Do You Know What the 10 Most Expensive Medicare Part B Drugs Are?

Medicare spent approximately $19.5 billion on Part B drugs in 2010. Part B drugs are either administered by a doctor or under a doctor’s close supervision in a physician’s office or in a hospital outpatient setting.

Many of these drugs are quite expensive because they are either used by a substantial number of beneficiaries or because they have a high cost.

Part B drugs differ from Medicare Part D drugs because the latter are normally self-administered. Part D drugs cost Medicare, its beneficiaries and states $61.7 billion in 2010.

The most expensive Part B drugs make up the majority of total Part B drug spending. In 2010, the 55 most costly Part B drugs made up about 85 percent of all Medicare Part B drug spending, while the 10 most costly drugs accounted for nearly 45 percent of all Part B drug spending.

Twenty-three of the 55 highest-expenditure Part B drugs are used in cancer treatments.

According to the Government Accountability Office, the top 10 most expensive Part B drugs, ranked by the average annual cost per beneficiary, are:

10. Velcade
Treats: cancer
Cost: $19,667

9. Sandostatin Lar Depot
Treats: acromegaly, diarrhea and flushing caused by cancerous tumors and vasoactive intestinal peptide secreting adenomas
Cost: $22,748

8. Vidaza
Treats: myelodysplastic syndrome
Cost: $22,957

7. Herceptin
Treats: cancer
Cost: $25,797

6. Dacogen
Treats: myelodysplastic syndrome
Cost: $25,858

5. Erbitux
Treats: cancer
Cost: $25,898

4. Primacor, Primacor in Dextrose
Treats: acute decompensated heart failure
Cost: $62,790

3. Ventavis
Treats: pulmonary arterial hypertension
Cost: $84,205

2. Remodulin
Treats: pulmonary arterial hypertension
Cost: $130,772

1. Factor viii Recombinant (various)
Treats: hemophilia A
Cost: $216,833

Medicare Advantage Cuts

The insurance industry launched a second television ad Monday against proposed cuts to private Medicare Advantage plans.

The latest ad features seniors talking into the camera about the “drastic” consequences of losing access to their Medicare Advantage plans. 

“If Medicare Advantage has some cuts to it, I’m going to be in bad shape financially,” one man says in the new ad, which began airing in Washington, D.C. on Monday and will air in Louisiana on Tuesday.

It’s the second television ad America’s Health Insurance Plans (AHIP) has launched in a far-reaching lobbying campaign to block the proposed cuts. More than 100 members of Congress, representing both parties, have also written letters to the Medicare agency protesting the proposed cuts.

The agency recently proposed a 2.2 percent cut in payments to Medicare Advantage — Medicare plans administered by private insurance companies.

The 2 percent cut would come on top of reductions included in President Obama’s healthcare law. All told, according to AHIP, plans would have to find benefit cuts or premium increases worth $50 to $90 per customer if the cuts go through.

The Hill

Doctors Opt Out of Medicare

Medicare doctors opting outMedicare doctors opting out.

Much of the political talk on Medicare focuses on its rising costs. But, for some patients, there are growing concerns about how hard it is to find a doctor.

Once a month, these seniors get together at the public library in South Austin, Texas, to talk about what’s going on in their lives. This week, Medicare looms large.

WOMAN: I wonder, where would my friends and neighbors who are retired be if it weren’t for Medicare?

MAN: It’s a crisis, especially in the primary care area.

RAY SUAREZ: What they’re talking about is how it’s getting harder and harder to find Medicare doctors who will treat Medicare patients.

For one of the group’s members, 78-year-old Nancy Martin, the search was particularly tough. After moving here from Lubbock in 2007, she spent hours calling primary care doctors.

NANCY MARTIN, Texas: I said, I’m Nancy Martin. I have just recently moved to Austin. I am looking for a physician that will take a new Medicare patient. Sorry, we don’t take any new Medicare people.

I felt frustration, disappointment, I would say despair, a lot of days, just get to the point where I thought, I’m never going to find a doctor in Austin. What do you think I will have to do? I don’t know.

RAY SUAREZ: Martin has high blood pressure and type 2 diabetes.

NANCY MARTIN: If I had something bad, I just went to the emergency room.

RAY SUAREZ: After two years of searching, Martin finally found a primary care physician.

MAN: It’s nice to see you today.

MAN: Thank you.

RAY SUAREZ: There are differing estimates on how widespread the access problems are for Medicare recipients nationally. Only a handful of health organizations have even tried to study the issue. Texas has one of the few state medical associations that has.

LOU GOODMAN, Texas Medical Association: Patients are having a much harder time getting — finding Medicare doctors who will accept new patients.

This is Lou Goodman.

