U.S. GOVERNMENT PRINTING OFFICE

64–029CC WASHINGTON : 2000

PATIENT ACCESS TO SELF-INJECTABLE PRESCRIPTION DRUGS IN THE MEDICARE PROGRAM

HEARING

BEFORE THE

SUBCOMMITTEE ON

HEALTH AND ENVIRONMENT

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

MARCH 23, 2000

Serial No. 106–122

Printed for the use of the Committee on Commerce

(

COMMITTEE ON COMMERCE

TOM BLILEY, Virginia, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

MICHAEL G. OXLEY, Ohio

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

Vice Chairman

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

RON KLINK, Pennsylvania

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

JAMES E. DERDERIAN, Chief of Staff

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON HEALTH AND ENVIRONMENT

MICHAEL BILIRAKIS, Florida, Chairman

FRED UPTON, Michigan

CLIFF STEARNS, Florida

JAMES C. GREENWOOD, Pennsylvania

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

Vice Chairman

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

ED BRYANT, Tennessee

TOM BLILEY, Virginia,

(Ex Officio)

SHERROD BROWN, Ohio

HENRY A. WAXMAN, California

FRANK PALLONE, Jr., New Jersey

PETER DEUTSCH, Florida

BART STUPAK, Michigan

GENE GREEN, Texas

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

LOIS CAPPS, California

RALPH M. HALL, Texas

EDOLPHUS TOWNS, New York

ANNA G. ESHOO, California

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

3

C O N T E N T S

Page

Testimony of:

Davenport-Ennis, Nancy, founding Executive Director, Patient Advocate

Foundation ..................................................................................................... 53

Hash, Michael, Deputy Administrator, Health Care Financing Administration ............................................................................................................ 8

Lohrman, Rosalie .............................................................................................. 51

Rybicki, Mariellen ............................................................................................ 49

Sizemore, Julie .................................................................................................. 46

Steinberg, Earl P. ............................................................................................. 42

Story, Jane A. ................................................................................................... 38

Material submitted for the record by:

Hash, Michael, Deputy Administrator, Health Care Financing Administration, responses for the record .................................................................. 69

(III)

(1)

PATIENT ACCESS TO SELF-INJECTABLE PRESCRIPTION DRUGS IN THE MEDICARE PROGRAM

THURSDAY, MARCH 23, 2000

HOUSE OF REPRESENTATIVES,

COMMITTEE ON COMMERCE,

SUBCOMMITTEE ON HEALTH AND ENVIRONMENT,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:05 a.m., in room

2322, Rayburn House Office Building, Hon. Michael Bilirakis

(chairman) presiding.

Members present: Representatives Bilirakis, Upton, Burr,

Bilbray, Lazio, Norwood, Pickering, Bryant, Brown, Deutsch,

Strickland, Barrett, and Capps.

Staff present: Tom Giles, majority counsel; Robert Simison, legislative clerk, Bridgett Taylor, professional staff; and Amy Droskoski,

professional staff.

Mr. BILIRAKIS. Good morning.

The hearing will now come to order.

Today, as you know, the subcommittee is holding a hearing to review the Health Care Financing Administration’s policy of coverage, or lack thereof, of self-administrable drugs under the Medicare program.

Since Medicare was created, the program has covered physician

services and supplies, and I quote, ‘‘including drugs and biologicals

which cannot, in accordance with the regulations, be self-administered.’’

The manual for carriers states that the determination of whether

a drug or biological can be self-administered is based on the usual

underlying method of administration. This policy has resulted in

payment by Medicare for lifesaving drugs needed by patients who

are incapable of self-injecting their medications.

On August 13, 1997, however, HCFA issued a program memoranda which significantly narrowed coverage for injectable drugs.

In response, carriers began basing their coverage decisions on

whether the drug could possibly, be self-administered, without regard to the unique needs of each patient. This action resulted in

a loss of coverage for patients whose medications were previously

covered by Medicare.

Beneficiaries in my home State of Florida were particularly hard

hit by this payment change. After the new policy took effect, Blue

Cross and Blue Shield of Florida attempted to deny coverage for

Neupogen based on the fact that it could be self-administered, even

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though it is usually administered by a physician, in conjunction

with chemotherapy.

Congress became increasingly concerned as more and more

claims were denied as a result of HCFA’s actions. In response, Section 219 of the Consolidated Appropriations Act was enacted into

law last year to prohibit the Agency from carrying out the program

memorandum or from restricting coverage of self-injectable drugs

in any way beyond the policy effective prior to August 13, 1997.

Unfortunately, and I say this, with our good friend, Mr. Hash,

here, I don’t know if he takes this personally, or not, but maybe

in a way he should. The point is that, unfortunately, it took HCFA

over 4 months to inform carriers that the pre-August 1997 policy

should be reinstated. By law, that communication should have been

made last November.

Ironically, the administration has proposed dropping coverage for

these lifesaving drugs at the same time that Congress is considering ways to expand, as you know, access to affordable prescription drugs for all Medicare beneficiaries.

Not surprisingly, there has been bipartisan, bicameral opposition

to the proposed changes. Along with several of my colleagues, I

wrote Secretary Shalala last October, to request information regarding the rationale for the administration’s policy. We did not receive the courtesy of any reply until late yesterday evening.

Those Members who signed the letter were trying to get answers

for constituents who are being denied coverage for critical medications. However, the administration simply ignored the congressional request for over 5 months until this hearing was scheduled.

Actually, I should say, that it ignored the congressional requests.

In my opinion, this inaction demonstrates an utter lack of concern for the patients affected by these proposed changes.

I would note that the President’s budget proposal includes a provision to allow HCFA to move forward for the development of a

proposed rulemaking process on injectable drugs. I am interested

to learn why the administration believes such a rule is needed now,

over three decades after the Medicare statute was enacted.

The impact of this policy change by HCFA is not limited to Medicare beneficiaries. Decisions about Medicare policy often set precedent for policy in the private health care market and our Nation’s

entire health care system. That is why today’s hearing is so important.

I do want to thank all of our witnesses for appearing before the

subcommittee to discuss this important issue, and I particularly

appreciate the time and effort of the patients and patient advocates

who will share their experiences with us. For them, the outcome

of this debate will have significant personal consequences. I am

sure we all look forward to hearing their testimony.

I yield to Mr. Brown for his opening statement.

Mr. BROWN. Thank you, Mr. Chairman.

We have choices today about what this hearing will be about. We

can make use of this hearing to blame HCFA. We could somehow

try to pin blame on the administration, rather than on Congress,

for ambiguous language written into the Social Security Act of

1965 regarding self-administered medicines. The press loves it

when we point fingers.

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We could chastise HCFA for reiterating in a 1997 memorandum

required to address the specific coverage issue an interpretation of

the law that actually dates back to the 1980’s. It is a misplaced

criticism, but that has never stopped us before.

We could scold HCFA for allowing several months to pass before

issuing a statutorily required clarification memo. I am not sure

Congress has room to talk when it comes to creating or getting

mired in red tape, and I’m sure HCFA has an explanation for the

delay, but we should not let the facts get in the way of a good

story.

We could question HCFA’s plans to issue a proposed rule on the

meaning of the statutory term ‘‘self-administered’’, even though it

made perfect sense for Administrator DeParle to recommend this

step.

Why anyone in their right minds would believe HCFA for some

reason has it out for certain individuals who use selfadministratable prescription drugs is beyond me. Nonetheless, we

could take all our frustrations out on the agency. It would not be

the first time.

Or we could get to what really matters: Should individuals who

require a doctor’s assistance to administer an otherwise selfinjectable drug receive coverage under Medicare for that drug?

From a policy perspective, I firmly believe Medicare should cover

these individuals’ costs, regardless of the reasons behind their inability to self-administer a needed medication.

A major goal of this hearing should be to clarify what, if any, actions are necessary to ensure that any Medicare beneficiary who

needs but cannot self-administer one of these drugs have the same

access as those who require drugs that are not self-administratable.

Speaking of equitable access, it would be irresponsible to assert

that certain Medicare beneficiaries should receive coverage for certain medically necessary prescription drugs without mentioning

that all Medicare beneficiaries should receive coverage for all medically necessary prescription drugs.

I am sure most of you have seen the Committee on Ways and

Means press release in which Chairman Thomas, surprisingly

enough, takes credit for convincing the Clinton administration to

reverse its position on access to self-injectable drugs, no matter

that HCFA had already determined it would solicit comments, or

that this hearing was already scheduled when Chairman Thomas

sent his letter to HCFA.

What I found most ironic was that Chairman Thomas chastised

HCFA for, in his words, ‘‘carelessly limiting seniors’ prescription

drug coverage.’’

Let us talk about ‘‘careless.’’ Careless is abiding a Medicare program that covers some of the prescription drugs required by a

small subset of patients, but ignores the prescription drug needs of

the rest of the Medicare population. Careless is ignoring the prescription drug issue until forced by politics in an election year to

pay attention. Careless is promoting a stopgap solution to a broadscale and growing problem. Careless is lashing out at HCFA for

dragging its feet on a single policy while Congress drags its feet on

an issue that has thrown millions of seniors into crisis.

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A third of all seniors have no drug coverage. Millions more are

underinsured. Employers are dropping retiree coverage. Private

health insurers are cutting back the prescription drug benefits.

This is not an isolated or static problem that could be solved in

a piecemeal fashion. It is broadbased, and it is getting worse. Ideally we would leave this meeting today not only confident that Medicare will cover injectables, which it should when a doctor must administer them to the patient, but also confident that the selfinjectable issue will soon be moot.

The Medicare program covers hospitalization, it covers doctor’s

visits, and it should cover prescription drugs, period. I expect this

hearing to resolve potential problems for individuals who should be

eligible for coverage of self-injectable medications. I hope this hearing also takes us a step closer to Medicare prescription drug coverage for all senior citizens.

Mr. BILIRAKIS. Maybe you would not know it, but we are very

close friends.

Mr. BROWN. That is true.

Mr. BILIRAKIS. I would remind the gentleman, though, that the

problem of lack of prescription drugs for Medicare beneficiaries has

been a longstanding problem. It is only recently when any Congress—certainly not during 40 years when the gentleman’s party

controlled the Congress—and he was not here for much of that

time—had any concern for prescription drugs for Medicare.

I would now yield to the gentleman from Tennessee, Mr. Bryant.

Mr. BRYANT. Thank you, Mr. Chairman, for your comments, and

also for holding this hearing. I was very carefully watching the

doors as my time came, because I am going to have to leave and

be in and out today with other commitments. I very much am interested in what is said today. I think these are very good, very

complex issues we have to deal with.

I certainly want to hear from people who are experts by virtue

of their experience, whether it is a life experience or having to go

through this type of medical situation, or whether they are experts

educationally, from HCFA and all around.

But I was going to be brief in my remarks because I was the last

one and we can get to the panels quicker, but we have had two

members come in since that time, so I can take 10 or 15 minutes,

I guess, now.

Mr. BILIRAKIS. Take your full 5 minutes, Mr. Bryant.

Mr. BRYANT. I am concerned about this. I do want to hear the

testimony. I am in the process of reading the testimony of the witnesses. This is an important issue. It is one that—I might just reiterate what our chairman said, that this issue has been around

since the beginning of Medicare. It did not cover drugs, and I think

everybody in Washington over the years that this program has

been in existence has had the opportunity to change that.

We are now, in this Congress, attempting to I think fix a very

valid problem there for those people, especially 35 percent of the

people, senior citizens, who do not have drug coverage.

We do not want to rush to judgment, so to speak. We do not want

to go through this process of discharge petitions and things just so

we can get something out quickly that might not be right, or that

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we might try to embarrass somebody politically. We want to do it

right.

I think through hearings like this—and I realize it is a limited

hearing, it is not going to be focused on the bigger problem, but I

think this adds to that. I think one quick step from this hearing

is what are we going to do about those new drugs that are being

or have been discovered since 1997 that would fit into this category

that are very good drugs, but probably are going to be quite expensive. That is going to have to be considered when we write our drug

bill.

I continue to hope the best in Congress; that we can keep politics, even though this is an election year—that we can keep politics

out of this issue as much as possible. There is no Republican way,

there is no Democrat way on this. I think there is an American

way. I think there is a right way for the American people, particularly our senior citizens.

Again, I am rambling on now. I am going to stop, because I still

have hope that I can hear some of the testimony before I have to

leave at 11 o’clock. I yield back the balance of my time.

Mr. BILIRAKIS. Mrs. Capps?

Mrs. CAPPS. Good morning, Mr. Chairman. Thank you for holding this hearing. I send a welcome to all of the witnesses testifying

before us today.

Today’s hearing addresses one of the most critical needs of our

Nation’s seniors, drug coverage. I am glad we are looking at one

aspect of this issue today. I would urge the Chairman that we do

more. It is not a partisan issue.

Mr. Chairman, my district has a large senior citizen population.

Many of these seniors rely on lifesaving therapies like the

injectable drugs in issue at today’s hearing to treat cancer, organ

transplants, kidney failure, the side effects of chemotherapy, and

other serious conditions. Many certainly cannot afford to pay for

these self-injectable medications, which can cost up to $10,000 per

year. Even if they could afford to pay for them, many of these seniors are often so elderly or sick that they cannot safely administer

the drugs themselves.

I am glad to hear of HCFA’s recent action, but I urge them to

take action to extend that ruling permanently. I have to call to

mind a dear friend of mine, an elderly man who was our church

organist for many years.

He became very ill and was in critical care in a hospital for a

while. He was able to be discharged, and was thrilled to go home.

Then he discovered that the injectable that he needed to sustain

him, which could be given at home, would not be covered by Medicare. It was so expensive he had to return to the acute care facility

for a period of extended time, many weeks, solely to get this treatment. It is not a good use of our resources.

Recently I cosponsored H.R. 2892, introduced by my colleagues,

Jay Inslee and Jennifer Dunn. This bill would require Medicare to

cover self-injected biologics prescribed in lieu of a drug already covered by Part B. It would provide a patient with a choice between

the intravenous in-office therapy or the self-injected therapy, depending on what is best for the patient.

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Because of the savings from eliminated costs associated with inoffice administration, this bill is basically budget-neutral. Some

have even speculated that covering some self-injected products will

actually save the Medicare program substantial dollars. I would

hope that the committee would move this legislation soon.

As a nurse, I am particularly concerned that lack of access to

drugs, to prescribed drugs, could be compromising seniors’ health.

In fact, I fear that it actually does. I believe this is one of the most

critical issues facing our country’s health care today.

I happen to represent a district where Medicare HMOs have

been pulling out because of ridiculously low reimbursement rates.

Of course, seniors are the ones who are truly hurt by all of this.

They are the ones that have their lives disrupted when an HMO

drops them. They are the ones who lose their prescription drug coverage and are forced to pay the full price for their medications out

of their own pocket.

Many seniors simply cannot afford the high prices, so instead

they take half the prescribed dose, or they just do not even buy

these lifesaving medications because they cost too much.

We all know that today’s prescription drugs are literally miracle

drugs, and we cannot imagine quality health care without them. So

while I am glad that we are holding this hearing today, I am very

disappointed that this Congress has yet to address the issue of a

Medicare drug benefit in any meaningful way.

Thank you, Mr. Chairman. I yield back my time.

Mr. BILIRAKIS. I thank the gentlewoman.

Mr. Upton from Michigan.

Mr. UPTON. Thank you, Mr. Chairman. I know we are going to

have a vote on the Journal in just a few minutes, so I am going

to put my statement into the record.

I just want to welcome our witnesses today, particularly Mr.

Hash, who has done, I think, a pretty remarkable job in his role

at HCFA.

One of the things that I intend to focus on is on the differences

between States in reimbursing individuals, both under Medicare

and Medicaid. I look forward to the testimony, and I yield back.

[The prepared statement of Hon. Fred Upton follows:]

PREPARED STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding today’s hearing on Medicare patients’ access

to self-injectable drugs. As a fellow member of the Chairman’s task force on prescription drug coverage, I know that we share a deep concern about the burden that

prescription drug costs place on the millions of Medicare beneficiaries who do not

have any insurance coverage for prescriptions. No senior citizen should be forced to

forego needed medication, take less than the prescribed dose, or go without other

necessities in order to afford life-saving medications. Our nation leads the world in

the development of new drugs and medical devices that enable us to effectively treat

diseases and conditions. But if people cannot afford to buy these drugs, their benefits are lost to many in our population.

Until we can get a plan in place, it is important that we permit seniors who are

getting a little assistance now under the Medicare program with their prescription

needs to keep that assistance. I want to know what prompted the Health Care Financing Administration to issue a program memorandum to its Medicare carriers

substantially tightening a long-standing policy that permitted Medicare carriers to

cover some self-injectable drugs.

I want to raise a related issue, too. Last year, I was contacted by a constituent

suffering from carcinoid cancer. Her physicians at the Mayo Clinic prescribed a drug

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that can be a self-injectable. They told her that if she lived in Minnesota, Medicare

would cover the drug, but that the Medicare carrier for Michigan, Wisconsin, and

Illinois had elected not to cover it. I investigated this situation and found that was

in fact the case and that Medicare carriers apparently have a lot of latitude in making these determinations.

Michigan later decided to cover this drug, and I believe that there may now be

a national coverage policy in place on it. But this case is still very troubling to me.

My Michigan constituents pay the same premiums as beneficiaries in Minnesota

and other states whose carriers elected to cover this drug. I can see state by state

variations ’in coverage policies in the Medicaid program, but not in the Medicare

program, which is fully federally financed and national in scope. I’m going to try

to get some answers today.

Mr. BILIRAKIS. I thank the gentleman.

The opening statements of all members of the subcommittee are

made part of the record.

Mr. Norwood.

Mr. NORWOOD. Mr. Chairman, thank you for holding the hearing.

We do thank our witnesses. As might be a little unusual, I will

simply submit my opening statement for the record this morning,

and give you a break.

[Additional statement submitted for the record follows:]

PREPARED STATEMENT OF HON. TOM BLILEY, CHAIRMAN, COMMITTEE ON COMMERCE

I want to thank the Chairman of the Health and Environment Subcommittee, Mr.

Bilirakis for convening this hearing today. The issue of providing Medicare beneficiaries with access to prescription drugs is an issue this Committee is committed

to addressing.

This is the fourth hearing this Subcommittee has conducted to focus on Medicare

beneficiary access to prescription drugs. The Committee has invited the Health Care

Financing Administration to testify three times on this topic. While I mean no disrespect to Mr. Hash, who formerly served on the staff of this Committee, I am disturbed that the HCFA Administrator, Nancy Ann Min DeParle, has been unavailable to attend any of the prescription drug hearings to which she has been invited.

She is the head of HCFA, and it is her signature on the letters I have here explaining why Medicare will no longer cover certain life-saving drugs that it had previously provided coverage for.

We can all agree that no one would design a health care benefit today that did

not include access to prescription drugs. This is just one significant area where the

Medicare program doesn’t measure up—particularly when compared to the health

benefits we all enjoy working here in the Congress. I’ve been spending a lot of time

studying this issue, and I agree with all my colleagues that we should do something

to help seniors access affordable prescription drug coverage.

As I’ve already said, we’ve had three hearings on the larger issue of outpatient

prescription drugs and we are working on addressing that issue. But that is not the

topic of today’s hearing.

We are here today to address the concerns of those patients who have had coverage for certain medications in the past, but due to a policy change by HCFA, no

longer have that coverage. Since the Medicare program’s inception 35 years ago, certain injectable drugs and biologicals have been covered when those drugs were administered by a physician in his or her office. Up until 1997, patients in need of

these life-saving therapies had some comfort in knowing that, in almost all cases,

they would have access to them. On August 13, 1997, HCFA effectively reversed this

long-standing policy by issuing a Program Memorandum which caused Medicare

carriers to discontinue coverage for these drugs and biologicals.

Not only did Medicare beneficiaries see their coverage curtailed, but some private

health insurers began to follow suit and started denying coverage as well.

Recognizing that HCFA’s Program Memorandum was resulting in a change in

coverage policy that was having a devastating impact on patients in need of these

drugs, Congress directed HCFA to reinstate the coverage policy that had existed

prior to the August 13 Program Memorandum. Subsequently, President Clinton in

his FY 2001 Budget request, proposed that the action taken by Congress last November and approved by the President be repealed.

I was pleased that last Friday, on St. Patrick’s day, HCFA finally complied with

the law that Congress passed to ensure that people with Cancer, Multiple Sclerosis,

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AIDS and other diseases will once again have access to the lifesaving drugs they

need.

For as long as Medicare has been on the books it has paid for these drugs. For

reasons unbeknownst to me and many of my colleagues, HCFA began restricting

coverage in August of 1997. I am further baffled as to why it has taken the Administration four months to comply with the law, and restore coverage for these life saving drugs. As we will hear from today’s brave witnesses, this policy has had a direct

impact on patient care. I believe this is unacceptable. The American people deserve

better. The patients we will hear from today deserve better.

I have some specific questions for Mr. Hash today that I’d like to just highlight

now. I’d like to know why HCFA decided to change a 33 year old policy in favor

of one that denied patients treatment that Medicare had previously paid for. I’d like

to know why it took HCFA four months to comply with a law passed last November

instructing them to return to the previous coverage policy. And I’d like to know

what the Agency intends to do next October when current law expires. I welcome

Mr. Hash here today, and hope he can provide this Committee with some answers

to these questions.

Finally, I particularly want to thank the witnesses on our second panel for making the trip here to the Nation’s Capitol to tell us their stories. I welcome you and

appreciate how important this issue is to you and your families.

Mr. BILIRAKIS. It is somewhat unusual.

Mr. Hash, if you will come forward, sir.

Mr. Hash, as we all know, is Deputy Administrator of Health

Care Financing Administration, based here in Washington. Michael, it is always great to have you here. Hopefully you can help

us out on some of these things that concern us.

Please proceed. We set it at 10 minutes. Obviously, do the best

job you can.

STATEMENT OF MICHAEL HASH, DEPUTY ADMINISTRATOR,

HEALTH CARE FINANCING ADMINISTRATION

Mr. HASH. Thank you, Mr. Chairman.

Chairman Bilirakis, Mr. Brown, and other distinguished members of the subcommittee, I want to thank you for inviting us here

today to discuss Medicare’s coverage for self-administered drugs.

The current situation, as all of you recognize, presents a really

compelling example of why we must modernize the Medicare program with an affordable, comprehensive outpatient prescription

drug benefit.

Medicare coverage for pharmaceuticals is now severely restricted

outside of hospitals and nursing facilities. Congress has created

only a limited number of exceptions outside of those settings in the

law. One exception is for drugs that cannot be self-administered.

The statute says Medicare must pay for drugs that cannot be selfadministered when furnished as part of a physician’s professional

services.

Medicare’s longstanding policy for coverage under this exception

has addressed only whether a drug can be self-administered, not

whether an individual patient can self-administer the drug. Congress has not provided an explicit exception for those who cannot

self-administer drugs that generally are self-injectable.

