

In the past, Congress failed to implement MedPAC's recommendations concerning dialysis reimbursement when it did not receive sufficient evidence of grass roots support for this increase in federal spending.