RAY SUAREZ: Lou Goodman is the CEO. With 47,000 members, it’s the largest state medical society in the U.S.

LOU GOODMAN: And in 2000, we had about almost 80 percent of the doctors were taking new Medicare patients. We just completed a survey last year, and we found that less than 60 percent were taking them. Almost 20 percent fewer doctors are taking new Medicare patients. And that really troubled us.

RAY SUAREZ: Goodman says the primary reason doctors are not taking new Medicare patients or opting out altogether is because of something called the sustainable growth rate.

It’s a mathematical formula established by Congress in 1997 to contain rising Medicare costs. But, in practice, it would have cut government payments to physicians for treating Medicare patients every year since 2001. So, every year, Congress at the last minute passes the so-called doc fix, averting the cuts and giving doctors a small raise.

The annual doc fix and the threats of lower reimbursements in the future have left some doctors insecure and unwilling to take on more Medicare patients.

Tricia Neuman tracks medical for the Kaiser Family Foundation.

TRICIA NEUMAN, Kaiser Family Foundation: Over the years, a number of problems have emerged with the formula. And it has resulted in a threatened reduction in payments for physicians each year. So, this year, for example, had Congress not taken action, physician fees would have been lowered by 30 percent approximately. And nobody really wants that to happen.

RAY SUAREZ: Congressional leaders have talked about passing a permanent payment fix. But each time they get close, they have been scared off by the estimated $138 billion dollar price tag. That’s left some physicians to make tough decisions.

MAN: Anybody sick at home?

RAY SUAREZ: Last year, the Austin Regional Clinic, or ARC, bit the bullet and stopped taking new Medicare patients.

ARC, one of the largest health care groups in Central Texas, serves more than 400,000 area residents. Dropping Medicare wasn’t something the health system wanted to do, but CEO Dr. Norman Chenven says it was an economic necessity.

DR. NORMAN CHENVEN, Austin Regional Clinic: The issue was really one about survival.

It’s really time and materials that it takes to provide care to someone. We can pretty much predict that if our Medicare population grows beyond a certain percentage that our profitability is going to go away.

RAY SUAREZ: The Texas Medical Association says this chart tells the story. Since 2001, Medicare payments to hospitals and nursing homes have steadily gone up. But those to physicians have remained flat.

Meanwhile, the cost of running a practice, according to the Texas Medical Association, has increased between 25 and 50 percent. But it isn’t just money that is driving the exits. Two hours west of Austin in the Texas hill country, Dr. Janet Chene says it was government rules and stepped-up audits for fraud that drove her to stay out of Medicare altogether.

DR. JANET CHENE, Family Physician: I didn’t see any way that I could stay in that program and give my patients the level of care that I want to give them.

RAY SUAREZ: Dr. Chene says Medicare criticized her for spending too much time with her patients.

DR. JANET CHENE: I’m a family doctor. I’m not a specialist that’s been just taking care of their toe or their eye. This is the oldest, sickest part of our population. And I felt I was being pushed to herd them through in a turnstile way in 15 minutes or less.

RAY SUAREZ: Medicare makes up nearly a quarter of the nation’s health care spending on physician services, according to the Centers for Medicare and Medicaid services.

Chene says even though she stopped taking those seniors, she doesn’t believe they have had trouble finding another doctor. And Kaiser’s Tricia Neuman says their research indicates it’s not a widespread problem.

TRICIA NEUMAN: We just did a survey last year. And, in fact, only three percent of seniors said they had trouble finding a doctor who would take Medicare. There could be certain situations where a senior may not be able to get their first choice in terms of physicians, but, in general, there are physicians available who would see them.

RAY SUAREZ: The independent Medicare Payment Advisory Commission also looked at the problem last June. Of the six percent of seniors they surveyed looking for a new primary care physician, one in four had a small or big problem getting an appointment. And Medicare itself says fewer than 10,000 doctors have officially opted out of the program in the past two years.

But Texas Medical Association’s Goodman thinks that’s just the tip of the iceberg.

LOU GOODMAN: I think we’re going to have a real shortage and a real problem. There is data — there are data on both sides of that argument. Our surveys show that we’re going to have a huge influx of seniors, but also not enough doctors to take care of them, no matter what.

I think what could happen is, our emergency rooms could get flooded. And, as we know, emergency rooms are the costliest place to get care.

RAY SUAREZ: Dr. Chenven says making a permanent doc fix isn’t all that needs to be done to keep physicians in the Medicare program. Doctors get paid by Medicare based on fee-for-service. Each service is paid for separately, giving incentive for physicians to provide more treatments, regardless of the outcome.

DR. NORMAN CHENVEN: That has to change for us, for this country to figure out a better way to deliver care.