The shortcomings of such a policy become clearer every day as

we witness the new advances in drug therapies that are so important to patients’ lives. Medicaid, and of course most private insurers, pay for all prescription drugs, regardless of whether they are

self-administered. The current policy in Medicare is most troubling

for conditions such as multiple sclerosis, where some patients can

administer their drugs and others cannot. It is enough of a burden

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to cope with the effects of such a debilitating disease without having in addition the worry of how to pay for expensive drugs.

Mr. Chairman, I think we all agree that the current limitations

on Medicare coverage for self-administered drugs leave some beneficiaries without the medications they need. However, we are

scheduling town hall meetings now, as directed by Congress, to

allow all interested parties to air their concerns about the current

situation, and to discuss available options, such as regulatory action to expand coverage for those who cannot self-administer drugs.

Our first town meeting has been scheduled in Baltimore on May

18.

However, regulatory action to create another narrow exception

allowing coverage for only some beneficiaries may not be the best

solution to this problem. This approach could compound the current

inequities that exist in our coverage policy.

Our clinicians at HCFA are concerned that such a narrow exception could create ethical dilemmas for compassionate physicians

treating patients who can self-administer but who cannot afford the

drug. This issue is in fact, as all of you know, a very small part

of a larger problem for which patchwork solutions simply will not

suffice.

As many Medicare beneficiaries lack prescription drug benefit

coverage today as senior citizens lacked hospital coverage when

Medicare was created in 1965. The program’s current coverage restrictions leave many beneficiaries without coverage they need, not

just those who are unable to self-administer drugs. We need to expand coverage to all beneficiaries. Patchwork solutions and limited

exceptions cannot address a problem of this magnitude.

All beneficiaries, regardless of their health, their income, need

access to an affordable, comprehensive outpatient drug benefit, as

has been proposed by the President. Mr. Chairman, we look forward to working with you on this critical issue.

I do want to say, in response to your opening statement, Mr.

Chairman, that we always try to be very responsive to any inquiry

that you might make. I did write you myself, in response to your

October letter, on November 3rd, where I attempted to lay out

what Medicare’s coverage policy was for self-injectable drugs, and

I also indicated that we were working on a regulation to review the

options that might be available for us to address this problem more

adequately.

Thank you for your invitation for us to be here. I would be happy

to answer any questions that you or other members of the subcommittee may have.

[The prepared statement of Michael Hash follows:]

PREPARED STATEMENT OF MICHAEL HASH, DEPUTY ADMINISTRATOR, HEALTH CARE

FINANCING ADMINISTRATION

Chairman Bilirakis, Congressman Brown, distinguished Subcommittee members,

thank you for inviting us to discuss Medicare coverage for self-administered drugs.

The current situation provides a compelling example of why we must modernize

Medicare with an affordable, comprehensive, outpatient prescription drug benefit

available to all beneficiaries.

Medicare coverage for pharmaceuticals is now severely restricted outside of hospitals and nursing facilities. Congress has created only a limited number of exceptions, each spelled out in the law. One exception is for drugs that cannot be selfadministered. Section 1861 (s)(2)(A) of the statute says Medicare may pay for drugs

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‘‘which cannot, as determined in accordance with regulations, be self-administered’’

when furnished ‘‘as an incident to a physician’s professional services, of kinds which

are commonly furnished in physicians’ offices and are commonly either rendered

without charge or included in the physicians’ bills.’’

Medicare’s longstanding policy for coverage under this exception has addressed

only whether a drug can be self -administered, not whether an individual patient

can self-administer the drug. And Congress has not provided an explicit exception

for those who cannot self-administer drugs that generally are self-administered.

The shortcomings of such a policy become clearer every day with dramatic new

advances in drug therapies. Medicaid and most private insurers pay for all prescription drugs, regardless of whether they are self-administered. The current policy is

most troubling for conditions such as multiple sclerosis, where some patients sometimes can administer their drugs and others cannot. It is enough of a burden to cope

with the effects of such a disease without the worry of paying for expensive drugs.

We all agree that the current limitations on Medicare coverage for self-administered drugs leave beneficiaries without the medications they need. However, regulatory action to create limited exceptions allowing coverage for only some beneficiaries may not be the best solution to this problem.

Our clinicians at HCFA are concerned that creating such a narrow exception to

the ban on Medicare coverage for outpatient drugs could create an ethical dilemma

for compassionate physicians when caring for patients who can self-administer

drugs but cannot afford the drugs they need. This approach could compound the current inequities in coverage, and may also create program integrity problems.

This issue is, in fact, a small part of a much larger problem for which patchwork

solutions will not suffice. As many Medicare beneficiaries lack drug coverage today

as senior citizens lacked hospital coverage when Medicare was created. All beneficiaries, regardless of health or income, need access to an affordable, comprehensive

outpatient drug benefit, as has been proposed by the President.

BACKGROUND

Like many specific coverage policies in Medicare’s history, determination of

whether a specific drug could be self-administered has been left up to the medical

directors of each claims processing contractor. Instructions to Medicare claims processing contractors on this issue have been provided through the Medicare Carrier

Manual and were updated in 1995. Those instructions state that drugs may be covered only if they ‘‘are of the type that cannot be self-administered.’’

The question of whether a drug could be ‘‘self-administered’’ was self-evident

when Medicare was created in 1965. A pill was self-administered, most injections

except for insulin were not, so regulations defining ‘‘self-administered’’ were not promulgated. But now, dramatic advances in drug therapies have changed the medical

landscape. Cancer drugs, for example, that had been available only as injections

have become available in pill form.

Congress recognized some of these changes in technology in the Omnibus Budget

Reconciliation Act of 1993 by authorizing Medicare coverage for certain oral

anticancer drugs that contain the same active ingredient as an injectable drug that

would be administered by a physician. The law also allowed for coverage of self-administered anti-emetic agents necessary for proper absorption of oral anticancer

drugs covered under this provision. And it provided for coverage of clotting factors

that hemophiliacs self-administer to control their condition.

Congress, however, has not created exceptions in the law to accommodate other

compelling situations. Pharmaceutical advances are allowing more types of patients

with different types of diseases to be successfully taught to administer drugs they

need themselves. But some of these new agents are for conditions, such as multiple

sclerosis, that create an unfortunate dilemma. Many of these patients can self-administer drugs. But others, especially those in later stages of the disease, are so debilitated that they cannot administer the drugs themselves.

We issued a memorandum in August 1997 clarifying the guidance in our carrier

manual to emphasize that Medicare claims processing contractors may cover generally self-administered drugs when a provider is administering the drug in order

to teach a patient how to self-administer. We did this to encourage more coverage

in these situations. The memorandum also reiterated the long-standing policy that

an ‘‘individual patient’s mental or physical ability to administer any drug’’ may not

be taken into consideration.

Because of continuing concern over this issue, we had planned to publish a proposal in the Federal Register exploring options and requesting public comments on

ways to define ‘‘self-administered’’ through regulation. One option would have been

to possibly expand coverage by taking individual patient conditions into account.

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Unfortunately, some observers misinterpreted our plans for a proposal in the Federal Register as an effort to further restrict coverage.

This series of events led to inclusion of language in the Appropriations Act of 2000

in which Congress barred use of HCFA funds to carry out the transmittal of the

August 1997 memo. The appropriations language also prohibited us from promulgating ‘‘any regulation or other transmittal or policy directive that has the effect of

imposing (or clarifying the imposition of) a restriction on the coverage of injectable

drugs under section 1861(s)(2) of the Social Security Act beyond the restrictions applied before the date of such transmittal.’’

We therefore postponed our proposal to solicit public comments on options in the

Federal Register to avoid the appearance that we are attempting to restrict coverage

in violation of the appropriations language. We have also suspended our 1997

memorandum and, as required by the law, alerted our contractors that current guidance on this matter is limited to instructions issued to them before the 1997 memorandum. We also are scheduling town hall meetings, as directed by Congress, to

allow all interested parties to air concerns about the current situation and discuss

available options. The first is set for May 18 in Baltimore.

We all agree that the current situation is not acceptable. The best solution is to

provide all beneficiaries with access to affordable and comprehensive coverage for

outpatient prescription drugs.

Need for Comprehensive Drug Benefit

Prescription drugs are as essential to modern medicine today as hospital care was

when Medicare was created. Yet as many beneficiaries lack drug coverage today as

senior citizens lacked hospital coverage then. Three out of five lack dependable coverage. Only half of beneficiaries have year-round coverage, and one third have no

coverage at all.

Beneficiaries without drug coverage must pay for essential medicines fully out of

their own pockets, and are forced to pay full retail prices because they do not get

the generous discounts offered to insurers and other large purchasers. The result

is that many go without the medicines they need to keep them healthy and out of

the hospital.

This year more than half of Medicare beneficiaries will use prescription drugs

costing $500 or more, and 38 percent will spend more than $1000. Each year, about

85 percent of Medicare beneficiaries fill at least one prescription. About half of the

beneficiaries without coverage have incomes above 150 percent of poverty (above

$17,000 for an elderly couple). Analysis by the National Economic Council shows

that middle-income beneficiaries without prescription drug coverage purchase 20

percent fewer drugs but pay about 75 percent more out-of-pocket than those with

drug coverage.

This situation is worse for the 10 million Medicare beneficiaries who live in rural

areas. Nearly half of these beneficiaries have absolutely no drug coverage. They

have less access to employer-based retiree health insurance because of the job structure in rural areas. And three-quarters of rural beneficiaries do not have access to

Medicare+Choice plans and the drug coverage that many of these plans provide.

No one would design Medicare today without including broad coverage for prescription drugs. The private sector now includes outpatient drug coverage as a

standard benefit in almost all policies. Further, all plans in the Federal Employees

Health Benefits Program are required to offer a prescription drug benefit. And prescription drugs are particularly important for seniors and disabled Americans, who

often take several drugs to treat multiple conditions. All across the country, Medicare beneficiaries are suffering physical and financial harm because they lack substantive prescription drug coverage.

The President has proposed a comprehensive Medicare reform plan that includes

a voluntary, affordable, accessible, competitive, efficient, quality drug benefit that

will be available to all beneficiaries. The President’s plan dedicates over half of the

on-budget surplus to Medicare and extends the life of the Medicare Trust Fund to

at least 2025. It also improves preventive benefits, enhances competition and use

of private sector purchasing tools, and strengthens program management and accountability.

Key Principles

The President has identified key principles that a Medicare drug benefit must

meet.

• It must be a voluntary benefit accessible to all beneficiaries. Since access

is a problem for beneficiaries of all incomes, ages, and areas, we must not limit

a Medicare benefit to a targeted group.

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• It must be affordable to beneficiaries and the program. We must provide

assistance so almost all beneficiaries participate. Otherwise, primarily those

with high drug costs would enroll and the benefit would become unaffordable.

And beneficiaries must have meaningful protection against excessive out-ofpocket costs.

• It must be competitive and have efficient administration. Beneficiaries

must have bargaining power in the market place. And we must integrate the

benefit into Medicare but use the private sector to deliver it.

• It must ensure access to needed medications and encourage high-quality

care. Beneficiaries must have a defined benefit providing access to the medications that their physicians deem to be medically necessary, and they must have

the assurance of minimum quality standards, including protections against

medication errors.

• It must be consistent with broader reform. The drug benefit should be a consistent part of a larger plan to strengthen and modernize Medicare.

The President’s plan meets these principles.

• Beneficiaries will have access to an optional drug benefit through either traditional Medicare or Medicare managed care plans. Those with retiree coverage

can keep it.

• Premiums will be affordable, with extra assistance for those with low-incomes.

• There will be no price controls or new bureaucracy; instead, the new benefit will

be offered through private pharmacy benefit managers who can efficiently negotiate fair prices. All qualified pharmacies will be allowed to participate.

• Beneficiaries can get all drugs prescribed by their physicians from private benefit

managers who meet minimum quality standards.

CONCLUSION

The need for an affordable, comprehensive, outpatient prescription drug benefit in

Medicare is clear. The program’s current coverage restrictions leave many beneficiaries without the coverage they need.

We want to expand coverage to all beneficiaries, not further restrict coverage.

Patchwork solutions and limited exceptions cannot address a problem of this magnitude. There is broad consensus that the Medicare program must cover prescription

drugs. Mr. Chairman, the opportunity is before us. The time to act is now.

We look forward to working with you further on this critical issue. I thank you

for holding this hearing, and I am happy to answer your questions.

Mr. BILIRAKIS. Thank you, Michael. We will try to continue for

another few minutes.

You made the statement, and we hear an awful lot of this, that

legislative intent and the language in an appropriations bill may

not be as clear as it should be.

But the thing that frustrates me is that we do not hear from you

to that effect. We do not hear you tell us that ‘‘you were not clear

enough in the way you drafted it. Therefore, this is what we recommend,’’ or whatever the case may be. That is what is so really

very frustrating. Of course, that was the intent of our October letter, and to date, we still have not heard anything.

We all know that—when I say we have not heard anything, we

have not heard anything in terms of making recommendations, telling us basically that it is really the fault of the Congress, and this

is what needs to be done, or something of that nature.

You refer to your town meetings. Had it been your intent to hold

these all along? Yes, we did in fact require town meetings, but 4

months have gone by. Has it been your intent all along that you

not do anything until after you have held your town meetings?

Mr. HASH. No, sir. We were trying to follow the language in the

appropriations act faithfully, Mr. Chairman. Under that direction,

we were told to do three things. One was to suspend the memorandum that we issued in August 1997, as you know. The second

was to suspend any work on a regulation that would have any efVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00016 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
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fect in limiting the coverage of self-injectable drugs. The third issue

was that we should—in the conference report on the appropriations

bill, it was suggested that we should hold town hall meetings to

make sure stakeholders had an opportunity to comment on these

issues.

Mr. BILIRAKIS. In the order in which you have stated them? Is

that the way you interpreted them?

Mr. HASH. Yes, sir. And also, I would like to say that in my letter

to you of November 3, in response to your October letter, Mr.

Chairman, I did lay out that we were working on a regulation to

address these issues.

We had recognized that, as all of us have, there have been tremendously important advancements in prescription drugs, many of

which now can be administered in ways that do not require administration by a physician, and that part of our intent of doing a regulation was in fact to lay out alternatives and to get public comment, as we normally do in the rulemaking process, because we

joined you in a concern about the limitations under the statute

with respect to this coverage.

Mr. BILIRAKIS. Mr. Brown was at least partially right, certainly

not completely right, but we should not be up here throwing stones.

They are throwing stones because they say we have to do something overall on prescription drugs, and we have never disagreed

with that.

As a matter of fact, I will repeat, we are the ones who are really

working hard at that, unlike the past 40 years prior to when we

took over—I hate to say that, because it is part of the statement.

So we should not be throwing stones at one another, we should be

working together on these things. I guess that is politics, and you

do that.

The reasons, I suppose, why the prior majority, when they were

the majority, did not address this issue was because of the difficulty of it, the expenses, trying to get it right. I don’t know.

Frankly, I don’t remember that there were any efforts being made

up here during all of those years, and I have been here for a good

bit of them.

The AARP recently testified before this subcommittee that they

would oppose any solution that is rushed, because they feel it is a

very complex issue. It is something that is on a fast path, we feel.

I like to think that some of the comments that I have read in

CQ made by some of the minority leader’s chief staffers are not

true when they say they would rather see nothing done unless

there is a complete Republican capitulation, to use their words. I

have been carrying that around with me, but I changed suits this

morning and I did not bring it with me. But I intended to read it

for my friend, Mr. Brown. So I hope that that is a wrong interpretation on my part.

I guess what I am saying, it is going to take a while. It may not

take too long. Hopefully we will get it done this year. But in the

meantime, there are some people out there hurting, and they are

not—we are not talking about adding them to the Medicare program, which is what you are saying when you say solve the overall

picture with prescription drugs.

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We are saying, do what Congress intended back in the 1997 act

and keep those people covered, because they were covered in the

past. So it seems to me that if in fact HCFA is waiting until we

can do something for the overall problem, we are really gambling

with the lives of patients who depend on these medications. You

would agree on that, wouldn’t you?

Mr. HASH. We want to do whatever we can to address this problem as quickly as possible. That is true, Mr. Chairman.

I would also say, Mr. Chairman, that there have been some attempts during the long history of the Medicare program to address

prescription drugs. Congress, actually, in a bipartisan fashion,

passed something called the Catastrophic Act of 1988 in which we

included——

Mr. BILIRAKIS. Don’t remind us.

Mr. HASH. I understand why you might say that, Mr. Chairman.

It did include coverage for outpatient prescription drugs.

Mr. BILIRAKIS. I supported it, and suffered along with so many

others as a result of it.

Just very quickly, Section 219 of the fiscal year 2000 appropriations act that we have been referring to directed HCFA to cover

injectable drugs and biologicals as it did before the August 1997

program memorandum.

It is my understanding that this coverage was intended to apply

to all drugs and biologicals that had been reimbursed based on the

‘‘usual method of administration,’’ and not just the drugs and

biologicals that had been approved before August 13, 1997.

Has this been HCFA’s practice?

Mr. HASH. Our practice, we have had a longstanding policy with

regard to the coverage of drugs that can be self-administered. The

August 13, 1997 memorandum to our regional offices was intended,

Mr. Chairman, to actually modestly expand our historic coverage

by recognizing that with the advent of many of these new drugs

that could be self-administered, that we needed to encourage that

by offering some limited coverage to individuals in physicians’ offices at the time they began administration of this, so they could

be taught how to self-administer drugs.

The 1997 memorandum was largely an attempt to say we were

expanding what was otherwise our longstanding policy regarding

self-administered drugs to allow some limited coverage in the case

of individuals who were learning how to self-administer drugs

under the supervision of their physician.

Mr. BILIRAKIS. But in any case, never any intent to just limit

them to—limit this coverage to those drugs approved prior to the

August, 1997 date?

Mr. HASH. No, no, sir, not to my knowledge.

Mr. BILIRAKIS. Thank you.

Mr. Brown.

Mr. BROWN. Mr. Chairman, I appreciate you and the majority

working so hard on prescription drugs. We have legislation, the

Allen bill, the Sanders bill, the Stark bill, my bill, and we could

save you a lot of work by just adopting one of those, Mr. Chairman,

if you would choose one.

Mr. Hash, we have injectable drugs that are self-administratable,

we have injectable drugs that are not self-administratable but can

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be given by a nontrained person, we have injectable drugs that are

not self-administratable but can only be given by trained medical

personnel.

Which of these three, just so we understand again, which of

these three does HCFA cover?

Mr. HASH. Mr. Brown, generally speaking, Medicare does not

cover drugs that are labeled self-injectables. There are a number

of exceptions that are laid out in the law with respect to certain

drugs that are self-injectable that are covered under Medicare relating to cancer drugs, certain renal failure drugs, hemophilia, clotting factors. Those are all self-administered drugs that by statute

are carved out and in fact covered for Medicare beneficiaries.

As it stands now, we are trying to implement that in the fairest

and fullest way possible, but generally speaking, the program has

followed the label indications by the FDA about whether a drug is

self-administratable or not.

Mr. BROWN. Does HCFA make the distinction of a patient’s individual medical circumstances?

Mr. HASH. We do not. We do not believe—our longstanding policy

on this was that we reviewed the literature and the FDA labeling

to determine whether something could be self-administered, not the

capacity of the individual patient to administer the drug themselves.

Mr. BROWN. Does this make sense, this incredibly complex way

we are doing this?

Mr. HASH. It is clearly not in the best interests, I think, of patients who need access to these drugs. There is no question about

that. But we believe that the statute and our longstanding policy

has been an exclusion for coverage in the Medicare benefit package

of drugs that can be self-administered. That is what the law says,

and that is what we have been doing.

We would like to find a way to expand coverage in this way. That

is why we were poised to put out a regulation that included a number of options that would take a look at this and involve stakeholders in it, and of course we believe, as I said in my opening

statement, that patchwork solutions are really not what is going to

address this problem, that we do in fact need a comprehensive outpatient drug benefit.

Mr. BROWN. I appreciate that. I do want to work bipartisanly

with the chairman. In this subcommittee we have been able to do

this. Sometimes the full committee has fallen short, sometimes all

of us have. I think this subcommittee has been able to put partisanship aside better than most because of the Chairman’s leadership.

I do hope that in two ways we can do something in conference.

One is Medicare coverage, and second, a way really beyond the

President’s plan to deal with the exploding price of prescription

drugs also, where we pay two and three times in this country what

people in other countries pay; where individuals pay out of pocket

twice as much as the VA pays and insurance companies and large

hospitals pay.

I yield back, Mr. Chairman.

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Mr. BILIRAKIS. I thank the gentleman. I know he sincerely means

it when he says he wishes we would work together to provide access to these drugs.

We will recess for 5 minutes for a vote and we will be right back.

[Brief recess.]

Mr. BILIRAKIS. Thank you for your patience. The Chair now recognizes the gentleman from Tennessee, Mr. Bryant.

Mr. BRYANT. Thank you, Mr. Chairman.

Mr. Hash, in your written testimony as well as your statement

today you indicate that current limitations on Medicare coverage

for self-administered drugs leaves beneficiaries without the medications they need. You go on to state further that, ‘‘The current situation is not acceptable.’’

But in reality, is it not true that for 30 years, HCFA had a policy

that appropriately provided for coverage of certain injectable drugs,

and that in fact it was not until HCFA’s PM of August 1997 that

caused this effect of denying coverage for those injectable drugs?

Mr. Chairman, I ask unanimous consent to put into the record

two letters from Senators from the other body, one from Senator

Kennedy, which, just extracting from that, it is directed to the Administrator at HCFA, your boss, Ms. DeParle, saying ‘‘As you

know, Avonex, which is produced by Biogen, a leading Massachusetts biotechnology company, which was covered by Medicare until

1997’’——

Mr. BILIRAKIS. Without objection, that will be the case.

I might add, if I may, that the letter that I initiated, signed

along with me by 3 or 4 other members of October 18 to Ms.

Shalala will be made part of the record, without objection.

[The information referred to follows:]

UNITED STATES SENATE

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

February 16, 2000

NANCY ANN MIN DEPARLE

Administrator

Health Care Financing Administration

Room S14G, Hubert H. Humphrey Building

200 Independence Avenue

Washington, D.C. 20201

DEAR MS. DEPARLE: I’m writing to urge the Health Care Financing Administration to take additional steps to make clear that Medicare coverage is available for

Avonex, an injectable drug used to treat multiple sclerosis. As you know, Avonex,

which is produced by Biogen, a leading Massachusetts biotechnology company, was

covered by Medicare until 1997, when HCFA issued a memorandum to its regional

offices on self-administered drugs. Avonex was determined to be self-administerable,

and coverage was stopped for all Medicare patients.

