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 Waste on Infusion Drugs

medicare infusion drugsTaxpayers are losing money because of Medicare waste on infusion drugs.

Because Congress locked some drug costs at 2003 prices, Medicare has wasted $334 million dollars over the last six years by failing to buy medication at the best possible discount, according to a new investigation that reinforces just how prevalent waste and abuse are inside the government’s main health program for senior citizens.

Investigators at the Health and Human Services Department Office of Inspector General said that Medicare waste on Plan B by purchasing drugs at an outdated average wholesale price, or AWP,  as opposed to the manufacturing price the government is supposed to receive.

“Our findings—like those of OIG’s previous studies in this area—demonstrate that AWPs are unrelated to the prices of drugs in the marketplace and that the reliance on an AWP-based payment methodology has led to Medicare waste that cost the program hundreds of millions of dollars,” the inspector general said.

The culprit is infusion drugs in durable medical equipment – basically drugs meant to be used in home medical equipment like IV’s, catheters or infusion pumps.  But the drugs haven’t been purchased at the optimal sales price, investigators said.  Instead, Medicare officials have been following 2003 pricing guidelines set by Congress.

“Basing payments for DME infusion drugs on AWPs set almost a decade ago raises concerns about whether Medicare payment levels are appropriate,” the IG said.

For creating a scenario that kept taxpayers from getting the best prices — and failing to fix it for years — the Centers for Medicare and Medicaid Services, or CMS, and Congress jointly win this week’s Golden Hammer, a distinction awarded by the Washington Guardian to an egregious example of waste, fraud and abuse in government.

Through an update to the Social Security Act, lawmakers said that “in the case of infusion drugs furnished through an item of durable medical equipment,” prices “on or after January 1, 2004,” will be set at “95 percent of the average wholesale price for such drug in effect on October 1, 2003,” the law reads.

The inspector general said CMS needs to petition for a change in the law that would set prices to current levels, or to include infusion drugs in an already successful competitive bidding process.  Marilyn Tavenner, CMS acting administrator, agreed and said the agency is looking at both options.

Medicare has come under fire before for the exact same issue.  In fact, in January the Washington Guardian reported on Medicare’s overpayments with prescription medication.

For the six years covered by the latest review, investigators estimated the government had been paying between 54 percent and 122 percent more for the drugs than was necessary.  By using the wholesale price, investigators said CMS failed to get “any price concessions, such as volume discounts, ‘prompt pay’ discounts, cash discounts, free goods contingent on purchase requirements, chargebacks and rebates other than those obtained through the Medicaid drug rebate program.”

The IG also said that because medicine was being purchased at 2003 prices, the government might have been getting some drugs cheaper than current costs.  But investigators said it was a small amount, and is already calculated in the $334 million estimation.

And investigators were able to identify the largest single Medicare waste problem: a drug called milrinone lactate, which is used to treat heart failure.  Medicare Plan B was paying a price for the drugs more than 18 times greater than the actual cost, the inspector general said.

Of the $125 million Medicare spent in 2011 for 21 different infusion drugs, that particular drug accounted for 62 percent of the costs, according to the IG’s report.

Washington Guardian