RAY SUAREZ: Every day, about 10,000 Americans turn 65. And it’s estimated more than 25 million new Medicare recipients will be in the program by the year 2020.

The fight over the sequester could add even more complications. Physicians are bracing for a 2 percent cut in Medicare payments starting Apr. 1st.

Online, we look at another source of doctors’ frustration, a new system requiring specific codes for everything from flaming water ski burns to dolphin bites. That’s on our Health page.


Medicare Part D – Trouble Brewing

Medicare Part D is on the chopping block.

The much-discussed sequester has taken effect. But federal lawmakers are still trying to find ways to undo the $85 billion in spending cuts it has put in motion.

Medicare Part DIn his state -of-the-union address, President Obama trained his eyes on one of his favorite bogeymen — the pharmaceutical industry. The president has proposed a multibillion-dollar fee on drug companies by requiring them to issue the federal treasury rebates on prescription drugs consumed by low-income seniors.

Other Democrats want to go even further. They’re calling for the feds to essentially dictate prices for drugs sold through Medicare Part D plans. They claim that such a move will save even more money.

But neither plan will deliver the savings its backers claim. Even worse, both will raise costs for seniors, deny them access to drugs they need, and dismantle the structure of the only portion of Medicare that has cost less than government projections — the Medicare Part D drug benefit.

Medicare Part D leverages the power of market competition to deliver prescription drug coverage to seniors. Private insurance plans compete with one another for seniors’ business, offering different premiums, deductibles, and levels of drug coverage. Seniors can pick the plan that best suits their needs and budget, and the feds subsidize their premiums.

Today, the more than 27 million seniors enrolled in Part D can choose from about a thousand plans nationwide. Nearly 11 million people covered by Part D did not previously have prescription drug coverage. Ninety percent are satisfied with the program, according to KRC Research.

The competitive forces built into Medicare Part D have kept costs down. At an average of just $38 a month, premiums are 27 percent below where the government expected them to be. They’ve been essentially flat since 2009, according to the Kaiser Family Foundation.

Low premium costs, in turn, mean less taxpayer money for subsidies. In fact, Part D costs are 40 percent below where the Congressional Budget Office (CBO) initially predicted. Over the past six years, the CBO has lowered its long-term cost projections for Part D by hundreds of billions of dollars.

Try to name one other federal program that can boast such results. Certainly not the rest of Medicare. At the dawn of the program in 1965, Medicare’s Part A hospital insurance program was projected to cost just $9 billion by 1990. The actual cost was more than seven times that — $67 billion.

Despite Medicar Part D’s success at increasing prescription drug coverage at lower-than-expected cost, President Obama and his allies want to fundamentally change the nature of the program.

Obama’s plan would force drug companies to rebate some of the money they make on drug sales to “dual eligibles” — low-income seniors who qualify for both Medicare and Medicaid. They currently receive drug coverage through Part D.

The federal government mandates that drug makers generally give Medicaid a 23-percent discount. By requiring a similar rebate for dual eligibles, proponents claim that the government would save more than $150 billion over 10 years.

But as former Congressional Budget Office Director Douglas Holtz-Eakin has said, “That money has to come from somewhere.” And that somewhere will be other seniors’ pockets.

Holtz-Eakin estimates that the rebate scheme will force Part D premiums up by as much as 40 percent. That would add up to $3.7 billion to seniors’ out-of-pocket costs, as drug companies try to recoup the cost of those forced rebates.

As bad as Obama’s plan is, a coalition of Democratic lawmakers and various activist groups want to go even further — and have the government take over the role of negotiating drug prices from the private insurance companies.

In effect, they want the government to impose price controls on prescription drugs. They argue that Washington bureaucrats could force drug prices down even further, as occurs in the drug benefit for military veterans run by the federal Veterans Administration (VA).

But if the VA is such a great model, why are so many veterans fleeing it? Thirty-eight percent of veterans paid to join Part D in 2010, according to the Department of Veterans Affairs, up from 34 percent in 2006. That’s because the competitive principles that govern Part D have resulted in a marketplace with a wide array of plans that provide access to more drugs than the centralized VA bureaucracy does.

Meanwhile, the CBO has repeatedly said that the government will not be able to deliver the savings it promises, writing most recently, in 2009, “[we] still believe that granting the Secretary of HHS additional authority to negotiate for lower drug prices would have little, if any, effect on prices.”

Medicare Part D has succeeded at expanding coverage at low cost precisely because it’s operated without too much government meddling. In the end, this fight is less about saving Medicare money than it is about giving the federal government yet more control over our healthcare system.

Seniors should hope that the president and his allies don’t succeed in their quest to upend Part D.