In the wake of this decision, Congress acted last fall to restore the coverage. Section 219 of the ‘‘Department of Health and Human Services Appropriations Act

2000’’ (Public Law 106-113, Appendix D, 113 Stat. 15001A-241; November 29, 1999)

provides that HCFA may not give any operative effect to its August 13, 1997 memorandum on self-administered drugs, or to any restrictions on coverage of such drugs

imposed after the memorandum was issued.

I understand that many carriers responsible for Medicare reimbursement are unaware of the action by Congress on this coverage. I urge you to take all appropriate

steps to see that this restoration of Medicare coverage for Avonex is clearly communicated to those administering Medicare, so that access by patients to this important treatment is available again as soon as possible.

With respect and appreciation,

Sincerely,

EDWARD M. KENNEDY

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UNITED STATES SENATE

WASHINGTON, DC

October 27, 1999

The Honorable DONNA SHALALA

Secretary

U.S. Department of Health and Human Services

200 Independence Avenue SW

Washington, D.C. 20201

DEAR SECRETARY SHALALA: I am concerned about HCFA’s intention to change the

regulation regarding coverage for injectable drugs. The current policy that reimburses for drugs biologicals when provided incident to a physician’s services is important for Medicare beneficiaries, especially those with cancer. Patients depend on

us to ensure that they get the best cancer-care available. Restricting this policy at

a time when the President and Congress are considering ways to expand drug coverage for seniors seems contradictory.

Cancer patients rely on supportive care drugs to help treat the symptoms and side

effects of cancer and chemotherapy. These drugs that include colony stimulating factors, hematopoietic growth factors and low molecular weight heparins are an integral part of their chemotherapy regimen. These drugs can help patients tolerate

their cancer treatment and improve their quality of life. Without coverage for these

vital drugs, Medicare cancer patients may experience more infections and hospitalizations. The result may be increased costs to the health care system.

As I understand the situation, HCFA has covered injectable drugs that are given

incident to a physician’s services, if the drug is usually not self-administered. However, based on an August 1997 HCFA program memorandum to its regional office,

some Medicare carriers are basing coverage decisions on whether they think some

hypothetical patient could self-administer the drug, regardless of the standard

method of administering a particular drug or a physician’s judgment about the individual patient’s ability to self-administer a necessary injection safely. The result has

been narrowing coverage and, in some cases, denying coverage for medically necessary and clinically appropriate injectable drugs.

Many or most elderly cancer patients are not capable of injecting themselves, and

often rely on health care professionals to help them. It is inaccurate to think that

these drugs are usually self-administered, especially in this patient population.

I oppose any action on HCFA’s part to restrict coverage of injectable drugs that

are usually not self-administered. These drugs are a vital part of our Medicare beneficiaries’ cancer regimen. Furthermore, the rule-making process is not necessary for

HCFA to clarify its longstanding and broadly-supported policy to reimburse for

injectable drugs that are usually administered incident to physicians’ services. I suggest that HCFA notify the carriers through an official communication that carriers

should continue to reimburse for these products, as they have since the inception

of the Medicare program. I appreciate your careful examination of this issue, and

request a status of HCFA’s progress on clarifying this rule with your carriers.

With best personal regards, I am

Sincerely,

MAX BAUCUS

CONGRESS OF THE UNITED STATES

WASHINGTON, DC

October 18, 1999

The Honorable DONNA SHALALA

Secretary

U.S. Department of Health and Human Services

200 Independence Avenue SW

Washington, D.C. 20201

DEAR SECRETARY SHALALA: We understand that the Health Care Financing Administration (HCFA) is reviewing a policy that would effectively limit the access of

Medicare beneficiaries to injectable drugs that are covered ‘‘incident to a physician’s

service.’’ We are writing to express our serious concern about the impact of this policy on patients’ ability to obtain necessary medications.

In the past, the administration of chemotherapeutic agents and life-saving

injectable drugs in a physician’s office to treat degenerative diseases was routinely

covered by Medicare, if the drug was not usually self-administered by the patient.

In August 1997, HCFA issued a memorandum to its regional offices ‘‘to clarify proVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 E:\HEARINGS\64029 pfrm08 PsN: 64029
18

gram policy with respect to drugs that are usually self-administered, but may not

always be self-administered.’’

It has come to our attention that under this guidance, some Medicare carriers are

making coverage determinations based on a hypothetical analysis of a patient’s ability to self-administer the drug—irrespective of the standard method of administering a particular drug or a physician’s judgment about the individual patient’s

ability to self-administer a necessary injection safely.

This policy could seriously limit the access of Medicare beneficiaries to important

injectable pharmaceuticals. It is also likely to create confusion among beneficiaries

and providers regarding coverage of medications administered in a physician’s office.

We would like to fully understand the rationale for this new policy. To that end,

we are requesting your responses to the following questions:

1. What are HCFA’s objectives with regard to coverage for injectable drugs provided

incident to a physician’s visit? What is the purpose of issuing a notice of proposed rulemaking? Is the Administration attempting to restrict coverage, to

limit budget expenditures for currently covered products, or to limit coverage

of future products?

Over the past two years, HCFA’s policy regarding injectable drugs covered incident

to a physician’s visit has been interpreted in different ways. What is the current

HCFA policy? Are the carriers aware of this policy, and are they implementing

it accordingly?

3. What therapeutic categories of drugs will be addressed in any proposed rule? Are

those categories currently covered?

4. What would be the impact of any change in policy for patient access, patient quality of care, and patient financial contributions?

5. Is HCFA’s intent to continue coverage for products that are currently covered?

6. What other methods does HCFA have to clarify its policy without disrupting beneficiary services?

Considering the very serious nature of this issue, we respectfully ask that you respond to us with the requested information no later than October 22, 1999. Most

importantly, we request that HCFA take no action with regard to changes in this

policy, including publication of a proposed rule, until we have had a chance to examine all the relevant information and work with HCFA to address our concerns.

Thank you for your prompt attention to this matter.

Sincerely,

REP. MIKE BILIRAKIS

REP. ERNIE FLETCHER

REP. DEBORAH PRYCE

REP. JAMES GREENWOOD

REP. NANCY JOHNSON

cc: Nancy-Ann DeParle, HCFA Administrator

Mr. BRYANT. Senator Kennedy continues, ‘‘When HCFA issued

this program memorandum, its regional offices at Avonex was determined to be self-administratable, and coverage was stopped for

all Medicare patients.’’

The second letter is from Senator Baucus that says, and that is

October, 1999; it says, ‘‘Restricting this policy at a time when the

President and Congress are considering ways to expand drug coverage for seniors seems contradictory.’’ He has other things to say

about that. They will be placed in the record.

Don’t you agree that this program memorandum of August, 1997,

has created this unacceptable problem?

Mr. HASH. Mr. Bryant, with all due respect, I do not agree. I believe that the intention of the August 13, 1997 memorandum to our

regional offices was a restatement and clarification of our longstanding policy, and further, that it provided in fact some small expansion of our coverage with respect to the teaching of individuals

who were commencing self-injectable drug therapy.

Mr. BRYANT. In terms of what you believe and what actually

happened, I think the reality is evidenced by letters from our chairVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
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man and the Senators’ letters, that this PM had the effect of substantially restricting, as opposed to expanding.

Mr. HASH. Mr. Bryant, I know that the Administrator met on

several occasions with representatives of the company that manufactures Avonex, the drug that you referred to in those letters, and

that we sought diligently to find a way as to whether or not it

could be covered under our drug policy, consistent with the law and

our longstanding policy.

We were unable to do so. That is one of the experiences that led

us to the decision to commence a rulemaking process to try to put

out some additional options about how this might be handled, given

the statutory limitations regarding self-administratable drugs.

Mr. BRYANT. We appreciate that. But I think the bottom line, the

net effect, is that the folks that were able to take this and be reimbursed before 1997 no longer have that, as well as others. I think

that is what we are here about.

The fiscal year 2000 appropriations bill prohibited HCFA from

implementing any such policy that would have imposed new restrictions. I want to stress the word, we did not prevent you from

expanding; we simply, in that bill, opposed new restrictions of

Medicare coverage of injectable drugs.

The report language accompanying this provision directed HCFA

to issue a program memorandum to all carriers clarifying this policy. It is my understanding that you issued—the one you issued on

March 17, which was, I guess, Friday—that you did finally issue

one.

Mr. HASH. Yes, sir.

Mr. BRYANT. We appreciate that.

Again, I, like a lot of people—we can point fingers all we want

to, but we really need to get to the bottom of this. Certainly, I

think the cause of the problem has been back with this August

1997 memorandum that was issued. I suppose it is up to us to now

correct it. I think we thought we had corrected it, but it is slower

than we expected.

Let me ask you one other question about I guess the broader

scope of this on the issue I raised in my opening statement about

the expense, the anticipated higher expenses for these new drugs.

As I understand it, the President’s drug benefit proposal, when

fully phased in, would provide only $2,500 in total Federal drug assistance to each senior each year. Would this be enough to cover

a year’s worth of disease treatments within general therapies? I

don’t think it would, but I would like your opinion. If you agree

with me that it would not, would such a proposal then represent

a reduction in Medicare coverage of many of the lifesaving drugs

on which our ailing senior citizens rely?

Mr. HASH. One of the reasons that this year the President in his

Medicare reform proposal modified the drug proposal that was released last summer was to include the recommendation of setting

aside coverage for catastrophic costs above the $5,000 cap that was

in the original proposal.

As you may know, there is a $35 billion set-aside that would be

dedicated to providing increased coverage for individuals who have

higher drug costs, because we, like you, recognize that some of

these therapies, are extraordinarily expensive and need to be covVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
20

ered. That is the purpose of that extra provision in the President’s

proposal.

Mr. BRYANT. Again, as I originally stated, it would not have

helped. In actuality, it would have probably hurt seniors in terms

of trying to use this new medication. I know we added money later,

and only recently have we seen language in a bill.

Mr. BILIRAKIS. The gentleman’s time has expired, but please respond to that.

Mr. HASH. The other thing I wanted to say, Mr. Bryant, is I don’t

believe it would have harmed beneficiaries. One of the benefits of

the President’s original proposal was to make available to all Medicare beneficiaries the discounts that would be experienced as a result of relying on pharmacy benefit managers. That would continue, regardless of the caps on the coverage. It is estimated that

those discounts would result in a 12.5 percent, on average, discount

from current prices.

So it is clear that even without the catastrophic benefit, there

would have been some important financial benefits to beneficiaries

from having access to discounted drug prices.

Mr. BRYANT. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Mrs. Capps?

Mrs. CAPPS. Thank you.

Mr. Hash, thank you for your testimony. If I could talk with you

or if you could talk with us about the legislative changes or

changes in general necessary to have the Medicare program cover

self-injected drugs or biologics, does HCFA have the authority to do

this, by your own decisions, administratively? What parts can you

take care of and what parts need to be legislatively covered?

Mr. HASH. Mrs. Capps, the reason we were moving down the

road toward a regulation is that there are some interpretations of

existing statutory language that might have allowed some expansion with respect to coverage of self-administered drugs. That is

why we wanted to put out some options to get public comment on

and to assess that.

The reality, though, is the limitation is still or would still, even

with options that might be available, be a piecemeal response to a

much broader problem, as you recognized in your opening statement. That is why, of course, we are strongly supporting a broader

outpatient prescription drug benefit. But we did want to explore

some possibilities.

I should also say that in thinking about options to expand coverage for self-administrable drugs, a host of ethical issues come up;

for example, where to draw the lines with regard to capability for

self-administration, not just with injectables, but when you consider we have such a significant population of beneficiaries with dementia or Alzheimer’s who may not be able to know and follow a

pill regimen, which is clearly, by anyone’s definition, a self-administrable drug, but on the other hand, is that someplace that the

statute would allow us to go?

More importantly, as I mentioned in my opening statement, some

of our own clinicians at HCFA are worried about the ethical dilemmas that would be posed for a health care professional who is

treating a patient who clearly cannot—who clearly can self-administer, is capable of doing so, but cannot afford the drug.

21

Mrs. CAPPS. Yes. This is exactly the real world that our constituents and the people who are affected by this whole arena—this is

where they live. These are ethical decisions they are making every

day.

So I want to acknowledge that I commend the administration for

entering into this world. I understand there are pitfalls. I guess in

the same conversation, if we could discuss, then—and I don’t want

you to have to declare one way or the other about the particular

bill that I referenced—access to Innovation for Medicare Patients

Act of 1999.

Given, though, that it would provide coverage to biologicals that

would be used in lieu of already covered products, is there some

precedent for that kind of change? Is this the direction that legislation would be useful for your administration?

Mr. HASH. Legislation would, I think, be useful. I have not had

a chance to review your bill in detail, but I think—I know you are

trying to address the problem of access here, and I think we want

to work with you on that.

I think the other part of this is, in the coverage of drugs, absent

a more comprehensive approach, we need to be concerned about the

payment policies. Under current law, the program is required to

pay a set amount that is 95 percent of the price that virtually no

one pays for drugs in this country today.

So when you are thinking about crafting legislative solutions

that involve more expansive coverage of self-administered drugs, I

would recommend that Congress consider the pricing strategy, a

pricing strategy for such an expansion. Because at the present

time, we have very little leverage with respect to purchasing at a

price that is reasonable, given the purchasing power that Medicare

would otherwise have.

Mrs. CAPPS. I know I don’t have much more time, but just finishing up, you said something about—in your forums, that you

have had meetings with people. Have you gotten the kind of feedback that would give you a set of boundaries?

Mr. HASH. Actually we have not had those meetings yet. The conference report on the appropriations bill requested or directed that

we hold at least two town hall meetings, and to invite stakeholders

to talk about a possible model for expanding the coverage of selfadministered drugs.

The first one is scheduled in Baltimore for May 18.

Mr. BILIRAKIS. Is there a second one scheduled?

Mr. HASH. Not yet, Mr. Chairman.

Mr. BILIRAKIS. I’m sorry. Please proceed.

Mrs. CAPPS. I yield back the rest of my time.

Mr. BILIRAKIS. Mr. Burr, to inquire.

Mr. BURR. Thank you, Mr. Chairman. My apologies for my tardiness.

Mike, it is good to see you.

Mr. HASH. Thank you, Mr. Burr.

Mr. BURR. Let me go to a couple of areas, if I can. If what I am

told is true, I am gratified to hear you say that HCFA never intended to reduce Medicare coverage of injectable drugs, but I have

to tell you that I am confused. If that is the case, why was a provision stuck in the very last page of the President’s budget proposal

22

for HHS that would have repealed the action just taken which prohibited such a cut?

Mr. HASH. Mr. Burr, what we typically do when we send up the

President’s budget, in response to provisions that were added to an

annual appropriations bill, is to make recommendations to the Congress regarding those appropriation riders.

In this case, that recommendation on the President’s behalf recognizes that what we would like to do is to do what we were in

the progress of doing when the appropriations rider passed. That

is, we would like to return to the rulemaking process, where we

were prepared to lay out a series of scenarios to get public comment on for possible expansions of the coverage of self-administered drugs.

Mr. BURR. You said in your statement, and I will refer to your

testimony a couple of times, you suggested HCFA cannot create an

exception for patients who are unable to self-administer the drugs

they need because Congress has not provided you, HCFA, explicit

authority to do so. I will refer to page one of your testimony, the

third paragraph, the last sentence, ‘‘And Congress has not provided

an explicit exception for those who cannot self-administer drugs

that generally are self-administered.’’

I guess you are telling us there that HCFA does not have policymaking authority, except when explicitly specified by legislation by

Congress, is that right?

Mr. HASH. No, sir. In a number of cases the law is subject to interpretation, and there is administrative discretion associated with

provisions in the law.

Mr. BURR. Okay. I am further confused, then.

Mr. HASH. Let me give you an example of how we, I think, got

to where we are, if I may.

Back in 1990, I think it was OBRA 1990, the Congress passed

in the Medicare statute a provision relating to the coverage of a

drug that was used for women, postmenopausal women who had

fractures related to osteoporosis. The drug, I believe, is called

Calcetonin.

In the statutory language that is associated with that coverage,

Congress went to great lengths to describe the fact that you needed

to cover these injections by taking into account either the mental

or physical capacity of the individual to administer that drug.

I think what that—the inference one takes from that is, but for

that language in the statute, that drug would have been subject—

as I think members knew at the time that matter was being considered, that drug would have been subject to the exclusion of the

self-administered drugs.

But the fact that Congress specifically in the statute said, in covering this drug for fractures by women who have osteoporosis, you

should take into account whether the individual beneficiary either

mentally or physically has the capacity to self-administer this

drug——

Mr. BURR. So only when there is a congressional reference to a

specific area does HCFA feel that they have the authority to in fact

propose a new rule?

23

Mr. HASH. Not only, but in this case of self-administered drugs,

the Congress—the Calcetonin is but one example. Congress carved

out a specific exception related to oral cancer drugs.

Mr. BURR. Whose interpretation of what Congress wrote are you

referring to, Congress’, HCFA’s, or some third party?

Mr. HASH. I’m sorry, I don’t know if I understand this.

Mr. BURR. The legislation, and I hate to be specific, but we have

had those instances in the past, you and I know, where our interpretation or intent, our language, was interpreted in a totally different way. I am just trying to find out what the basis is.

Is it exactly what we say?

Mr. HASH. If the plain reading of the language of the statute

leads to a reasonable conclusion, then I think the people who are

executing the laws have no choice but to follow the plain reading

of the statute.

If the plain reading of the statute leads to some alternative possibilities, rational possibilities, then I think one turns to the legislative history, to look at the conference reports, to look at the committee reports, to see if there was amplification of the provision

that was included in the statute.

That is kind of the tree of logic I think that is applied to determine whether administration discretion resides.

Mr. BURR. If we added report language to a bill that suggested

the scope of where HCFA had authority to propose rules, you would

see that as congressional intent to allow you to make rulemaking?

Mr. HASH. I would definitely see anything in the committee report or conference report as an expression of congressional intent.

I want to quickly add, if there is a conflict between the plain reading of the statute and the legislative history, the plain reading of

the statute would be the guide we would follow.

Mr. BILIRAKIS. Would the gentleman yield? His time has expired.

Mr. BURR. I would happy to yield if the chairman would allow

me one last follow-up question. But he can certainly go first.

Mr. BILIRAKIS. All right. Just to follow up on your questioning,

pre-August 1997, the policy of paying for injectable drugs and

biologicals was based on the usual method of administration, which

the carriers used in making their coverage decision until that date.

What possessed HCFA to come up with a program memorandum

in August 1997 in effect clearly changing that? Mr. Kennedy in his

letter basically says stopping payment, and I’m not going to be that

drastic, but in effect, changing the policy by adding in the phrase

‘‘The individual patient’s mental or physical ability to administer

any drug is not a consideration for this purpose?’’ .

I’m sure we all would like to know, why HCFA would do that?

It came out of the woodwork, did it not?

Mr. HASH. I believe it is a reflection, Mr. Chairman—and I was

not there in 1997, as you know—but I believe and I have been informed that the reason for the issuance of that memorandum was,

as we have been talking about here this morning, there have been

a lot of advancements in drug administration, including many

drugs that started out as intravenous or intramuscular drugs that

had moved into the arena of subcutaneous or self-administered

drugs. There has been an evolution. Many questions were raised.

24

The purpose of the memorandum to our regional offices was to

help respond to a series of questions about the clarification of our

policy on self-administered drugs. It was not intended, and I want

to say this in the strongest terms, it was never intended to restrict

coverage.

In fact, as I have said several times this morning, it modestly expands coverage.

Mr. BILIRAKIS. Not according to the letter signed by Mr. Kennedy.

Without objection, the gentleman’s time is extended for an additional 30 seconds.

Mr. BURR. I appreciate the extension, Mr. Chairman. I just want

to make sure that we are clear.

HCFA’s understanding is that if they cannot point to an area of

legislation or report language that allows HCFA to propose a rule,

than you don’t have the authority to do it? If there is not legislation that leads one to see that the Congress wanted you to have

some flexibility, wanted you to be involved in rulemaking, then you

have none?

Mr. HASH. No, sir, I wouldn’t say that. I think each case has to

be judged—whatever we might be talking about specifically needs

to be judged specifically.

Mr. BURR. Based on what?

Mr. HASH. Generally speaking, regulations are rooted in the statute. Regulations are to follow the statutory provisions.

Mr. BURR. Clearly you said there must be some tie to what Congress wrote that allows you the authority. If not, you don’t have the

authority?

Mr. HASH. I think we have the authority to write regulations.

The substance of those regulations is covered by what is in the law,

what is in the legislative history surrounding it.

Mr. BURR. My biggest concern is that we cannot have it both

ways. We need to get an understanding.

I would only make this statement, Mr. Chairman, that as we talk

about comprehensive drug coverage for seniors, if we have this

much trouble understanding self-injectables, I hope every member

will take that into consideration as we look at HCFA as a component of an overall comprehensive drug plan, and certainly make

sure that it is part of their decisionmaking process.

I thank Mr. Hash. Mr. BILIRAKIS. Mr. Barrett?

Mr. BARRETT. Thank you, Mr. Chairman. Just to follow up on

that in just a very generic sense, how would a comprehensive drug

benefit change the way the current benefit works?

Mr. HASH. I believe, at least speaking of the President’s comprehensive drug benefit, the coverage of drugs that are now covered either in a hospital or a nursing facility or covered as incident

to a physician’s service, which is what is covered now, that coverage would remain intact.

What the comprehensive new drug benefit would cover is all of

the non-covered, in effect self-administered, outpatient drugs which

are currently not covered under the Medicare statute.

Mr. BARRETT. Would you consider that a more equitable fashion

to deal with this?

25

Mr. HASH. Absolutely. You were not here earlier, but what I was

trying to say earlier was that while all of us would like to be dealing with the problems of self-administered drugs that we are here

to talk about this morning, it does represent sort of a patchwork

approach to this problem.

I think the reality for all of us is the most appropriate way of

dealing with these problems is through a comprehensive outpatient

drug benefit.

Mr. BARRETT. I am confused by some of the discrepancies, and

I feel them floating around the room, too. We are talking about

self-injected drugs, and the pharmaceutical companies want those

covered by Medicare?

Mr. HASH. Definitely.

Mr. BARRETT. These are the same pharmaceutical companies

that run these Flo commercials that say we don’t want government

in our medicine cabinets?

Mr. HASH. I think you see some inconsistencies.

Mr. BARRETT. The other concern I have with the self-injected,

would we be creating some sort of market incentive to create these

drugs as self-injectable drugs if they are not already so they could

be covered by Medicare?

Mr. HASH. Yes, sir. I think your point is well taken. We don’t

want to have a public policy that influences the form in which

drugs are manufactured. What ought to be influencing the form in

which drugs are manufactured and made available to beneficiaries

or to the American people ought to be on the basis of the form that

works best for the drug itself, not on the question of whether it

could be self-administered or administered through intravenous applications or not.

That is what should not determine it. What should determine it

is what form of administration will make the drug work most effectively for the patient.

Mr. BARRETT. Okay. I yield back the balance of my time, Mr.

Chairman.

Mr. BILIRAKIS. I thank the gentleman.

Mr. Pickering, the gentleman from Mississippi, to inquire.

Mr. PICKERING. Thank you, Mr. Chairman. I apologize for being

late. If I go over some ground that has already been covered, please

excuse me.

I am concerned, just the little bit that I have heard, that we are

losing our focus of what today is about. That is simply, what is the

status of self-injectables and HCFA’s policy toward that, and then

consequently, is that resulting in the denial of such benefits to

Medicare recipients?

I would like to keep or regain our focus. We are all, on this committee, supportive of trying to find a way on the broader issue of

prescription drug benefits, but that is not what this hearing is

about. So let us keep our focus as we go forward.

Let me ask Mr. Hash, the program memorandum that came out

in 1997, as a result of that, did it create a situation where the private market insurers began denying coverage for drugs and

biologicals that they covered prior to 1997?

26

Mr. HASH. When you say private market insurers, do you mean

private health plans and policies or do you mean the Medicare program?

Mr. PICKERING. Both. Both the Medicare carriers, as well as

health insurers in the private market.

Mr. HASH. In general?

Mr. PICKERING. Yes.

Mr. HASH. I don’t know about the policies of private insurers, so

I am not prepared to answer that question. I would be happy to

get you an answer if we have any data on that.

With respect to the Medicare program, as I said earlier, the August 13, 1997, memorandum we sent to our regional offices was intended to clarify our longstanding policy, and it actually provided

a slight expansion of that policy to cover the instruction of individuals who were commencing a program of self-administration of

drugs.

That is what was—and by the removal or suspension of that August 13 memorandum of 1997, the carriers who administer this

program for us are to follow the carrier manual, which was last updated in 1995, and basically restates Medicare’s longstanding position on the noncoverage of drugs that can be self-administered.

Mr. PICKERING. In practical terms, does that mean that the practice prior to 1997 of physicians being able to prescribe selfinjectables was discontinued at that point by your carriers?

Mr. HASH. We have never had a policy of covering self-administered drugs.

Mr. PICKERING. But the practice—let us separate policy and practice, pre and post. The practice before was I think commonly used

that we would have self-injectables——

Mr. HASH. I think the practice in reality varied quite widely, because carrier medical directors who actually oversee the application

of the carrier manual instructions have some discretion to apply

the findings in the manual to the real life claims that they get.

The manual actually says that drugs that can be self-administered in the form that they are usually provided cannot be covered.

If the drug is generally administered by a physician in their office

or in their clinic, and that is the form in which it is generally administered, then it would be covered under the Medicare program,

and has been since the inception of the program.

Mr. PICKERING. Again, if I can, staying away from the manuals

and the policy and just going back to the practice, pre-1997, you

say the practice had disparities. In some cases that was followed

and in some cases, maybe not?

Mr. HASH. I believe that to be the case.

Mr. PICKERING. Post-1997, did the policy memorandum, programmatic memorandum, have the effect of discontinuing that

practice altogether?

Mr. HASH. I don’t know that for a fact. I think it clearly has had

some effects, because you and others and we are aware that it has

had some effect. But what it was doing was restating the longstanding policy of Medicare.

If carrier medical directors had not been paying attention to that

and saw the August 13 memorandum, then presumably they would

27

want to make sure that their decisions were consistent with the

guidance that we had provided them.

Mr. PICKERING. Just for clarity, I will try to restate what I believe you just said. That is, after the memorandum in 1997, the

practice discontinued?

Mr. HASH. No, sir, I did not say that. I said it varied before and

after.

Mr. PICKERING. So it still varies before and after?

Mr. HASH. Yes, sir.

Mr. PICKERING. If the practice varies with your policy, what do

you want to see? What is the practice that you want to see by your

carriers?

Mr. HASH. What we have been trying to do before the appropriations language passed last year was to engage in a rulemaking

process to put out a series of options that we thought would be consonant with the statute as it exists now in order to explore ways

of expanding coverage. That is the direction we were headed.

Mr. PICKERING. Mr. Hash, if we can stay away from memorandums and statutes and all the gobbledegook, what practice do you

want to see by your Medicare carriers for those who could benefit

from self-injectables?

Mr. BILIRAKIS. The gentleman’s time has expired, but you may

proceed.

Mr. HASH. The practice we would like to see is to put out a rule

to solicit comments with regard to options we think are consistent

with the statute. We, like you, are just as frustrated with the limitations of the statute, particularly for people who suffer from the

serious diseases like multiple sclerosis, and who in fact cannot

physically self-inject.

There is no one who is disagreeing over the need to address that

problem. That is something we want to do, just as much as you

want to do it. We would like to work with you toward that end.

Mr. PICKERING. Mr. Chairman, can I just try one more time?

Mr. BILIRAKIS. Only if there is no objection to that effect.

Mr. BROWN. Mr. Chairman, I won’t object, but there has sort of

been a trend in this hearing that the majority goes over with one

or two more questions and continues this.

Mr. BILIRAKIS. They have more questions.

Mr. BROWN. Perhaps they do have more questions, but I also understand that HCFA’s administrative budget has been cut, HCFA

does not have the power to hire and fire carriers, and I am not sure

this is really a fair kind of approach that has been taken.

I certainly don’t mind Chip continuing his questions, but I just

think if people on our side want to go over the same way——

Mr. BILIRAKIS. Keep it short if there is no objection, please.

Mr. BROWN. I have no objection.

Mr. PICKERING. I just want to understand Mr. Hash’s position

and HCFA’s position.

In practice, do you want to see those capable and those who pre1997 were able to self-administer these drugs, which that did provide, from all accounts, a benefit to people, and as we talk about

the broader issue of prescription drugs—we are trying to help people as they receive treatment to have that option—do you now

want to see self-injectables through Medicare practiced?

28

Are you saying that you are limited and cannot do that?

Mr. HASH. What we said is we would like to expand in this area

to the fullest extent of the law. We believe in order to do that we

need to publish a rule.

Mr. PICKERING. Thank you, Mr. Chairman.

Mr. BILIRAKIS. It still goes back to statute. There is no change

in the statute. The statute was in existence prior to August 1997.

It was done a certain way. The program memorandum came out of

the woodwork in August 1997 changing things.

Mr. Deutsch, to inquire.

Mr. DEUTSCH. Thank you, Mr. Chairman.

Mr. Hash, Ms. Story, who is on the second panel, notes in her

testimony that Medicare would just cover the cancer drugs to prevent countless inpatient hospitalizations and infection and would

reduce morbidity and mortality for people who currently cannot get

them.

Does it not seem to you that this statement is true for coverage

of all drugs? If Medicare provided a comprehensive drug benefit, do

you not think we would do a lot more to reduce morbidity and mortality, promote health, prevent hospitalizations and make improvements in medical outcomes?

Mr. HASH. Absolutely, Mr. Deutsch.

Mr. DEUTSCH. I guess the emphasis on this side really has continually been that there is no question that the situation now is a

horrendous situation, but is there anything really to point out the

unique nature of the drugs that we are dealing with, these

injectables, versus drugs across-the-board?

Mr. HASH. I think anyone who cannot get access to drugs that

are lifesaving or life enhancing is in a situation that we should be

remedying. That is the whole point of this effort to get a prescription drug benefit for Medicare. Whether it is an injectable drug or

an oral drug or an IV drug, Medicare beneficiaries ought to be covered for outpatient drugs or inpatient drugs, for that matter. Drugs

are key to managing and improving the health of our beneficiaries.

Mr. DEUTSCH. Right. I guess that is really where the emphasis

is. I appreciate the fact that we are having this hearing, but I

think the hearing emphasis really is about lack of access of prescription drugs.

Again, in some ways we are highlighting the situation, this

anomaly that exists today really enforces that highlight and makes

it clearer in terms of the situation that occurs.

Can we maybe talk a little bit about the actual dollar savings

that either we have been able to come up with or drug companies

can come up with in terms of savings that would occur if these

drugs were available?

Mr. HASH. I think there is a lot of literature on certain drugs and

what occurs as a result of their availability in terms of reduced

need for hospitalization, reduced need for other kinds of services

that would be required if the person did not have access to the

drug.

I don’t have the data right here handy, but I think drug companies themselves frequently, when they are introducing a drug to

the market, have done some research about its effect on the utilization of other services if the drug is made available.

29

Mr. DEUTSCH. Again, there are different studies I know both of

us have seen. There is at least an argument that could be made

with empirical data to support that in fact there is a positive savings in terms of providing this type of coverage?

Mr. HASH. I believe for many drugs that is the case, Mr.

Deutsch.

Mr. DEUTSCH. I have just a follow-up regarding that question.

When Medicare was instituted, can we have just both a ballpark

and an empirical data sense—a way to quantify the dramatic increase prescription drugs have taken as part of the health care delivery system in America from when Medicare was instituted?

Mr. HASH. I don’t have any exact figures for you, but I would be

happy to try to quantify the sales of drugs in 1965 versus today.

Obviously, we all know, without knowing what the exact figures

are, there has been a quantum change in that, no question about

it.

Maybe another way of looking at it and answering your question

is to say the failure of the Medicare program to have included prescription drugs in 1965 more than anything else suggests that it

was not viewed as a significant part of the health care armamentarium of that period, because nobody would think about designing

Medicare today from the ground up and leave out outpatient prescription drugs.

Mr. DEUTSCH. Which again I think is tied into the fact of what

percentage of out-of-pocket costs are spent today by Medicare beneficiaries versus 1965 for prescription drugs.

Mr. HASH. Right. There are huge differences. In fact, even today,

and one of your later panelists, Dr. Steinberg—I happened to review his testimony—he recently published an article in Health Affairs that shows pretty dramatically what the costs of drugs are for

the Medicare population.

There are other articles that have recently come out showing

that people without drug coverage actually pay more out of pocket

for drugs, not surprisingly, but they get fewer prescriptions because

they are unable to afford them.

So there is a real consequence with the absence of drug coverage

in terms of both costs to beneficiaries and lack of access.

Mr. DEUTSCH. I want to give you a chance to answer this question, because I know this has come up, as well.

It is my understanding that the President’s original prescription

drug proposal would not have provided catastrophic coverage, and

thus would not have provided any help for the people who need

these expensive injectable drugs.

But the proposal in this year’s budget does include a catastrophic

element which would help with costs of these drugs. Could you

comment on this?

Mr. HASH. Yes, sir. I said two things earlier. One is that obviously the President’s proposal includes a set-aside of $35 billion for

that purpose. That is in recognition of the need to provide this—

what we now believe would be about 10 percent of the Medicare

population by 2009 who would need more than $5,000 a year in

drug expenditures.

The other point I made earlier was the fact that even under the

original proposal, when the cap was reached, Medicare beneVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
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ficiaries would continue to enjoy the discounts that were made

available to them through the contracting with pharmacy benefit

managers above and beyond.

Those savings on an average basis were estimated at about 12.5

percent off the retail prices, which for Medicare beneficiaries

means Medicare beneficiaries pay the very highest prices today for

drugs of any other citizens in the United States.

Mr. BILIRAKIS. The gentleman’s time has expired.

Mr. Bilbray, to inquire.

Mr. BILBRAY. Thank you, Mr. Chairman. I want to sort of just

follow up on what my colleague, the gentleman from Florida, was

taking about.

We have had hearing after hearing about the issue on this challenge of the cost effectiveness of providing prescription drugs and

different types of treatments that may not be available now. In

Southern California we have some great programs. In fact, AARP

has finally said that they would agree with co-pays and a lot of

other stuff, so that is not the issue here.

I am sort of just flashing back to my days of administering

health programs for $2.8 million. I have an administrator in front

of me that tells me that there was no intention of reducing services

or eliminating certain medication to the clientele, quote-unquote.

My question is, why was the memorandum—why was the restriction at not reducing those services eliminated if there was not some

kind of intention of reducing those services?

Mr. HASH. As I said before, Mr. Bilbray, what we were doing

there, as I understand it, is as drugs have moved from the category

of injectable through IV and intramuscular into individual self-administered drugs, subcutaneous injections and so forth, we have

had a series of questions that have come up to our carrier medical

directors and to the HCFA as well, and as a result of that, periodically what we do when we encounter those kinds of questions is we

put out any clarifying and, if possible, any expanding information

we can so that we can properly administer the benefit.

Mr. BILBRAY. Are you saying that in Mr. Deutsch’s State, for

every product that was dropped, there was a comparable treatment

that was exactly the type of program that a physician could be able

to choose as an alternative to that program that had been reduced?

Mr. HASH. No, sir, I am not saying that.

Mr. BILBRAY. When you say that the technology moved away

from a product, it means it moved to something.

Mr. HASH. Yes, sir.

Mr. BILBRAY. If it moved to something, my question was, did it

move to a comparable treatment that basically made the original

treatment obsolete? They had a better, different mousetrap, but it

was still catching the same mouse?

Mr. HASH. That is possible, yes, sir.

Mr. BILBRAY. My question is, the way you are saying it is that

it did it every time. I don’t have that data that it did it every time.

Mr. HASH. No, sir, I didn’t mean to imply that. I misspoke.

Mr. BILBRAY. So there was an abandonment of historical service,

then?

Mr. HASH. No, sir.

31

Mr. BILBRAY. Either you covered every base with the new technology, or you abandoned one base, or some bases were left out.

You cannot say I didn’t cover every base, but I

didn’t—but there wasn’t any uncovered bases out there. It is conflicting testimony.

Mr. HASH. Let me try, if I may, to sort this out.

Historically, the Medicare policy for the coverage of outpatient

drugs is limited to drugs that cannot be self-administered. Earlier

on, most drugs that fell into this category were drugs that were administered under the supervision of a physician or a health care

professional, usually intravenously or intramuscularly.

Now these products have either evolved, or in some cases they

are brand new products that never have been administered that

way, that are administered through subcutaneous injections.

The way we have interpreted the statute historically, all the way

up until now, has been that if a drug in its usual form to the patient was capable of being self-administered, then it was excluded

under the Medicare statute as a self-administered drug.

Mr. BILBRAY. Even if it had been used—even though it had been

covered in the past?

Mr. HASH. It could continue to be both, because in some cases

the proper form, because of the patient’s condition, would be to administer some drugs intravenously, even though there is a form of

it that can be administered subcutaneously. The difference is the

condition of the patient, where the drug will actually work best.

Let me give an example.

Mr. BILBRAY. I have to stop you a second. I just cannot believe

that an administrator at your level—the detail you are talking

about making these calls, that making those calls in between a

physician and their patient—I mean, the challenge is there, and I

can imagine trying to do it at county level, but trying to do it at

national level—do you really believe that that is practical?

Mr. HASH. Those are not the decisions that I make. If it sounds

like I am making them, then I have misspoken again.

It’s our contractors who administer the Medicare program, in

this case, the carriers who administer Part B, there are medical directors who actually make the kinds of judgments that I was just

talking about. That is why there is discretion at the contractor

level within the guidance that we have given them.

That is why in some cases if the label from the FDA indicates

that a drug can be administered intravenously, and it describes a

set of patient characteristics where, for that kind of a patient, this

drug will only work effectively if it is administered intravenously,

and for other kinds of patients with different diseases or different

conditions the label may say this can be self-administered through

a subcutaneous injection, those are the kinds of decisions that come

before the carrier medical directors. There are 22 of them around

the country. They make those kinds of decisions.

Mr. BILBRAY. This is a classic——

Mr. BILIRAKIS. The gentleman’s time has expired.

Mr. Strickland.

Mr. STRICKLAND. Mr. Hash, do you think that medical policy

should rest in the hands of the Members of the House of RepVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
32

resentatives and the Members of the Senate, rather than in the

staff at HCFA?

Mr. HASH. I think Congress has certainly plenty of prerogatives

to establish policies, including medical policies, in the context of a

program like Medicare. They do sometimes. Other times they leave

those decisions to the marketplace or in fact to clinicians to make

those decisions.

Mr. STRICKLAND. In all due respect to you, my experience with

HCFA has been that oftentimes there seem to be individuals there

who think they know better than those of us who have been elected

by the people. That is one of the things that troubles me about this

agency.

Having said that, I have a couple of questions. In your judgment,

are there people who have very, very serious health conditions who

still will not get the needed drugs, even after the August 1997 policy changes?

I would like for you, if you could, to think of this. Are there examples of the kinds of illnesses or costs of drugs that still are not

covered; for example, the so-called triple cocktail that is used for

individuals with HIV-AIDS—isn’t this medication very expensive,

and is it not administered orally? I would like your response,

please.

Mr. HASH. That is my understanding, Mr. Strickland. It would

not be covered.

Mr. STRICKLAND. It is very expensive, is it not?

Mr. HASH. Yes, I understand. Maybe as high as $20,000 to

$30,000 a year for an individual.

Mr. STRICKLAND. Is this drug ever covered under Medicare?

Mr. HASH. No, sir, not in the outpatient setting.

Mr. STRICKLAND. My point is this: Would you not say that it

would make more sense for us to have a policy that covers all prescriptions that people need, rather than to pick and choose among

illnesses, among degrees of illnesses, among drugs, and among the

way drugs are administered?

Would it not make sense for us, as compassionate people, just to

have a comprehensive prescription benefit that would leave no one

out?

Mr. HASH. Absolutely. I agree with that.

Mr. BURR. Would the gentleman yield for one question?

Mr. STRICKLAND. I would, quickly, please. I don’t have much

time.

Mr. BURR. At the heart of the example that Mr. Strickland used,

in HCFA’s mind, would the extension of that benefit for HCFA, the

triple cocktail, actually be a net savings to the health care system

because we have eliminated the hospitalization that that individual

would have utilized if they had the opportunity for the prescription

drug?

Mr. HASH. I think it would. I think there is no argument.

In fact, we have just launched a demonstration to that effect, to

demonstrate that effect in the Medicaid program in the State of

Maine where we are covering individuals who are HIV positive, not

yet symptomatic, for these drugs in order to slow or retard the progression of the disease to show that that kind of early coverage for

33

people who otherwise would not have been covered shows benefits

in terms of cost savings.

Mr. BURR. It is not the case in every case, but it is certainly

something we should consider.

Mr. STRICKLAND. I thank my colleague for that very helpful observation. Thank you.

Mr. Hash, the second question. The second panel is going to be

talking about drugs that are very costly, in some cases. Do you

have any knowledge of who is experiencing hardship in accessing

these drugs? Is it just the low-income, or are people who are of

modest income also having difficulty affording these expensive

drugs?

Mr. HASH. The problem of the cost of drugs for the low-income

is a very serious problem, but it is not limited to low-income people. Over half of the people without any coverage under Medicare

for drugs who have incomes above 150 percent of the poverty

level—there are over half of them who do not have any coverage

for drugs. For them the costs are very significant.

Across incomes, income spectrums, the cost of drugs are very serious problems for Medicare beneficiaries.

Mr. STRICKLAND. So a program tailored only for low-income people would leave out a host of others who would be unable to afford

these medications, perhaps?

Mr. HASH. It would definitely do that.

Mr. STRICKLAND. Thank you very much.

Thank you, Mr. Chairman.

Mr. BILIRAKIS. I thank the gentleman.

Mr. Lazio, would you like to inquire?

Mr. LAZIO. Thank you, Mr. Chairman.

Mr. Chairman, I just note, Mr. Hash—thank you very much for

being here, but I also want to note the bipartisan—almost universal concern about where HCFA is right now, and the people that

are left behind.

I do a lot of work, as many people do in this committee, with the

cancer community. I know they are acutely sensitive to the fact

that this change is expected to have a detrimental effect on people

that desperately need self-injected prescriptions.

I just want to try and follow up, if I can, for a moment, because

I am struggling to understand exactly how this change came to be,

as well, on where Mr. Bilbray left off.

I am reading, and I will be happy to provide you with a copy,

if you would like, and it is probably fair for me to do that.

‘‘Standard policy for 35 years.’’ Section 2049 says in part,

‘‘Where, however, a physician injects a drug which is not usually

self-injected, this drug is not subject to the self-administrable drug

exclusion, regardless of whether the drug may also be available in

oral forms, since it is not self-administrable in the form in which

it was furnished to the patient.’’

But in a letter dated July 1 of last year from Nancy-Ann

DeParle, and I want to quote from that, she says, ‘‘Medicare covers

only those Food and Drug Administration approved drugs that are

furnished incident to a physician’s services and cannot be administered,’’ as opposed to ‘‘not usually be self-administered.’’

34

‘‘For example, as we discussed,’’ a certain thing ‘‘is not covered

by the program, even when it is necessary for the patient to have

the drug administered in a physician’s office. This is because the

drug can be self-administered’’.

I am just wondering if you can try and square for me how we

went from a standard policy that was in existence for so long to

this change. How you can square the discrepancy in these two directives?

Mr. HASH. There is an explanation to that. I will take another

stab at that.

I believe that what both the letter and the carrier manual site

for our longstanding policy are trying to say is that if in fact the

administration of a drug by a physician is appropriate because

there is a standard of practice, there is a medical protocol, that

says that in order for this drug to be effective it needs to be administered in a form that is supervised by a physician or someone

trained in the physician’s office, that is what I believe that statement in the record and this means.

That does not mean that if a drug also occurs in a pill form or

in a self-injectable form, that that would disqualify for that given

patient, because there is a medical need for the patient to be treated in that form in order to get the full benefit of the drug.

Mr. LAZIO. Isn’t this letter fairly categorical, fairly conclusive?

‘‘incident to a physician’s services and cannot be self-administered?’’ .

Mr. HASH. It is categorical in that sense. Also elsewhere in the

carrier manual it says the same thing. That letter actually is excerpting from another section of the same carrier manual language

that has been in there since the beginning of the program.

Mr. LAZIO. Let me, if I can, Mr. Chairman, introduce into the

record a letter dated May 23 from HHS.

Mr. BILIRAKIS. Without objection.

[The information referred to follows:]

DEPARTMENT OF HEALTH & HUMAN SERVICES

HEALTH CARE FINANCING ADMINISTRATION

OFFICE OF CLINICAL STANDARDS & QUALITY

May 23, 1998

Ms. ISABEL P. DUNST

Columbia Square

555 Thirteenth St. NW

Washington, D.C. 20004

DEAR MS. DUNST: I am writing as follow-up to your recent visit to discuss coverage of interferon beta-1a (trade name: Avonex) under the Medicare Program.

Thank you for taking the time to describe the use of Avonex in treating relapsing

forms of multiple sclerosis, and for bringing your perceptions of the issues involved

concerning Medicare’s coverage policy to our attention.

We have reviewed these issues and carefully evaluated the current policy on selfadministered drugs. Although we are cognizant of your concerns, and have taken

these into account in our evaluation and reconsideration, our position remains unchanged. That is, interferon beta-1a has been labeled as a drug capable of self-administration by the Food and Drug Administration (FDA) and this is common medical practice. As such, it is noncovered under the Medicare program, with very limited exceptions. As stated in previous communications, drugs that are self-administered are not covered by Medicare Part B unless the Social Security Act (the statute

that governs the Medicare program) specifically provides such coverage, for example,

in the case of immunosuppressive drugs. In those circumstances when certain drugs

that are generally self-administered may not be, coverage is at the discretion of the

Medicare Carrier. Thus, when the patient first learns how to administer a drug, the

35

carrier may determine whether it is medically necessary for the physician or staff

to administer the drug. The patient’s condition; i.e., the patient’s mental or physical

capacity to administer any drug, is not a consideration for coverage. The decision

is based on the appropriate medical protocol that applies generally to patients that

qualify for the drug in question. This Medicare policy reflects the statutory provision

that excludes self-administered drugs from coverage. Any modification to this policy

will require a statutory revision.

Thank you again for taking the time to meet with us and to explain your position

on the coverage of Avonex. I hope this clarifies the Medicare policy and the process

necessary to revise existing statutory requirements. If you have any questions,

please contact Dorothy Colbert, 410-786-9671, of my staff.

Sincerely,

GRANT BAGLEY, M.D., Director, Coverage and Analysis

Office of Clinical Standards and Quality

DEPARTMENT OF HEALTH & HUMAN SERVICES

HEALTH CARE FINANCING ADMINISTRATION

THE ADMINISTRATOR

July 1, 1999

Mr. MICHAEL J. ASTRUE

Vice President and General Counsel

Biogen

14 Cambridge Center

Cambridge, Massachusetts 02142

DEAR MR. ASTRUE: Thank you for your letter concerning the Medicare program’s

coverage policy for Avonex, which is used to treat patients with multiple sclerosis

(MS). I also wanted to say how much I appreciated meeting with you to discuss this

important topic. Since our meeting, we have spent substantial time carefully considering the issues you raised.

I understand that Avonex is generally not administered incident to a physician’s

services and that no Medicare benefit payment currently exists for these instances.

And, as our discussion reflected I fully appreciate the toll this debilitating disease

takes on its victims. It is enough of a burden to cope with the effects of the disease

without the worry of paying for an expensive drug like Avonex.

Unfortunately, we find ourselves in a dilemma. As you know, while the President

has proposed a prescription drug benefit under Medicare, there currently is no benefit. Payment for drugs provided in the inpatient setting is included within the appropriate diagnosis related group. However, for outpatient drugs, by law, Medicare

covers only those Food and Drug Administration approved drugs that are furnished

incident to a physician’s services and cannot be self-administered (with a few exceptions explicitly provided in the statute.

Historically, the Health Care Financing Administration (HCFA) has interpreted

this coverage restriction as pertaining to the characteristics of the drug itself and

not to the capacity of the particular beneficiary to self-administer any drug. For example, as we discussed, Betaseron (another drug used to treat MS) is not covered

by the program, even when it is necessary for the patient to have the drug administered in a physician’s office. This is because the drug can be self-administered. Another example is that eye drops used in connection with outpatient cataract surgery

are not covered by the program when they are administered in the outpatient hospital setting. While the situation you described for MS patients is very compelling,

these other situations are troublesome as well. Therefore, we are planning to publish a proposal in the Federal Register that will explore several alternative interpretations of this statutory provision. We will be soliciting public comments on those

alternatives and any other interpretations that are legally supportable. We look forward to your comments in response to that proposal. In the meantime, local carriers

will be able to make payment policy decisions concerning Avonex.

I want to again commend the Biogen company on its efforts to develop product

that are able to ameliorate the suffering MS patients must endure. I wish that my

response could have been more favorable.

Sincerely,

NANCY-ANN MIN DEPARLE

Administrator

Mr. LAZIO. I just want to follow up, if I can. Mr. Chairman, the

2000 fiscal year appropriations bill prohibited HCFA from implementing any policy, as you know, that would impose any new reVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
36

strictions on Medicare coverage on injectables, and report language

that accompanied the statutory language directed HCFA to issue a

program memorandum to all the carriers that are supposed to be

taking direction from HCFA.

I don’t know how they get direction based on the discrepancy between these documents. But HCFA issued the program memorandum on March 17. In the PM HCFA notes that this program

memorandum may be destroyed after September 30 of this year.

So you have indicated to the carriers that they can disregard

what is written in the program memorandum that was issued by

HCFA, and I would like to know if you can give us some sense of

what assurances you can give and therefore we can give to the patients that may be testifying at this hearing, people who are listening and looking for direction and are relying on this, that injectable

drugs that would be covered today would be covered, say, after October 1 when this memorandum is said to no longer be in effect.

Mr. HASH. I think the best way for me to answer that, Mr. Lazio,

is to say that in our view, the memorandum of August 13, 1997,

did not change existing longstanding Medicare policy.

Second, I would say that after the expiration of the appropriations provision that is in the law now, it would be our intention to

return to the activity that we had underway before the rider

passed, which was to put out a notice of proposed rulemaking

where we lay out a number of options that explore how we could

expand coverage of self-injectables under certain circumstances

that would be consistent with the law.

Mr. BILIRAKIS. The gentleman’s time has long expired.

Mr. LAZIO. Mr. Chairman, could I just ask the witness, I would

like to submit a couple of questions in writing, if I could.

Mr. BILIRAKIS. I think Mr. Hash is accustomed to that.

Mr. HASH. Yes, sir. I will be happy to.

Mr. BILIRAKIS. Let me ask you very quickly. You referred to having read Dr. Steinberg’s testimony.

Mr. HASH. Yes, sir.

Mr. BILIRAKIS. On page 4 of his testimony—and we really

thought that one of the other panel members would have asked you

this—in talking about the definitions he said, ‘‘I believe it is not

possible to develop a definition that makes sense from a clinical

perspective, other than leaving the judgment’’—and Mr. Lazio really went into this—’’other than leaving the judgment regarding the

best means of administering a drug to the patient’s physician.’’

Comment?

Mr. HASH. Yes, sir. I actually think that he is right about that,

in the sense that this ought to be a matter that ought to be subject

to physician judgment and application. That is why, under a broad

prescription drug benefit, that would be what would be the physician’s option in this case.

Mr. BILIRAKIS. But you have taken away their option of determining where an individual patient’s mental or physical ability to

administer any drug should be a consideration for this purpose?

Mr. HASH. As I said earlier, that was one of the issues that we

wanted to address in our proposed rulemaking to get comment on

that.

37

I said, Mr. Chairman, earlier that expanding this coverage is

fraught with lots of ethical challenges. There are issues about how

to draw the line here, what conditions to take into consideration.

There are clearly equity questions about people who fall inside the

line and people who fall outside of the line.

Our desire is not to have to make those kinds of decisions, but

rather, to have a broad policy that does not force us to parse it in

this way, and to do a sort of patchwork solution to what is really

a comprehensive problem.

Mr. BILIRAKIS. I know, you keep referring to broad Medicare reform. I am not belittling it, it is very significant.

When you plan to make a change, is it not best to leave things

be if they have been functioning all right, and then, if you are

going to go through the process of developing a new regulation, let

that determine when the change will be, rather than make the

change through a program memorandum, and then decide to go

through the process afterwards?

In the meantime an awful lot of people out there who have been

depending upon this service have lost it. It may turn out—as a result of your town meetings that were required and as a result of

the entire process, it may turn out that you will go back to what

it was for so many years before HCFA came out with its program

memorandum.

I am not really asking a question. I appreciate your patience, and

I appreciate you being here.

Mr. HASH. I appreciate the opportunity. I know there is confusion out there. I know this affects real people with very serious diseases and illnesses.

I am encouraged by your willingness to continue to work with us

and try to find a way to move forward with us; do what we can

do now and also work for the larger solution as well.

Mr. BILIRAKIS. That is right. We cannot say we want a comprehensive solution and let people basically suffer in the meantime.

Thank you very much, sir.

The next panel consists of Ms. Nancy Davenport-Ennis, Founding

Executive Director of the Patient Advocate Foundation out of Newport News, Virginia, Ms. Rosalie Lohrman from Pasadena, Maryland, Ms. Mary Ellen Rybicki from Reston, Virginia, Ms. Julie

Sizemore from Simpsonville, South Carolina, Dr. Earl Steinberg,

Chevy Chase, Maryland, and Ms. Jane Story of the Cancer Center

of the Carolinas in Greenville, South Carolina.

Thank you, ladies and gentlemen, for being here. We are grateful

for your patience.

Your written statement is made part of the record. We will set

the clock at 5 minutes, and hopefully you can keep your oral testimony within that period of time.

Mr. BURR [presiding]. The Chair would also like to take this opportunity to recognize our distinguished colleague who served for

over 100 years, Congressman Rose.

The Chair would recognize Mrs. Story for the purposes of her

opening testimony for 5 minutes, and also welcome both our South

Carolina witnesses from our sister State to the south of North

Carolina.

Ms. Story.

38

STATEMENTS OF JANE A. STORY; EARL P. STEINBERG; JULIE

SIZEMORE; MARIELLEN RYBICKI; ROSALIE LOHRMAN; AND

NANCY DAVENPORT-ENNIS, FOUNDING EXECUTIVE DIRECTOR, PATIENT ADVOCATE FOUNDATION

Ms. STORY. I would like to say that I appreciate the opportunity

to testify today. As you mention, I am a cancer nurse from Greenville, South Carolina, and part of my charge as a nurse is to treat

the human response to a disease process.

Because my testimony today will focus on the face of the patients

that perhaps this committee does not otherwise see, I would like

to ask you to humor me and ask everyone in the room to please

take out a pen and paper and jot down something for me. It would

take just a moment.

If you would write down ten things that are important to you,

please. Perhaps it would be your family—it might not be in any

particular order—perhaps some faith that you have. If you would

jot those things down for me. You might need to leave blanks.

Now if you would take a moment to look at that list, you might

have some blanks there. You might not have gotten to ten yet. I

would ask you to cross out four of those things that are most important to you in your life. Then take away another two. Now you

may have four things that are important to you, but I need you to

take away another two, please.

When I did this exercise yesterday, the person that I did it with

said, but I can’t take away those things, because you see, what is

left is maybe family, maybe God, and that is about it. That is what

every cancer patient that we treat faces. They lose their health. As

soon as they are diagnosed they lose their health. They lose their

financial security. They lose maybe their home. They lose their job.

They lose their ability to take care of others.

These patients face quite a bit of loss. I see that devastation

firsthand, and the impact on families. Then of course, the reason

I do all of this is because I do have an opportunity to see the triumphs of the human spirit.

I think, in that context, it is important to look at these drugs.

I am specifically speaking about cancer drugs. These drugs, including Procrit, Leukine, Neupogen, as well as actual chemotherapy

drugs, Interferon and Interleukin, really do increase the quality of

life for our patients. They make it possible for them to do things.

I know Julie Sizemore will be addressing that for you. They make

chemo tolerable, and they make chemo possible. They can allow patients to have a longer and routine treatment without the increased

discomfort that a patient might have.

I would contend that these medications, even though they are

subcu, they are not, by virtue of that fact, self-injectable.

Let me tell you why I believe that. The loss of coverage that this

policy that we are talking about today would cause really brings up

a lot of safety issues. We have patients who are physically frail.

They have lost their dexterity. The chemotherapy can make their

hands numb or tingle. There are issues of dosing, that the patient

could possibly get a wrong dose.

We have finally gotten to the point in this country where we

have continually, over the last 2 years, decreased the number of

deaths that we have had because of cancer. We expect to do that

39

in the year 2000, so we are turning the corner on the war against

cancer, mostly due to the National Cancer Act. We have more funding for research, so we know what the new drugs are. We know

how they work. We have education for doctors and nurses that allows them to fight the war. This proposal of so-called self-injectable

drugs and changing the coverage for them would threaten all that

we work for and fight for.

You may not know what those people look like, but I do, because

I see those people every day. I see them cry, and I did it before I

left. I cried with a patient that was going to lose her life. She has

progressed. I would ask you not to allow the coverage to be lost,

because those people need it.

[The prepared statement of Jane A. Story follows:]

PREPARED STATEMENT OF JANE A. STORY

Thank you for the opportunity to share my experiences with you. I am head nurse

in outpatient cancer setting. In that capacity, I care for cancer patients and their

families physically, emotionally, and spiritually. When cancer patients come to an

outpatient setting for their treatments, they often find in their nurses not only capable caregivers but also people who are willing to talk and laugh with them; sometimes those around them can manage to talk or laugh because life isn’t ‘‘normal’’

anymore. These patients see us frequently and we become part of their family. Fortunately, we oncology nurses are the ‘‘expert’’ family members who have the specialized training to know when a patient is in trouble and needs intervention versus

needing a compassionate ear and warm response.

Families frequently come into the challenge of cancer treatment unprepared for

the rigors they face. They are not sure what the expected results of chemotherapy

are, so they don’t know whether the symptoms and problems they see are ‘‘normal’’

for a cancer patient in treatment or not. Cancer nurses guide and educate the family

in these situations. For instance, we counsel patients and families about the threat

of plummeting blood counts and work to address that problem whenever it arises.

When a chemotherapy patient gets exposed to an infection and they do not have

white blood cells to fight infection, they are at risk for a more serious illness than

you or I might get. If a family member is not taught to call us when the temperature goes above 100.5 degrees (Fahrenheit), the infection could go into the patient’s

blood stream, necessitating hospitalization, sometimes in an intensive care unit. If

the infection goes into the blood stream (sepsis) and remains untreated, death is

possible. Without the skilled teaching of an oncology nurse, the patient and family

members might not call for a temperature under 102 degrees.

Injectable drugs comprise an important facet of the sophisticated drug care that

fights cancer. Several different classes exist, but the most frequently given drugs

are those that either stimulate the bone marrow to make more blood cells (like

Procrit, Neupogen, Leukine, and Neumega) or those that stimulate the immune system to fight the cancer (like Interferon or interleukin).

Chemotherapy affects quickly growing cells in the body. The chemotherapy doesn’t

know which cells are normal and which are cancerous, so it hits all quickly growing

cells, including hair cells, cells in the throat, intestines, and bowels, the cancer cells,

and blood cells. The types of cells that are affected (hair, gastrointestinal, and blood)

generally represent the major adverse responses to chemotherapy.

The most important quickly growing cells to our discussion are the blood cells.

There are three basic kinds of blood cells: white blood cells, which fight infections;

red blood cells, which carry oxygen; and platelets, which clot the blood. Neupogen

and Leukine increase the white blood cell count. If the white blood count or the mature white cells are too low, patients cannot get their chemotherapy since the chemo

would further decrease the white blood count, potentially leaving the patient without any defense against infection.

Without Neupogen and Leukine, patients must wait until their body naturally regenerates the white blood cells. During this period, patients can be exposed to infection. Increased hospitalization will be needed if a patient gets an infection or becomes septic. The cancer cells also have an opportunity to grow (since the chemo

is not killing the cancer), negating the positive effects of continuing chemotherapy.

Procrit increases the red blood cell count; a low red blood cell count increases the

fatigue a chemo patient experiences and can cause increased shortness of breath.

These increased side effects often debilitate chemo patients who are already physVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00043 Fmt 6633 Sfmt 6621 E:\HEARINGS\64029 pfrm08 PsN: 64029
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ically and emotionally stressed. Procrit enables them to manage these side effects,

often so that they can function at a more ‘‘normal’’ level. In other words, the Procrit

allows them to cope better with their cancer treatments. One of our patients, for

instance, is a Medicare beneficiary who lost an arm to cancer and is thrilled to have

the strength to leave her home to do simple things like food shopping. If Procrit is

not given, patients must receive transfusions of packed red blood cells in a hospital

setting. In addition to the cost, the transfusions expose them to blood-borne diseases

like Hepatitis-A or AIDS. The suppressed immune system of a cancer patient on

chemotherapy will not be able to fight these diseases.

Neumega increases the platelet count. Patients usually have decreased platelets

once they have received several rounds of chemotherapy. Without Neumega, patients typically must receive several platelet transfusions, which involve being admitted to the hospital (thus increasing hospital costs). Also, the patient is at increased risk of bleeding spontaneously. Obviously, the possible results of spontaneous, uncontrolled bleeding are hospitalization or death. Generally, Neumega is

used after a patient has both had their platelet count drop into a dangerous range

and needed transfusions of platelets. The Neumega prevents further drops in platelets. A decreased platelet count will also make a patient ineligible for chemotherapy.

Interferon and Interleukin are classes of drugs that stimulate the patient’s own

immune system to attack cancer cells. Interferon is used to treat melanoma, leukemia, lymphoma, Kaposi’s sarcoma, and hepatitis. This drug can be a very effective

and simple answer to these complex and deadly diseases. Interleukin, particularly

Interleukin-2, treats renal cell cancer; no other chemotherapy has been found to be

effective on this form of cancer. Without Interferon and Interleukin, the patient with

a disease listed above faces either more extensive chemotherapy with less effectiveness or a much quicker death.

If the Medicare program were to classify the injectables discussed above as selfinjectable drugs, the implications are profound. Foremost, these medications cannot

be safely given and monitored by the patient. Medicare patients with cancer are

generally frail; chemotherapy intensifies this effect. The patients may have tremors

or numbness and tingling in their hands due to the effects of chemotherapy. Cancer

fatigue, one of the most prevalent and least treatable side effects of chemo, creates

a lack of energy, making any activity feel impossible. Thinking about giving themselves an injection—an unfamiliar and complex task—will also feel impossible to the

elderly chemo patient.

Many Medicare patients cannot see clearly and have decreased manual dexterity

(both partially due to advanced age, but increased by the effects of chemo). These

drugs must be given in an exact dose via a needle with minute gradations. Of the

six medications discussed above, three must be mixed with a dilutant at the time

of injection. Only two of the medications come in individual dose vials. Thus, the

possibility of mixing the drug improperly or getting too large or too small a dose

is increased.

Additionally, in South Carolina, the majority of our Medicare patients have little

or no other source of income to pay for injectables. In the past as a home health

nurse, I entered Medicare patient homes with little or no heat, minimal food, and

bugs. Some patients barely have the resources to pay for their bills and food. The

medications in question cost anywhere from $500 to $5,000 per injection; the drugs

are given from once a week to once a day. For the typical South Carolina Medicare

patient and their families, the choice would either be surviving (eating, a roof over

their heads, etc.) or paying for the drug. At the Cancer Centers of the Carolinas,

we work with our patients and families to find a way to pay for their care (25%

of our patients are indigent). Over the seven years I have been a nurse, however,

I have seen patients and families, already stretched to their limit by the physical

and emotional demands of cancer, frantically seeking funds to pay for their own or

their loved one’s care. The treatment that Medicare makes possible for cancer

should not be taken away. Doing so would only add to the enormous burden the

patients and families face.

While the physical and cost facets of administering the injection play a large role

in my concern for Medicare coverage of these drugs, the possible adverse events are

chilling to me as a nurse. As mentioned above, these drugs require exact doses and

exact mixing. They also require trained observers (oncology nurses, with the support

and guidance of doctors) to manage and deal with the side effects. Just as chemotherapy can have life-threatening effects, so can Neupogen, Leukine, Procrit,

Neumega, Interferon, and Interleukin. For instance, Neupogen normally causes

skeletal pain, frequently in the sternal (breast bone) area. This needs to be assessed

by a nurse to discern whether the pain relates to cardiac problems or to the administration of the drug. Leukine can cause shortness of breath and fluid retention, as

well as rashes and flu-like symptoms. The shortness of breath and fluid retention

41

could be related to cardiac problems or the drug, and both might require intervention, including teaching by the nurse or the doctor seeing the patient and providing

medications. Procrit can cause hypertension, nausea, vomiting, and ankle swelling.

Again, an experienced, highly trained cancer nurse can determine whether these

side effects are a response to another drug (like chemotherapy), another disease

process, or the injectable drug. Neumega can cause fluid retention, shortness of

breath, and chest pain. These serious side effects may need the immediate medical

action that a cancer nurse in an office setting can secure. Interferon and interleukin

both have serious side effects that can limit the amount of the medication that the

patient can receive. The dose limiting factors for interferon include fatigue and severe weight loss, although non-dose-limiting side effects range from chills and fever

to liver, kidney, and heart changes. The patient may also have their potassium level

drop to an unsafe level, requiring oral or intravenous replacement. For interleukin,

dose-limiting adverse effects are mental status changes (confusion, agitation, and

disorientation); decreased platelet and red blood cell counts; and decreased blood

pressure. Patients receiving medications that have dose-limiting toxicities need a

trained observer to determine when the dose needs to be modified. An elderly patient at home would not be able to fulfill this role.

Every medication listed has the possibility of an allergic reaction with the first

dose. A patient taking the drug at home as a prescription might not have the medical resources available to survive such a situation. Office-based nurses can easily

manage this task.

All of these injectable medications require regular review of blood values (labs)

by a nurse for several reasons. First, if the patient takes the drug to increase their

white cells, red cells, or platelets, these blood levels can go too high if they are not

monitored. In the case of the white blood cells, this will cause aches and pains.

Platelets running too high can cause the blood to clot unnecessarily, perhaps causing a stroke or other adverse event. Second, a particular dose of a medication may

not guarantee the effect that is desired. Procrit, intended to increase the red blood

count, may increase the counts too much at one dose and not enough at another

dose. When a nurse assesses the patient regularly, this issue can be managed for

the appropriate outcome. Take our patient, Lucy W., as an example. On 40,000

units of Procrit per week, the patient’s counts went up too high. When the nurse

reported this to the doctor, the dose was decreased to 20,000 units per week. Subsequently, the patient came in with increased weakness and shortness of breath, so

the nurse requested blood counts be run. The results showed a drop in the counts,

so the Procrit dose was increased to 30,000 units per week and the patient’s counts

are being maintained. This intervention could only have happened via the intervention of a nurse attuned to the patient’s symptoms and knowledgeable about the

meaning and implications of blood test results as they relate to the medication.

In summary, making drugs used for cancer treatment self-injectable would undermine the war on cancer we are fighting. Out there on the front lines of that battle,

we have the tools to provide patients with optimal cancer care: drugs, which can

cure the cancer; supportive medications like these injectables, which allow patients

to tolerate their chemotherapy at higher doses with less side effects; and cancer

nurses, who treat the human response to the disease of cancer. Without any of the

three, the battle will be harder and the patients could lose the care and medications

they need. We will go backwards in time, losing the ground we have gained in this

battle and the resources we have invested in that fight through the National Cancer

Institute. The result will be increases: increases in inpatient hospital admissions

(and the associated costs) to deal with infections that could have been prevented;

increases in morbidity and mortality of patients who cannot afford the care they

need without the Medicare coverage they now receive; and an increased sense of

helplessness and hopelessness because patients and their families will lose the psychosocial and spiritual support oncology nurses provide.

I an thankful to Chairman Bliley and all the members of this committee for the

excellent job you have done in urging the Medicare program to do the right thing,

at least through September 30th. However, I urge you to keep the problem from reoccurring in the future. Our patients—who have become my friends and family—

and I thank you for your consideration as we fight the War on Cancer together.

Mr. BURR. Thank you very much, Ms. Story, for that very compelling and emotional testimony.

Dr. Steinberg, you are recognized for an opening statement.

42

STATEMENT OF EARL P. STEINBERG

Mr. STEINBERG. Thank you very much for the opportunity to

present to you this morning.

In the few minutes that I have available to me, I would like to

try to make five points related to the issue before you. First is that

outpatient prescription drugs, whether they are self-administered

or administered by a health care professional, are an absolutely essential part of the high quality or even a minimum standard of appropriate health care today.

This is particularly true with regard to treatment of chronic diseases. As Mr. Hash said, if the Medicare program were being designed today, I cannot imagine that prescription drugs would not

be a covered benefit, any more than I could imagine that either

surgery or radiology services would be excluded from coverage.

It is not unusual for elderly individuals with common chronic dis- eases, common chronic diseases, to require between $5,000 and

$10,000 worth of prescription medications in a given year. Without

insurance coverage for outpatient prescription medications, many

Medicare beneficiaries are not able to buy them.

I want to point out that this is not only high cost outlier patients,

or those who are poor who have difficulty affording their medications. Many of my former patients at Johns Hopkins who had incomes in the range of $25,000 per year did not fill the prescriptions

that I gave them because they could not afford to do so.

To the extent that Medicare beneficiaries do not have access to

these treatments, the Medicare program fails to accomplish its goal

of ensuring that the elderly and the disabled have access to necessary health care.

Second, as has been mentioned several times today, not all patients are the same. They vary greatly in the severity of their disease as well as the types and severity of morbidities that they

have. Consequently, the fact that one patient can self-administer a

drug does not mean that all patients can self-administer the same

drug.

In fact, given the progress that has been made in the development of drugs and in injection devices, it would be a rare instance

in which a physician or nurse could not train at least one patient

to administer a drug safely.

The third point I would like to make is that over the past 35

years incredible progress has been made in medical science, computer and electronic technology, and the development of

lightweighting and improved solid materials. As a result, pharmaceutical products, as well as techniques for administering them, are

available today that likely could not have even been imagined 35

years ago.

This progress has enabled patients who used to require prolonged hospitalization to be treated safely, more conveniently, and

less expensively at home. In other instances, the availability of new

routes of administration for drugs can result in the increased effectiveness of treatment due to faster or more thorough absorption.

I believe it is a mistake to have a coverage policy that actively

discourages rather than encourages such innovation.

Fourth, I would like to make a point that the status quo with regard to coverage of self-administratable drugs unfortunately perVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
43

turbs pharmaceutical manufacturers’ behavior in a perverse way.

Under the policy in place today, manufacturers sometimes are induced to formulate or reformulate drugs as injectables that could

be better administered orally.

A case in point is the drug Lupron, which is used to treat prostate cancer. Lupron was first developed in a formulation in which

it could be self-administered by subcutaneous injection. As a result,

it was not covered by Medicare. It was a failure commercially, and

the manufacturer then reformulated the drug so that it had to be

administered intermuscularly by a health care professional. That

reformulated drug was then covered by Medicare and is now used

commonly today.

Finally, the current situation with regard to coverage also perturbs physician behavior in a perverse way. If the optimal drug for

a patient is self-administratable but the patient cannot afford to

buy the drug, it does no good for a physician to prescribe it.

As a result, under current policy, when the best therapy can be

administered by a patient, this physician sometimes will resort to

prescribing an alternative, albeit suboptimal drug that must be administered by a health care professional.

In summary, given the high cost of prescription drugs, especially

among the elderly with chronic disease, many elderly cannot afford

to buy the drugs they need. Given the central role of these drugs

in health care today, Congress should add a prescription drug benefit to Medicare.

If, however, a politically viable approach for providing such a

benefit cannot be found, I urge you to modify the statutory language so as to maximize the number of Medicare beneficiaries who

have access under existing benefits to drugs that are safe and effective in treatment of the diseases from which they suffer.

In closing, I might just add that it seems to me that part of the

confusion about this issue results from the fact that there are multiple alternative definitions being made of what ‘‘selfadministratable’’ means. On the one hand, the more expansive definition is based on the usual method of administration, whereas the

more restrictive is based on a definition of whether the drug cannot

be self-administered.

I think this is where the heart of the issue about the cutback has

occurred.

Thank you very much.

[The prepared statement of Earl P. Steinberg follows:]

PREPARED STATEMENT OF EARL P. STEINBERG

Good morning. I appreciate the opportunity to testify today regarding Medicare

coverage of drugs that can, in some cases, be self-administered by patients in the

outpatient setting.

My name is Dr. Earl Steinberg. I am a general internist who practiced internal

medicine full- or part-time from 1979-1990. For the past 18 years, I have devoted

my career to 1) evaluation of the safety, effectiveness and cost-effectiveness of medical technologies, including prescription drugs; 2)—evaluation of health care providers’ actual patterns of practice; and 3) design and implementation of interventions to improve the quality and/or efficiency of care. From 1982 to 1994, I was on

the full-time faculty of The Johns Hopkins School of Medicine and School of Hygiene

and Public Health. I also served as Director of The Johns Hopkins Program for Medical Technology and Practice Assessment.

From 1994 to February of this year, I was a Vice President at Covance Health

Economics and Outcomes Services Inc., a consulting firm that helps to bring high

44

quality medical innovations to market, evaluate their performance once they are in

actual use, and improve the quality and efficiency of provider practice. During my

tenure at Covance, I served as Director of its Division of Quality Assessment and

Improvement Systems and Co-Director of its Outcomes Studies Group.

I currently am an independent health care services consultant, and an Adjunct

Professor of Medicine and of Health Policy and Management at The Johns Hopkins

University. I also am a member of the Blue Cross and Blue Shield Association’s National Medical Advisory Panel, on which I have served for the past 10 years. This

Panel oversees what is widely considered to be the best and most rigorous technology assessment activity in this country.

My background enables me to bring multiple, complementary perspectives to bear

on the issue you are considering today—an issue that I believe has become far more

complicated and vexing because of 30 years of medical and technological progress,

as well as two decades of changes in the Medicare payment system that provide a

strong financial incentive to discharge patients from the hospital as early as possible.

In the brief time I have with you this morning, I would like to make five points

that are central to the debate over how broadly or narrowly the concept of ‘‘selfadministerable drugs’’ should be construed.

First, outpatient prescription drugs, whether they are self-administered or administered by a health care professional, are an essential part of high quality, or even

a minimal standard of appropriate, health care today. This is particularly true with

regard to treatment of chronic diseases. If the Medicare program were being designed today, I cannot imagine that prescription drugs would not be a covered benefit, any more than I could imagine that either surgery or radiology services would

be excluded from coverage. Last year Medicare beneficiaries used between $30 and

$40 billion worth of outpatient prescription drugs, many of which have become quite

expensive. It is not unusual for elderly individuals with common chronic diseases

to require between $5000 and $10,000 worth of prescription medication in a given

year. In a study of actual prescription claims generated by over 375,000 elderly individuals that I recently conducted with collaborators at Merck Medco Managed Care

and the Henry J. Kaiser Family Foundation (Steinberg EP, Gutierrez B, Momani

A, Boscarino JA, Neuman P, and Deverka P; Beyond Survey Data: A Claims-Based

Analysis of Drug Use and Spending by the Elderly; Health Affairs (March/April

2000): 198-211) , we found that 5 percent of people in our sample had more than

$4000 in prescription drug expenditures and one percent had $6,600 or more in such

expenditures during 1998. Total annual spending for elderly with chronic disease

was 50% to 200% higher than for others. As a result, one percent of elderly with

cancer or common combinations of chronic diseases,, such as diabetes and heart disease, had total annual spending greater than $9,000. Without insurance coverage

for outpatient prescription medications, many Medicare beneficiaries are not able to

buy them. I should point out that it is not only high cost outlier patients, or those

who are poor, who have difficulty affording their medications. Many of my former

patients at Johns Hopkins who had incomes in the range of $25,000 per year did

not fill the prescriptions I gave them because they could not afford to do so. To the

extent that Medicare beneficiaries do not have access to these treatments, the Medicare program fails to accomplish its goal of ensuring that the elderly and disabled

have access to necessary health care.

Second, not all patients with a given disease are the same. Patients vary greatly

in the severity of their disease, as well as the types, number and severity of the

other diseases that they have. Some have poor vision. Some have cognitive disorders. Some are physically unable to perform simple tasks. Consequently, the fact

that one patient can self-administer a drug does not mean that all patients can selfadminister the same drug. Congress recognized this fact when it fashioned the

Medicare benefit for Coverage of Osteoporosis Drugs. This provision states that

injectable drugs approved for use in treatment of a woman who has suffered a bone

fracture that is related to postmenopausal osteoporosis are covered if ‘‘the individual

is unable to learn the skills needed to self-administer such drug or is otherwise

physically or mentally incapable of self-administering such drug.’’ To me, as a clinician, it makes little sense to apply these very relevant considerations ONLY to

women with postmenopausal osteoporotic fractures.

For many reasons it is not surprising to me that there is confusion and controversy surrounding interpretation of the Social Security Act’s provision regarding

coverage for drugs and biologicals which cannot be self-administered. There are

many other potential operational definitions of what constitutes a selfadministerable drug. For example, judgments regarding the self-administerability of

a drug could be based on the usual method of administration of the drug, on the

basis of whether any patient can self-administer the drug, or on the basis of whethVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00048 Fmt 6633 Sfmt 6621 E:\HEARINGS\64029 pfrm08 PsN: 64029
45

er a given patient can self-administer the drug. Given the progress that has been

made in development of injection devices, it would be a rare instance in which a

physician or nurse could not train at least one patient to administer a given drug

safely. Yet another potential definition would be one in which a drug would be considered to be self-administerable if the label for the drug indicates that the drug

can be administered by a patient without the need for medical supervision. While

many other such definitions could be fashioned, I believe it is not possible to develop

a definition that makes sense from a clinical perspective other than leaving the

judgment regarding the best means of administering a drug to the patient’s physician.

The third point I would like to make is that over the 35 years since the Medicare

program was enacted, incredible progress has been made in medical science, computer and electronic technologies, and the development of light-weight and improved

solid materials. As a result, pharmaceutical products, and techniques for administering them, are available today that likely could not have been imagined 35 years

ago. This progress has enabled patients who used to require prolonged hospitalization to be treated safely, more conveniently, and less expensively at home. In other

instances, the availability of new routes of administration for drugs—for example,

topically, intranasally, or via inhalation—can result in increased effectiveness of

treatment as a result of faster or more thorough absorption. I believe it is a mistake

to have a coverage policy that actively discourages, rather than encourages such innovation.

Fourth, the status quo with regard to coverage of self-administerable drugs perturbs pharmaceutical manufacturers’ behavior in a perverse way. In circumstances

in which only a small number of non-elderly are the target patient population for

a drug, the commercial success of a product may depend on whether Medicare covers it. Consequently, under the policy in place today, manufacturers are induced to

formulate drugs as injectables that could be better administered orally. A case in

point is the drug Lupron ,which is now commonly used to treat prostate cancer, a

disease that occurs most commonly in men over the age of 65. Lupron was first developed in a formulation in which it could be self-administered by subcutaneous injection. As a result, Lupron was not covered by Medicare. In order to make the drug

commercially viable, the manufacturer of Lupron re-formulated the drug so that it

had to be administered intramuscularly by a health care professional. The reformulated drug was covered by Medicare and now is used commonly. Many other companies have been forced to employ less than optimal formulations of their products in

order for them to be covered by Medicare.

Finally, the current situation with regard to coverage of self-administerable drugs

also perturbs physician behavior in a perverse way. If the optimal drug for a patient

is self-administerable, but the patient cannot afford to buy the drug, it does no good

for a physician to prescribe it. As a result, under current policy, when the best therapy can be administered by a patient, physicians often will prescribe an alternative,

albeit sub-optimal, drug that must be administered by a health care professional.

In some instances, such ‘‘second-best practice’’ from a clinical perspective can also

be the most costly practice, either because the second best drug is more expensive

or because administration of it can require the development of an office infrastructure that adds to the cost of therapy.

In summary, given the high cost of prescription drugs, especially among elderly

individuals with chronic disease, many elderly cannot afford to buy the drugs they

need without drug insurance. Given the central role prescription drugs play in

health care today, Congress should add a prescription drug benefit to Medicare. If

a politically viable approach for providing such a benefit cannot be found, I urge you

to modify the statutory language so as to maximize the number of Medicare beneficiaries who have access to drugs that are safe and effective in treatment of diseases from which they suffer under existing benefits.

Mr. BURR. Thank you, Dr. Steinberg. I want to apologize to the

rest of our panel, at least for the bell. It is our intent to take a

break here. We have a series of votes on the House floor. We would

like to recess until 12:45. Hopefully, that is enough time to get our

series of votes out of the way and to allow you each to get a bite

to eat downstairs if that is something that you choose to do, or to

get just a little break.

The committee will reconvene at 12:45 for the rest of the testimony.

[Brief recess.]

46

Mr. BILIRAKIS. The hearing will come to order.

Ms. Sizemore, of course, you know your written testimony is part

of the record. Would you like to proceed?

STATEMENT OF JULIE SIZEMORE

Ms. SIZEMORE. Yes.

First of all, I want to thank you for letting me speak today: I will

try it my best to say what I need to say in the time allotted.

First of all, I need to show you a picture of my family. This is

my husband and my son Jacob. My son Jacob was 15 months old

when my husband was diagnosed with stage 4 adrenal cancer.

Prior to June 7, 1998, David and I knew very little about cancer.

No one in our family had had it, no close friends had had it, so our

knowledge was very limited. After June 7, 1998, we would embark

on a journey that would teach us more than we would ever want

to know about this disease.

The first of our learning experiences began with injections. The

chemotherapy that David was given broke down his blood, and in

order for his blood and his body to be able to endure chemotherapy

given in a timely fashion and in a dose that would kill the cancer,

he had to have these injectables.

These injectables enhanced David’s quality of life and extended

his life. He lived 15 months with this disease. Fifteen months was

15 months longer that Jacob got to spend time with his father. The

injectables, along with the chemotherapy, gave us time. Time to

make memories, and time for David to take Jacob to the airport to

watch the airplanes land for the first time. Time to put up a basketball goal for him. Time to take him to an amusement park.

Time to take him out on the golf course for the first time. Things

that we took pictures of and that now are my memories. Now when

my son asks about his daddy, they are in a photo album that we

pull out, and I will show him all the things his daddy did with him.

You may ask yourself, at 32 years old, what do I know about

Medicare? It has come to my awareness in the last week that if

Medicare no longer provides funding for these injections, that managed care, in my case Blue Cross-Blue Shield, would follow suit.

Then not only are the elderly citizens of our country affected, but

anyone is with a terminal illness that needs these injections.

Self-injectables are first of all dangerous. David was a 36-yearold very strong, healthy man with a very sharp mind when he was

diagnosed with cancer. The chemo left him sick, left him fatigued,

left him cloudy mentally, at times. He was in no way in a shape

to inject himself.

He was 36. I can only imagine if he had been 40 years older,

even if he did not have Alzheimer’s at 76, even if he did not have

dementia, just the mere fact as we age we forget things——

Mr. BILIRAKIS. Tell me about it.

Ms. SIZEMORE. He also had allergic reactions to these injections.

For someone injecting themselves who may not have someone to

care for them at home, to have an allergic reaction could be fatal.

The injectables are expensive. I have a list that I got from my

pharmacy of all the drugs that David received in 15 months. These

injections, if we had had to pay for them, as well as if an elderly

citizen had to pay for them, in 15 months’ time, which he was not

47

on these injections every day, it would have exceeded $40,000,

which would have financially devastated us, and we are not poor.

We are not in a poor income. But it would have financially devastated us.

Shortly after David was diagnosed with cancer, his 76-year-old

father, who was a World War II veteran, was diagnosed with leukemia. His responsibility to my family, as I said, has changed at

76. He now can provide memories to my son of his son, of what

David was like when he was a boy, a teenager, something that I

was not around for.

So his existence is insurmountable in my family now. The

thought of Leo not being covered for these injectables if he would

need them, not being paid for, having to inject himself, would be

detrimental. He would die, just as David would have died without

these injections, he would have died earlier.

I want to back up, because this is real important for me to say.

In terms of the safety involved in self-injecting, David had times

after cis platinum where his hands were numb and he could not

feel his fingers, let alone give himself an injection. Due to the high

doses of morphine he received, he jerked. He would be lying still

and he would jerk, because the doses of morphine were so high.

His side effects were unpredictable. The way he would feel was

unpredictable. It would have to be something that a physician

would have to examine him every single day if you are going to say

someone can give themselves an injection, because it was unpredictable side effects.

I ask you to provide funding for older Americans, for everyone

who needs these drugs, and to not let them self-inject out of safety.

Do not put their families in a position of having to decide whether

or not they die or live based on money.

You cannot put a price on the memories that I have of my husband, the time that we got, that we had with those 15 months, for

him to fill out a journal for his son. You cannot put a price on that,

and you cannot put a price on the memories that my father-in-law

still has to share with Jacob about his son.

So I ask, for my son’s sake and for my father-in-law’s sake, that

you not let this pass.

[The prepared statement of Julie Sizemore follows:]

PREPARED STATEMENT OF JULIE SIZEMORE

Before June 7, 1998, my husband David and I knew very little about cancer. In

fact, all we knew is what we heard about other families’ experiences or what we

saw on television. Frankly, cancer was not anything we really paid any attention

to because it had never touched our lives.

But then, on June 7, 1998, David and I embarked on a journey that would teach

us more about cancer than we would have ever wanted to know. On that date,

David was diagnosed with Stage IV adrenal cancer. David had a tumor the size of

a grapefruit that had actually taken over his right adrenal gland. He also had 60-

70 metastases in his lungs.

Even though adrenal cancer is often curable, it has to be caught early. The problem with adrenal cancer, though, is that its symptoms are often masked until the

cancer has metastasized into other areas of the body. Because of the advanced state

of David’s cancer, we soon learned that his cancer was incurable.

David’s treatment began on June 21, 1998, and it ended shortly before his death

on September 14, 1999. At the time my husband was diagnosed, our son Jacob was

15 months old. When David left us, Jacob was 30 months old.

I am here today to honor David and, hopefully, to bring a human perspective to

the issue you are addressing. If what I have learned along my family’s journey with

48

cancer is helpful to you, then I pray that something good will come of the tragedy

we experienced.

Among the things I learned during the last two years is how important cancer

therapies are. David’s treatment included chemotherapy and injectable drugs. The

drugs enabled David to tolerate his chemo and extended David’s life. The drugs gave

us more time to make memories as a family, and they enhanced David’s quality of

life, giving him more energy to enjoy the time he had left.

In other words, the injections, along with the chemotherapy David received,

bought us time. It bought time for David to take Jacob to the airport to watch airplanes land for the very first time. It bought time for David to take Jacob to a golf

course and an amusement park, and to build him a bicycle. It bought time for Jacob

to watch his daddy playing piano, and it bought time to establish for Jacob a favorite song—‘‘Great Balls of Fire’’—which he would ask David to play for him.

In short, David’s treatment bought him the time he needed to leave Jacob not

when he was only 15 months old, but when he was twice that age.

The treatment David received gave us the time to build memories and compile

the pictures that Jacob and I often call on to help us through the days and nights

without him. Those are memories of love that our extended time with David has

given to Jacob and me. If David had only lived 6 months, Jacob would have missed

so much. The injections and care David received gave him something priceless—

time with his father. I don’t know what the term ‘‘quality of life’’ means to you, but

that is what it means to me.

Only months after David’s diagnosis, David’s 75 year old father—a WWII veteran—was diagnosed with leukemia. I know that the thought of a senior with cancer is not always as heart-wrenching as a child with the disease. I, too, found myself

at times having a silent conversation with the elderly patients I saw at David’s cancer center. ‘‘You’ve had your whole life to live,’’ I would think. ‘‘My husband is only

36 and he’s dying.’’

That terrible thought left me for good, though, after David died. At that time, I

realized that I needed his father to live not only for his own sake but for my son’s.

With his wealth of memories of his son, my father-in-law is a connection to David

that my son needs very, very much.

And so, at 76 years old, my father-in-law, Leo, has a new responsibility. You see,

Leo needs to pass on to Jacob the memories he has of David as a child, a teen, and

a young adult. And Leo needs to be there when my son is old enough to inquire

about and understand who his father was.

As David’s battle progressed, I learned that the tremendous value of the treatments he received and his father continues to receive do not come without cost. If

David’s injections had not been covered by his insurance, his treatment would have

been financially devastating to us. Instead, David’s coverage enabled him to receive

the drugs he needed and to live as long as was possible. The same holds true today

for Leo and the Medicare coverage he currently receives.

During David’s battle, I also learned that these injections come with a great deal

of risk. Although I understand that many of these therapies may be technically selfinjectable, self-injection was out of the question for David as it is for so many other

patients. How David felt was never something that could have been predicted;

chemotherapy often left him extremely fatigued, weak, and nauseated. These sideeffects not only made life difficult for David, they made consistently safe self-injection impossible.

It is because of these experiences that I approach the issue you are addressing

today with quite a bit of fear. What David, Jacob, and I experienced is something

that I would spare others, if only I could. It also makes me worry for those, like

Leo, who would be impacted by the loss of Medicare coverage for the therapy that

made such a difference in David’s life.

I fear for Leo and other seniors with cancer, for whom the loss of the Medicare

coverage they receive today would be financially devastating. Many of these patients

would not be able to afford their therapy. And their families would be forced to deal

with the painful choice of having to do whatever is necessary to find the resources

they need—or to let their loved ones die.

I fear for those seniors for whom self-injection would mean a death sentence. Like

many cancer patients, David had an adverse reaction to one of his injections. If a

senior had a similar response, and was alone, who would help them? If they were

unaware of the reaction until it was too late, would they be able to even pick up

the phone and dial 911? Or would they have to rely on a spouse who may also be

weak or disabled?

I fear for the seniors who may not be able to keep track, by themselves, of all

that their care entails. Fortunately, David’s mind was very sharp. But because there

were so many medications to take, he would have forgotten which he had taken and

49

which he had yet to take were it not for the care of his doctor and nurse. Chemotherapy makes this even more difficult, since it often causes fatigue and, for many,

disorientation. David was only 36 when he died—what would it be like for people

40 years older than him to have to tackle these challenges alone?

I also fear for people who, like David, are too young for Medicare. While cutting

current Medicare coverage may not impact them directly, they will suffer as a result. That is because managed care plans often follow Medicare’s lead when it comes

to cutting reimbursement. We would not have made it without David’s coverage.

What would happen to all those patients and families whose insurers copy Medicare

and drop coverage for the life-saving drugs they need?

Finally, I fear for my son, Jacob.

If my father-in-law, Leo, loses the coverage that gives him the care he depends

upon to live, he might lose his battle with cancer too early to fulfill his mission. The

difference of a few years in an elderly man’s life may not seem like much to some,

but they mean the difference between my son really knowing his father, or not.

For Jacob’s sake. For Leo’s sake. For the sake of the other old and young cancer

patients who are out there. And for the sake of my husband’s memory. Please do

not allow anyone to take away the coverage that lets some win their war on cancer

and helps others make the most of the time that they have left.

Thank you.

Mr. BILIRAKIS. Thanks, Ms. Sizemore.

Ms. Rybicki?

STATEMENT OF MARIELLEN RYBICKI

Ms. RYBICKI. Mr. Chairman and other members of the committee, my name is Mariellen Rybicki. I live in Reston, Virginia,

and I have multiple sclerosis. On behalf of myself and the many

others who have Medicare coverage but who cannot afford drug

treatment, I wish to thank this committee for your efforts to restore Medicare coverage for MS treatment.

As a result of last week’s announcement that Medicare has

changed its policy, I will now be able to receive the treatment that

I have not been able to afford. From 1997 to the present, Medicare

has not covered any drug for the treatment of multiple sclerosis.

However, 3 years ago my Medicare carrier in Virginia did reimburse for a multiple sclerosis drug which is given intramuscularly.

Then, in 1997, for reasons I do not understand, Medicare terminated coverage for this drug. Last week’s announcement is the first

good news I have had since my diagnosis.

I was not able to utilize drug therapy during the time Medicare

provided coverage, that is, prior to 1997. The intramuscular drug

therapy Medicare used to reimburse for only became available in

May 1996. Later that year, my doctor made me aware of the availability of drug therapy. I was already enrolled in Medicare Part A,

but I was not enrolled in Medicare Part B, the part of the Medicare

program that reimburses for the type of drugs that we are talking

about today. It was not until 1997 that I applied to become eligible

for Medicare Part B, and then I had to satisfy a waiting period.

When I did become eligible for Part B, I literally had a prescription

in my hand, and then I was told that Medicare had already

changed its policy and had stopped coverage.

I need to be in a course of extended drug treatment. The drug

that will now be covered by Medicare has been shown to significantly retard the progression of multiple sclerosis. Presently, I take

high doses of steroids to control my spasticity. However, no matter

what I do to control my symptoms, my disease will continue to

worsen without drug therapy.

50

Multiple sclerosis is a horrible disease. It causes the body’s immune system to attack the nerve tissue in the brain and spinal column, forming patches called plaques. As the disease progresses, it

destroys the myelin coating that surrounds the nerves and the

nerves themselves. Intact nerves with a myelin coating are what

enable the transmission of messages between the brain and other

parts of the body. As the coating and nerves are progressively destroyed, the symptoms of multiple sclerosis get worse.

For some inexplicable reason, in the early stages of multiple sclerosis symptoms generally will come and go. Later, these symptoms

usually become permanent. Presently, I have great difficulty walking. I wear a brace and use a cane because my foot falls when I

try to put my heel on the ground. I have numbness in my right

hand and weakness in my fingers. I also have difficulty swallowing.

Still, without drug therapy, and allowing this disease to go unchecked, my symptoms will worsen.

Many people who suffer from MS have brain atrophy. Cognitive

skills are lost, tremors, loss of balance, and control of bodily function can ensue. Because of the many difficulties multiple sclerosis

patients face on a daily basis, many cannot physically self-inject.

This is especially true for the drug treatment that is given

intramuscularly. The needle that is required for this injection is

about one and a quarter inches, and requires some skill for the

proper dilution of the drug. This obviously makes it nearly impossible to self-inject for a person who has tremors, loss of hand-eye

coordination, weakness, and loss of sensation.

Now under the policy change, people with multiple sclerosis will

be able to get reimbursement for intramuscular injections when

done in a doctor’s office.

I cannot overstate my appreciation for what Congress has done

to restore drug coverage for multiple sclerosis patients. However,

since this policy change expires in September, I am also concerned

that this coverage for multiple sclerosis treatment will once again

be taken away. Today I ask that Congress not allow this to happen.

I would be glad to answer any questions that any of the members

of the committee might care to ask.

[The prepared statement of Mariellen Rybicki follows:]

PREPARED STATEMENT OF MARIELLEN RYBICKI

Mr. Chairman and other members of the committee, my name is Mariellen

Rybicki. I live in Reston, Virginia and I have multiple sclerosis. On behalf of myself

and the many others who have Medicare coverage but who cannot afford drug treatment, I wish to thank this committee for your efforts to restore Medicare coverage

for MS drug treatment.

As a result of last week’s announcement that Medicare has changed its policy, I

will now be able receive the treatment that I have not been able to afford. From

1997 to the present, Medicare has not covered any drug for the treatment of multiple sclerosis. However, three years ago my Medicare insurance carrier in Virginia

did reimburse for a multiple sclerosis drug which is given intramuscularly. Then in

1997, for reasons I do not understand, Medicare terminated coverage for this drug.

Last week’s announcement is the first good news I’ve had since my diagnosis.

I was not able to utilize drug therapy during the time that Medicare provided coverage (that is prior to 1997). The intramuscular drug therapy that Medicare used

to reimburse for was only available in May, 1996. Later that year, my doctor made

me aware of the availability of this drug therapy. While I was already enrolled in

Medicare, Part A, I was not enrolled in Medicare Part B, the part of the Medicare

program that reimburses for the type of drugs that we are taking about today. It

was not until 1997 that I applied to become eligible for Medicare Part B, and then

51

I had to satisfy a waiting period. When I did become eligible for Part B, I literally

had my prescription in hand when I was told that Medicare had already changed

its policy and had stopped coverage.

I need to be on a course of extended drug treatment. The drug that will now be

covered by Medicare has been shown to significantly retard the progression of multiple sclerosis. Presently, I take high doses of steroids to control my spasticity. However, no matter what I do to control my symptoms, my disease will continue to worsen without drug therapy.

Multiple sclerosis is a horrible disease. It causes the body’s immune system to attack the nerve tissue in the brain and spinal column, forming patches called

plaques. As the disease progresses, it destroys the myelin coating that surrounds

the nerves and the nerves themselves. Intact nerves with a myelin coating are what

enables the transmission of messages between the brain and other parts of the body.

As the coating and nerves are progressively destroyed, the symptoms of multiple

sclerosis get worse.

For some inexplicable reason, in the early stages of multiple sclerosis, symptoms

generally will come and go. Later these symptoms usually become permanent. Presently, I have great difficultly walking. I wear a brace and use a cane because my

foot falls when I try to put my heal on the ground. I have numbness in my right

hand and weakness in my fingers. I also have difficulty swallowing.

Still, without drug therapy and allowing this disease to continue unchecked my

symptoms will worsen. Many people who suffer from MS have brain atrophy. Cognitive skills are lost. Tremors, loss of balance, and control over bodily functions can

ensue.

Because of the many difficulties multiple sclerosis patients face on a daily basis,

they cannot physically self-inject. This is especially true for the drug treatment that

is given intramuscularly. The needle that is required for this injection is about 1

and a quarter inches and requires some skill for the proper dilution of the drug.

This obviously makes it is nearly impossible to self-inject for a person who has tremors, loss of hand-eye coordination, weakness, or loss of sensation. Now, under the

policy change, people with multiple sclerosis will be able to get reimbursement for

intramuscular injections when done in a doctor’s office.

I cannot overstate my appreciation for what Congress has done to restore drug

coverage for multiple sclerosis patients. However, since this policy change expires

in September, I am also concerned that this coverage for multiple sclerosis treatment will once again be taken away. Today I ask that Congress not allow this to

happen.

I would be glad to answer any questions that any of the members of the committee might care to ask.

Mr. BILIRAKIS. Thank you very much, Mrs. Rybicki.

Ms. Lohrman.

STATEMENT OF ROSALIE LOHRMAN

Ms. LOHRMAN. Your Honor, Mr. Chairman, my name is Rosalie

Lohrman. I am 61 years of age. I have renal cell cancer. I had to

retire at age 57, not because I wanted to, but because of my disease. I had to take an early disability. That put me into the system

of social security, and after 2 years of being disabled I was put into

the Medicare system. I had good insurance, but I had to go into the

Medicare system.

In August 1999, my doctor, Dr. John Downs from Towson, he

suggested that I go on Interferon and Interleukin because my cancer had advanced quite rapidly within a short period of time, so we

went through with applying for it. Imagine my surprise when I was

denied. I thought surely it must be a mistake. My government was

not going to let me down now, after I had paid into the system for

my whole entire working life. So I sent in and received a second

denial. Medicare wouldn’t pay for self-injectable drugs.

That was the time I really started getting mad about it. I started

knocking on every door and ringing every telephone I could. The

National Cancer Foundation, the Kidney Foundation, Patient AdvoVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 E:\HEARINGS\64029 pfrm08 PsN: 64029
52

cates, my Congressperson, anybody and everybody I could, and

mostly my insurance company, because I wanted them to know

when they saw the name Rosalie Lohrman who I was. I didn’t care

whether I talked to the secretary, I didn’t care whether I talked to

the president of the association that I was in contact with, I just

wanted somebody to hear my voice and say that self-injectable

drugs do need to be approved for cancer, for Interferon and

Interleukin.

At that point I felt like a nobody, because I felt like, well, Medicare is just seeing me as a name and Medicare number

2192063102. But I was somebody. I am a wife of 44 years, mother

of three sons, 11 grandchildren, a sister, a friend, and I thought a

good American citizen, but now the system was letting me down.

But I continued to fight. But a lot of times people with cancer, they

don’t have the stamina to fight and knock on every door and ring

every phone, so that is an added stress.

Then you think, well, how am I going to fight the U.S. Government? If they are saying no, they are saying no. So it was just a

lot of stress, that is all I can say. It was a lot of stress, but it did

give me the will to keep on going.

I guess what I am saying is I became depressed. I just was put

under added stress that I did not need to be under at that point.

I guess the point I want to make is when you have cancer, sometimes you do not have the strength or the state of mind to fight

as hard as I did.

Some people would have gotten their first denial and said, well,

I can’t fight City Hall. I might as well just give up now. But you

cannot have that outlook. Therefore, I must stress to you the need

for a permanent change in Medicare to cover self-injectable drugs.

Thank you.

[The prepared statement of Rosalie Lohrman follows:]

PREPARED STATEMENT OF ROSALIE LOHRMAN

Your Honorable Mr. Chairman, my name is Rosalie Lohrman of Pasadena, Maryland. I’m 61 years of age, I have renal cell cancer, I retired at age 57 on disability

due to my cancer. I worked for 30 years at Super Fresh. In August, Dr. John Downs

prescribed interferon and interleukin 2—the only effective treatment for my type of

cancer. Imagine my surprise when I got my first denial. I thought surely they had

made a mistake. How could they deny me when I needed them? A system I had

paid into my entire working life. I got my second denial reason being they would

not cover self-injectable drugs. Now I was getting mad. Here I have advanced cancer

and Medicare was denying the only hope for me. I felt like a nobody, just a name

and a Medicare # 219263102. Here I am a wife for 44 years, a mother of 3 sons,

a sister, a friend and a hard-working American citizen and paid into the system

every week. Now they are denying me a cancer treatment because they won’t cover

self-injectable drugs. I went on to my third appeal and was denied, but they knew

who Rosalie Lohrman was. I called and got in touch with anybody and everybody

I could. National Kidney Foundation, PAF office, my congressperson, my state government, general attorney’s office, and I called my insurance company almost every

day. I didn’t want to fall through the cracks, I wanted them to know who I was

and what I needed. I became depressed and full of stress. Now I am not only fighting cancer, but I am fighting the system because Medicare won’t cover self-injectable

treatment. The point I want to make is, there needs to be changes to Medicare coverage. Cancer patients sometimes neither have the strength or the state of mind to

fight as hard as I did, therefore, I must stress to you, there needs to be changes

in Medicare to include coverage of self-injectable drugs.

Mr. BILIRAKIS. Thank you, Ms. Lohrman.

Ms. Nancy Davenport-Ennis. Please proceed, ma’am.

53

STATEMENT OF NANCY DAVENPORT-ENNIS

Ms. DAVENPORT-ENNIS. Thank you. I must say, Mr. Chairman

and members of the committee, that I think without question the

witnesses that you have heard have probably told a far more compelling story than I.

I would like to share with you that I am before you today as a

cancer survivor, as a mother-in-law of a 25-year-old son-in-law who

is a cancer survivor, as an aunt of a 34-year-old niece who was deceased with ovarian cancer in October of this year.

I sit before you as an American who is concerned about the

health care delivery system of this country, in an effort to try to

do something to improve it. I sit before you also as a founding executive director of the Patient Advocate Foundation, which supplies

direct patient services to patients who are confronting access problems and insurance and job discrimination and debt crisis problems.

I also sit before you as a founding executive director of the National Patient Advocate Foundation, which is an organization that

has worked really very hard and very deliberately to try to be able

to have positive dialog with both parties in our Nation as we seek

to effect policy reform.

I would like to thank members of the subcommittee for their

leadership in ensuring that the issue of Medicare reimbursement

for injectable drugs and biologicals was addressed in the Department of Health and Human Services funding bill. I am also pleased

that the Health Care Financing Administration issued a program

memoranda on March 17 that removes, for at least this fiscal year,

the barriers to Medicare reimbursement for injectable drugs.

I would like to take this opportunity to explain the involvement

of our organization in this issue. In 1999, the Patient Advocate

Foundation handled 29,000 calls. Many of our calls came from cancer patients, but we also served individuals with AIDS, with other

serious and life-threatening illnesses.

It is our mission to provide case managers and attorneys to individuals who are having difficulty gaining access to health care.

When individuals are diagnosed with cancer or any other serious

illness, we feel they need to devote themselves to fighting their disease, and not to be distracted by fighting for access to the care that

their physicians have recommended. If there is a need to address

access, we feel that it is our role as a voluntary health agency to

do that for those patients that contact us.

The National Patient Advocate Foundation is an organization

that seeks to create avenues of access through policy and legislative reform, that serves as a voice for those who are seeking access

in the system. Our advocacy activities are informed and influenced

by the information that we receive through the counseling and case

management activities through the Patient Advocate Foundation.

When we observe trends in the cases that we handle, whether

they are a pattern of denials or an apparent shift in public or private insurance coverage standards, we explore the reasons for the

apparent pattern. If appropriate, we address the underlying policy

behind a new or revised coverage decision, and we seek to ensure

patient’s continued access to quality care.

54

It is the work of public education that brings us to this committee today. In 1998 and in 1999, we observed an increased rate

of Medicare denials for certain self-injectable drugs and biologicals.

Individuals who had previously received Medicare coverage for

injectable products were being denied this coverage.

Our calls regarding denials came from individuals with cancer,

carcinoid syndrome, acromegaly, and AIDS, as well as those who

had received organ transplants and renal dialysis.

When we investigated this matter, we discovered that it had

been the consistent policy of Medicare to provide payment for

injectable drugs and biologicals if they are administered in a physician’s office, even though they may theoretically be self-administered in some settings. The question of whether they should be considered self-administrable and thus not covered by Medicare have

been resolved based on, and I quote from the regulation, ‘‘the usual

method of administration of the form of that drug or biological as

furnished by the physician,’’ according to the Medicare carriers’

manual.

Under this provision, injectable drugs had long been reimbursed

when administered incident to physician services. Unfortunately, in

1999, HCFA appeared to be considering changes in its policy of reimbursement for injectable drugs, and a number of carriers had

begun to deny reimbursement for injectable drugs.

The result for our patients was disastrous. Medicare patients

were left with the responsibility to pay for their own medications

and then to self-inject them. This results in decreased quality of

care. Injectable drugs cannot be easily self-administered by the elderly or disabled, as you have heard in earlier testimony. Our patients affirmed to us how these changes would adversely affect

their health.

We joined with our colleagues in the Cancer Leadership Council

to oppose efforts by HCFA to restrict reimbursement for injectable

drugs and biologicals. In addition, we supported efforts to include

a provision in Public Law 106-113, the Department of Health and

Human Services.

We would like to express our thanks to the Congress for its action on this matter. Regrettably, enactment of Section 219 of Public

Law 106-113 did not result in immediate action by HCFA to clarify

with its carriers the policy for reimbursement of injectable drugs.

This memorandum should temporarily eliminate the reimbursement difficulties that our clients have recently encountered.

However, we also note that the program memoranda ‘‘may be

discarded after September 30, 2000.’’ HCFA appears to be relying

on the technicality that the provision related to injectable drugs

was included in an appropriations bill to justify discarding the program memorandum at the end of the year. Although we believe the

intent of Congress on this matter is clear, it may be necessary for

Congress to revisit this issue before the end of the fiscal year to

prevent disruption in services to Medicare beneficiaries.

In closing, I would like to state we believe the current policy in

reimbursement of injectable drugs and biologicals, the policy announced in the March 17 program memorandum, is the correct one

for Medicare beneficiaries and for the program. We urge that

HCFA clarify that this policy is a permanent one. We will be joined

55

by the entire cancer community in opposing any policy that will

limit access to injectable drugs and biologicals.

Thank you for indulging me.

[The prepared statement of Nancy Davenport-Ennis follows:]

PREPARED STATEMENT OF NANCY DAVENPORT-ENNIS, EXECUTIVE DIRECTOR, PATIENT

ADVOCATE FOUNDATION AND THE NATIONAL PATIENT ADVOCATE FOUNDATION

Mr. Chairman and Members of the Subcommittee, I am Nancy Davenport-Ennis,

Executive Director of the Patient Advocate Foundation and the National Patient Advocate Foundation. I would like to thank the members of the Subcommittee for their

leadership in ensuring that the issue of Medicare reimbursement for injectable

drugs and biologicals was addressed in the Department of Health and Human Services funding bill. I am also pleased that the Health Care Financing Administration

(HCFA) issued a Program Memorandum on March 17 that removes, for at least this

fiscal year, the barriers to Medicare reimbursement for injectable drugs.

I would like to take this opportunity to explain our involvement in this issue. The

Patient Advocate Foundation is a national non-profit organization that serves as an

active liaison between patients and their insurers, employers, and/or creditors to resolve insurance, job discrimination, and/or debt crisis matters relative to their diagnosis. The Patient Advocate Foundation seeks, through case managers and attorneys, to assure patients access to care, maintenance of employment, and preservation of their financial stability.

In 1999, the Patient Advocate Foundation handled 29,000 calls. Many of our calls

came from cancer patients, but we also serve individuals with AIDS and other serious and life-threatening illnesses. It is our mission to provide case managers and/

or attorneys to individuals who are having difficulty gaining access to health care.

When individuals are diagnosed with cancer or any other serious illness, they need

to devote themselves to fighting the disease and need not be distracted by fighting

for access to the care recommended by their physician. If there is a need to address

access, job discrimination, or debt crisis issues, we are prepared to help with those

matters.

The National Patient Advocate Foundation is an organization that seeks to create

avenues of access through policy and legislative reform that serves as a voice for

those who are seeking access to high quality health care prescribed by treating physicians. Most of our activity is directly related to improving access to care for individuals with cancer. Our advocacy activities are informed and influenced by the information we receive through the counseling and case management activities in the

Patient Advocate Foundation. When we observe trends in the cases we handle—

whether a pattern of denials or an apparent shift in public or private insurance coverage standards—we explore the reasons for the apparent pattern. If appropriate,

we address the underlying policy behind a new or revised coverage decision and

seek to ensure patients continued access to quality care.

It is the work of the Patient Advocate Foundation that brings us here today. In

1998 and 1999, we observed an increased rate of Medicare denials for certain

injectable drugs and biologicals. Individuals who had previously received Medicare

coverage for injectable products were being denied this coverage. Our calls regarding

denials came from individuals with cancer, carcinoid syndrome, acromegaly, and

AIDS, as well as from those who had received organ transplants and those on renal

dialysis.

When we investigated this matter, we discovered that it had been the consistent

policy of Medicare to provide payment for injectable drugs and biologicals if they are

administered in a physician’s office even though they may theoretically be self-administered in some settings. The question of whether they should be considered selfadministrable—and thus not covered by Medicare—had been resolved based on the

‘‘usual method of administration of the form of that drug or biological as furnished

by the physician,’’ according to the Medicare Carriers Manual. Under this provision,

injectable drugs had long been reimbursed when administered incident to physician

services.

Unfortunately, in 1999 HCFA appeared to be considering changes in its policy of

reimbursement for injectable drugs, and a number of carriers had begun to deny reimbursement for injectable drugs. The result for our patients was disastrous. Medicare patients were left with the responsibility to pay for their own medications and

to then self-inject them. This results in decreased quality of care. Injectable drugs

cannot be easily self-administered by elderly or disabled Medicare patients, and

feared their care and health would be adversely affected by a change in HCFA polVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00059 Fmt 6633 Sfmt 6621 E:\HEARINGS\64029 pfrm08 PsN: 64029
56

icy. Our patients affirmed to us how these changes would adversely affect their

health.

We joined with our colleagues in the Cancer Leadership Council to oppose efforts

by HCFA to restrict reimbursement for injectable drugs and biologicals. In addition,

we supported efforts to include a provision in Pub. Law No. 106-113, the Department of Health and Human Services Appropriations Act, to prevent HCFA from restricting coverage for injectable drugs.

We would like to express our thanks to the Congress for its action on this matter.

Regrettably, enactment of § 219 of Pub. L. No. 106-113 did not result in immediate

action by HCFA to clarify with its carriers the policy for reimbursement of injectable

drugs and biologicals, and we again sought the intervention of Congress on this

issue. This Memorandum should temporarily eliminate the reimbursement difficulties our clients have recently encountered. However, we also note that the Program

Memorandum ‘‘may be discarded after September 30, 2000.’’ HCFA appears to be

relying on the technicality that the provision related to injectable drugs was included in an appropriations bill to justify ‘‘discarding’’ the Program Memorandum

at the end of the year. Although we believe the intent of Congress on this matter

is clear, it may be necessary for Congress to revisit this issue before the end of the

fiscal year to prevent disruption in services to Medicare beneficiaries.

We believe the current policy on reimbursement of injectable drugs and

biologicals—the policy announced in the March 17 Program Memorandum—is the

correct one for Medicare beneficiaries and for the program. We urge that HCFA clarify that this policy is a permanent one. We will be joined by the entire cancer community in opposing any change in the current policy for reimbursement of injectable

drugs and biologicals.

Mr. BILIRAKIS. Thank you very much, Ms. Davenport-Ennis.

Let me ask you, do you have an opinion as to why you think

HCFA all of a sudden issued the program memorandum in August

1997 changing its policy on self-administered drugs by virtue of

adding the language ‘‘the individual patient’s mental or physical

ability to administer any drug is not a consideration for this purpose’’? Why?

Virtually all of us raised that question with Mr. Hash. Was anybody satisfied with his response?

Ms. DAVENPORT-ENNIS. I think in response to your question, Mr.

Chairman, certainly we have asked Mr. Hash that question. We

took our entire policy committee in to meet with Mr. Hash shortly

after that policy memorandum was issued. We do not understand

why it was issued, nor why there was that change.

Mr. BILIRAKIS. What has changed, other than—well, I was going

to say other than maybe pressure from Congress? But heck, back

in October we sent that letter forward. What has changed between

when they changed that policy and now all of a sudden on March

17 they decided to go back to that original policy?

The head of HCFA cares about the health of people and reimbursements as much as anyone. Mr. Hash certainly does. We all do

up here. We throw stones at each other, which is very unfortunate,

but I know we all believe that we all care.

I have been really scratching my head, wondering why in the

world would they do this all of a sudden; just pull it out of the air?

Then basically, in effect, they admitted their mistake by changing

it all just last week.

Ms. Story or Ms. Davenport-Ennis, were any of you contacted, or

do you know of any other patient groups who may have been contacted prior to their having issued that August, 1997, PM?

Ms. DAVENPORT-ENNIS. I am not aware that any other group

within the Cancer Leadership Council that we work with actively

were contacted. However, I certainly could not speak with absolute

57

assuredness that they were not. But I have no working knowledge

or recollection.

Mr. BILIRAKIS. Ms. Story, you have no knowledge of that?

Ms. STORY. No.

Mr. BILIRAKIS. Dr. Steinberg, do you have any impression of that,

any idea of any contact that you may have heard?

Mr. STEINBERG. No.

Mr. BILIRAKIS. Mr. Hash said over and over and over again

that—is any representative of HCFA here? Are you taking notes?

Please. I more often than not ask that they stay over to listen to

the other panels, and I appreciate very much HCFA having done

that.

Mr. Hash said that the 1997 memorandum would clarify and

even expand, and he kept referring to expanding, expanding coverage. Does anybody agree with that?

Ms. Rybicki, you of course very painfully described for us how

your physical and mental condition would have kept you from selfadministering the drug, and Ms. Sizemore, with a hell of a lot of

courage and guts, certainly described how her husband would not

have been able to do it.

Frankly, and I say this with HCFA present and with my colleague to my left being here, the phrase that they have thrown in

here regarding not taking into consideration the patient’s mental

or physical ability is what really troubles me I think probably more

than anything else. Where did that come from? I just cannot imagine.

At this point I will defer to Mr. Strickland.

Mr. STRICKLAND. Mr. Chairman, I detected that Ms. Lohrman

may have wanted to say something.

Mr. BILIRAKIS. I am sorry, did you? Please proceed, ma’am.

Ms. LOHRMAN. What they are saying is that they do not want the

bill passed, or the law changed to include injectable drugs, is that

what they are saying? That you don’t want it to where other people

can get this drug?

Ms. RYBICKI. No, that is not what I am saying at all. I am hopefully speaking on behalf of everybody who needs to have it.

Ms. LOHRMAN. I misunderstood her. I was going to say, that

should be up to the doctor and the health care provider.

Mr. BILIRAKIS. Dr. Steinberg made that clear in his written testimony. I missed some of his oral because I had some community

health center people out there who wanted to see me. We have so

much up here in our place.

All right, back to Mr. Strickland.

Mr. STRICKLAND. Thank you, sir.

I was just sitting here listening to your testimony, and a lot of

thoughts came to my mind. A thought, I guess, that was most troubling to me is that we are rationing health care in America today.

I don’t think there is any question about that. We need to face up

to that fact. We need to ask ourselves if that is what we want to

do or want to continue to do, but we are rationing health care.

There are people who need medications who cannot get them,

cannot afford them. That is the state of affairs in America today.

I was also thinking of a quote by Hubert Humphrey who said,

you judge a society by the way it treats those in the dawn of life,

58

the children; those in the twilight of life, the sick and the elderly;

and those in the shadows of life, the disabled and those who are

in most need. Your stories are gut-wrenching.

I say to myself, this is America. We are a rich country, and we

do what we choose to do with our resources. We just simply have

not chosen to provide health care to the people in this country who

need it.

I strongly think we should do what we can to correct this problem that has been brought to us. I think that is a step that we can

take and should take to guarantee you that in September you will

not have to worry about your benefits being eliminated. But I have

a question for Dr. Steinberg.

Dr. Steinberg, we have had some people suggest that we go

back—that HCFA go back to the old rules to cover whatever

injectable drugs HCFA covered before 1997. I wonder, though, if

going back to the old rules is going to resolve the controversy about

self-injectable drugs. Is it conceivable that drugs that are injected

by a doctor today could become for self-injection in the future, or

even in pill form?

Mr. STEINBERG. It is more than conceivable, it is likely. I think

the point that you are making simply highlights the fact that even

sitting around talking about how to define ‘‘self-injectable,’’ it is

sort of a micro issue which hopefully we can do something with,

but it is not the issue, right?

The fact that certain drugs are self-injectable and therefore are

not covered, you know, we are talking about whether this person

can self-inject or that person can self-inject. The reality is that

there are hundreds of other medicines that are oral that may have

as big an impact on patient’s survival or quality of life. We have

not even talked about them today.

This is an anachronistic issue, this self-injectability. As I say, it

is a rare drug that you could not train at least one patient to selfadminister. So if the definition is could somebody do it, well, it

would wipe out coverage for almost any injectable.

Mr. STRICKLAND. So what in your judgment, as a physician, is

the best answer to this dilemma that we face? If you were us—if

you had the power to make a decision to solve the problem, what

would you suggest?

Mr. STEINBERG. I guess I would suggest the following; that if the

Congress, through its legislation, has decided that, at least to date,

drugs that are not self-injectable or drugs that are self-injectable

will not be covered, as I indicated in my testimony, it is not possible for you or somebody at HCFA or anybody else other than the

physician caring for a patient to make an informed judgment as to

whether or not a patient can or cannot safely inject a drug.

So if we have to live within the box related to self-injectability,

I would leave that decision to the physician. But at the same time,

by the same token, I would encourage you to recognize that this is

the micro issue, and the macro issue is that drugs have become an

absolutely essential component of health care today.

It does not make a lot of sense to have a program that is supposed to enable people to get necessary health care and to deny

them access to what may be for them the most critical component.

59

The reason I highlighted chronic disease is that the treatments

for chronic disease tend to be medication. They are not surgery,

they are not hospitalization. Those are treatments for acute disease. But Medicare is supposed to cover acute and chronic disease.

So I guess if I could wave a magic wand, I would make the definition of ‘‘self-administrable’’ up to the physician. If the physician

deemed it self-administrable, then it would not be covered under

this law. But I would urge you to revise the law to make all drugs

available.

Mr. STRICKLAND. Thank you, sir.

Thank you, Mr. Chairman.

Mr. BILIRAKIS. Thank you, Mr. Strickland. It bothers me that

we—do any one of you out there doubt that the entire Congress of

the United States wants to do and will make every possible, honest

effort to include prescription drugs in Medicare?

Mr. Burr.

Mr. BURR. Thank you, Mr. Chairman. I am not sure exactly

where to start. I have a ton of notes I wrote, and probably half of

which I will get to.

Julie, let me just say one thing, I don’t know that I could have

done what you just did. But for that I am very thankful. It sent

me back to visions, Mr. Chairman, of the FDA Reform Act, the

Modernization Act. People have since asked me how we had the

passion to go 21⁄2 years through two different Congresses to accomplish a bill that people said in the beginning could not be done, and

my answer was, it was because of the individuals that came 1 year

to lobby me about the sickness that they had that did not return

the next year, because they had a sense of urgency that we never

figured out then.

Clearly that is the human side, sometimes we forget that not

only do we have policy decisions to make, we have human faces behind the issue to remember, and an urgency that goes along with

it that affects lives, and affects families in ways that many of us

don’t know.

I want to highlight one thing Julie said in her comments. That

was that there was a fear that the actions taken by HCFA, right

or wrong, would be replicated in the private sector. That is a fact.

There is significant history to prove that that is the case. I am not

saying that it is always bad, but it is a statement that you can accept with a great degree of certainty.

If we produce a product that is good, the private sector will replicate a good product. If we produce a product that is bad, that does

not take into consideration all of the things that it should, because

it was the Health Care Financing Administration, the private sector will take the opportunity to replicate that.

I know there is somebody here from HCFA. I will not ask who

they are. I hope they will carry that message back, and I hope they

will also carry the message back that I have heard, and that is that

regardless of how much I think of Mike Hash and Nancy-Ann, I

think that we all agree that what we have heard so far does not

give us a great deal of comfort that we have addressed the problem, whether short-term or long-term.

I would like to be specific on a few questions, if I can.

60

Dr. Steinberg, you said earlier that were we to design Medicare

today, it would have included a drug benefit. I totally agree with

you. I would also add a caveat to that. Were we to design Medicare

today, it would not resemble in any way, shape, or form the model

that we currently have.

Would you agree with that?

Mr. STEINBERG. I have a little more difficulty responding to the

latter part. Clearly I agree with you that drugs would be included.

I guess in order to answer the latter part of the question, I would

have to know a little more specifically which aspects——

Mr. BURR. Let me just use the analogy that I see sort of behind

this issue that we are here on today. Because of technology, we are

trying to make a determination about whether we cover a drug

that technology allows us to self-inject which before was something

we did in a hospital or doctor’s office. Is that a fair observation on

my part?

Mr. STEINBERG. Yes. As I mentioned in my testimony, both oral

and written, I think the current situation, whether it is due to the

Social Security Act or whether it is due to how it has been interpreted, provides perverse incentives to both manufacturers and to

physicians.

As I tried to describe, to have a situation where a manufacturer

reformulates a product that could be administered much more simply one way but it is not covered that way, have them reformulate

it so it can be only administered intramuscularly by a professional

and therefore be covered, that should not be what the effect of a

law is.

Similarly, to have a physician prescribe a second best product

simply because they have to administer it, it is more expensive but

it is covered, that also is a perverse incentive.

So I guess my view is that whatever policies we have should be

policies that encourage innovation, that also encourage I will say

appropriate high quality health care, and some accountability for

that. Because otherwise we could spend every dollar in the country,

but it does not mean it would be well spent.

Mr. BURR. How does the private sector delivery system adapt to

the ever-changing availabilities in medicine, whether they are

pharmaceuticals or devices or techniques?

Mr. STEINBERG. They do it as imperfectly as anybody else.

Mr. BURR. But they do it without congressional legislation forcing it to happen. Is that right?

Mr. STEINBERG. They sure do, but they do it under different

types of constraints. They do it under contractual constraints,

under policy constraints.

For the past 10 years, I have been a member of a national Blue

Cross/Blue Shield medical advisory panel. That panel is the panel

that makes determinations about whether or not drugs, devices,

procedures are safe and effective.

I can tell you that it is a laborious process. It involves a considerable amount of work, and many of the decisions are difficult, oftentimes because the requisite information that one needs to make

those judgments is not available.

The issue of making decisions about new technology is problematic everywhere, and I believe that no matter what system we

61

have, we are still going to have to wrestle with which new technologies are appropriate to use and which are not.

Mr. BILIRAKIS. The Chair would announce that we are now going

into a second round, and the Chair yields to the gentleman from

North Carolina, Mr. Burr.

Mr. BURR. The gentleman from North Carolina would thank the

Chair for letting him lead off this series.

Ms. Story, let me just ask you a very simple question. Were there

drugs and biologics that Medicare paid for in 1997 that after this

memorandum are not reimbursable today?

Ms. STORY. Yes.

Mr. BURR. A lot?

Ms. STORY. A good number.

Mr. BURR. So for anybody that would stand up and say that

nothing has changed, that is misinformed? Would that be an accurate statement?

Ms. STORY. Yes.

Mr. BURR. I tried to be very selective as to how I chose those

words.

Mr. Chairman, I would like to enter into the record a letter dated

February 29, 2000. It was a letter from the Health Care Financing

Administration. It referenced the memorandum.

I think that it is important that—are you familiar with that, Ms.

Story? I think it was from a South Carolina—staff can make that

available.

Mr. BILIRAKIS. Without objection, that will be done.

[The information referred to follows:]

62

63

64

Mr. BURR. What did that letter say?

Ms. STORY. Basically it said that with Interferon, Interferon that

had been covered prior to 1997 was no longer being covered.

Mr. BURR. This is the letter dated February 29, 2000?

Ms. STORY. Yes. That would be correct.

Mr. BURR. What kind of impact does that have?

Ms. STORY. It really means, for a patient that has some form of

cancer that requires treatment with Interferon, that they are not

going to get it.

Mr. BURR. Is that a common drug for the treatment of cancer?

Ms. STORY. Certain kinds of cancer.

Mr. BURR. Certain types?

Ms. STORY. Yes.

Mr. BURR. How does that letter fit with Mr. Hash’s testimony

that nothing has changed?

Ms. STORY. It doesn’t, because it has. After 1997 there were

changes, and our patients are not having drugs covered. They don’t

have access to the drug. They don’t have the money to pay for the

drugs themselves. They don’t have professional care or expertise

that they might need, should it be self-injectable.

Interferon can be a dangerous drug for a patient home alone that

does not know what to look for. They have lost all that, in addition

to all the other losses that they face.

Mr. BURR. Mr. Chairman, I have a lot more, but I don’t know

that it necessarily would achieve any other answers than what I

have heard so far.

My only hope, let me say this to all of the witnesses—I want to

personally thank them for their willingness to come here and share

with us. It is really the intent, I won’t say of this committee but

I will say of this Congress, to figure out, one, how to extend drug

coverage to seniors, because in fact those who say if we designed

it today, it would be part of it, they are right. But I think it is also

time that we try to figure out what the delivery system for health

care for our seniors and for ourselves will look like in the future.

As Julie pointed out, the actions taken by government entities

have a significant influence on the policies of the private sector, of

private sector entities at some point after that.

I am confident that we can get this closer to perfect than many

give us odds on doing, Mr. Chairman, like the FDA. I am convinced

it will not be easy, but I think there are some people who are also

convinced that we are not going to go away until we finish. For

your leadership on that, I am thankful.

I yield back.

Ms. SIZEMORE. May I say something, please? This knowledge

that I learned just this last week of how Medicare decisions can affect the private sector is not something that a lot of people know.

I shared this with my family, I shared it with a man on the plane

flying here, and they were blown away. They could not believe that

that is what would happen.

I hope you all realize that a lot of the American people do not

know this. If they found out about this, I don’t know what their reaction would be, but you would have, I am sure, at your private

offices your phone lines ringing off the hook over this, because it

would affect everyone.

65

But unfortunately, most of the American people do not know that

this could happen. They do not realize it, because they are busy

with their lives.

Mr. BURR. Mr. Chairman, let me just say to Julie, I hope she will

give us a couple months before she tells the other 249 million people, because I think we can accomplish a lot in that period of time.

Mr. BILIRAKIS. If we truly want to, all of us, if we truly want to.

Mr. Strickland.

Mr. STRICKLAND. Thank you, Mr. Chairman. I think I can be

brief.

I had an experience over the last weekend in Columbus, Ohio. I

was eating in a senior citizens center, and an older gentleman told

me that he had just been diagnosed about a year earlier with Parkinson’s disease.

He says, I take six prescriptions. One of my prescriptions costs

over $200 a month. My wife, the only way we can make it is for

my wife to continue to work. I asked him how old his wife was, and

she is 78 years old.

I listened to you talk about cancer and multiple sclerosis and

various illnesses and diseases. I am thinking, we ought not to be

making these kinds of choices. We ought not to be deciding who

gets medicine and under what conditions.

It is true that, if not all of us in the Congress, most of us in the

Congress want a prescription drug benefit under Medicare, but how

we do that is very important, a very important question that needs

to be resolved.

Dr. Steinberg, I just have a question for you that I think I know

the answer to, but I am just wanting to get this on the record. You

work with a lot of people, and some of the people you work with

are poor people. Some of the people you work with are people with

modest incomes, or even people with very healthy incomes.

As a physician, knowing what you know, will a prescription benefit that is targeted only toward low-income people solve the problem that we face in this country, or even the problems that many

people who are represented here at this table face?

Mr. STEINBERG. Absolutely not. What you say is definitely the

case. As I mentioned, I had many patients of modest means, they

would not be considered poor, they would be considered working

class, in East Baltimore who simply did not fill medications, prescription medications, because they didn’t have enough means to do

so. So it is not limited to the poor.

If I could, I would also like to say that, as you all realize, a prescription benefit is not a prescription benefit is not a prescription

benefit.

To just say that we will add a prescription benefit will not necessarily solve any problem. It depends on how that benefit is designed, not just who it is targeted at.

So I would encourage you to understand that for those who are

on chronic medications that they have to fill monthly, that they

are, as we found in our study, spending $5,000, $10,000 a year.

And to give $1,000 worth of coverage to someone who has a need

for $10,000 worth of medication is like saying, we will give you

enough to treat your diabetes, but we don’t have enough to treat

66

your heart failure or angina. And I am not sure we have accomplished a lot in that sort of circumstance.

Mr. STRICKLAND. I represent a district in southern Ohio, an Appalachian district, where the median income for a family of four is

less than $22,000. So you see the dilemma that many of the people

I represent face.

I want to thank each of you for coming here. I want to thank our

good chairman for his leadership. He is a wonderful person to work

with, and I think all of us on this committee value him.

Mr. BILIRAKIS. Thank you very much for that, Ted.

Dr. Steinberg, what you are really saying is that there—anything

we do should have a stop loss attached to it. We can use the term

‘‘catastrophic’’, although we don’t like to use that term, for obvious

reasons.

Is that what you are saying, basically, that there ought to be——

Mr. STEINBERG. I believe there is a need for the high end coverage. There are many ways it could be designed, but my point is

to cap a benefit, as even many private policies currently do, at

$1,000, it does not cut it for somebody who——

Mr. BILIRAKIS. That is something, frankly, and I think Mr.

Strickland knows that, we have been working awfully hard on.

Granted, the process here being what it is, you would like to think

that you can get all of the people, both sides of the aisle, together

in a room and get things worked out, but unfortunately, that just

does not work. So you sort of have to first convince your colleagues

on your side to come up with a position, and then try to share.

Mr. STRICKLAND. Mr. Chairman, most people are not as cooperative as we are.

Mr. BILIRAKIS. Getting back to Mr. Hash’s written testimony,

and he is not here and I hope he does not mind, I certainly don’t

mean to attack him, but it says here in the second page, at the top

of the second paragraph, the top of page 2 of his written testimony,

‘‘Our clinicians at HCFA are concerned that creating such a narrow

exception to the ban on Medicare coverage for outpatient drugs

could create an ethical dilemma for compassionate physicians when

caring for patients who can self-administer drugs but cannot afford

the drugs they need. This approach could compound the current inequities in coverage, and may also create program integrity problems.’’

I don’t disagree with that. But so what, I guess is the question

I ask. On one hand we say we want all prescription drugs covered.

We have had a history of covering some of them.

Are we helping the situation by taking away some of that coverage that has been there, in existence, for all these many years?

I think not. We need to retain that partial coverage, expand upon

it, and improve upon it.

Again, I am having problems—all of us here are having problems

trying to understand the reason for that PM back in August 1997.

Ms. Davenport-Ennis, yesterday’s edition of Health News Daily

quotes a senior HCFA official about the agency’s perspective on

their report policy change. Are you familiar with what I am referring to?

Ms. DAVENPORT-ENNIS. Very.

67

Mr. BILIRAKIS. I will just go ahead and read it: ‘‘the guidance had

clarified that although self-administered drugs are not covered

under Part B, a carrier may choose to provide reimbursement if

such a drug is administered by a physician in order to teach the

patient the correct self-injection procedure.’’

I guess the question is, does HCFA’s view of their program

memorandum satisfy your concerns, or this more recent program

memorandum, if you will, satisfy your concerns, or does it really

raise a fear that they are trying to undermine, and I hate to put

it this way, but to undermine Medicare coverage of injectable

therapies?

I don’t mean that as strictly as it sounds, undermine. But that

is really what has been happening.

Ms. DAVENPORT-ENNIS. I would like to respond with some specificity. I do feel that my concern at reading that today is that once

again it appears that HCFA is saying to their carriers, this is still

a discretionary matter, that you may choose to interpret this the

way you feel is appropriate.

We do not read the law that was passed as being discretionary.

We read it as having very specific instruction for the carrier.

We find over and over again with both the physicians who refer

their patients to us and the thousands of patients with whom we

interact that there seems to be a global plea which is, simply, help

us understand what the rules are, whether they are in the private

health care sector or whether they are in the Medicare sector.

If you will help us understand what the rules are, then we will

have confidence in that and we will feel reassured that if we follow

those rules, then in fact the result will be that we have the coverage we think we have. We continue, since the memorandum of

1997, in all sincerity, to find that the reasonable expectations that

we had as we interpreted the language evaporate from time to

time. We find inconsistencies, depending upon which carrier memorandum we might be reading about which particular product in

which particular State.

So when we read what the Health News Daily had to say yesterday we found it very troubling, because I can see in my office the

phones beginning to ring again with carriers who may in good faith

be trying to follow the direction that perhaps they think is being

reflected in the Health News Daily, only again to maybe issue another memorandum, as the one that was just issued in South Carolina on February 29, that was so troubling and that once again

caused those phones to start to ring.

So it is a huge concern for us. We also, in closing, must say that

when the U.S. Congress looks at any issue that involves health

care, and once you have had thorough hearings on the matter and

you voted it out of committee and you voted it off the House floor

and off the Senate floor, and it becomes a law of the land, within

our organization, I can assure you, we view that law as stout. We

view that law as one that deserves respect from every citizen, every

entity that is being directed by that law.

We have great concern when it comes to a sense on any part that

it is a discretionary matter when the U.S. Congress passes a law.

Mr. BILIRAKIS. That should tell us something.

Mr. STEINBERG. Mr. Chairman, can I comment on that?

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Mr. BILIRAKIS. Without objection.

Mr. STRICKLAND. No objection.

Mr. BILIRAKIS. Please.

Mr. STEINBERG. It seems clear from listening today that the language in the statute, at least to a number of people, is ambiguous.

I would just like to say that anything your committee can do to

clarify what you think that language should mean would take on

the effect of eliminating the problem with discretion or variability

in interpretation.

So I guess I would ask for all the help you can provide to clarify

this.

Mr. BILIRAKIS. And to turn it around, we need your help. We are

an ivory tower. We have probably more physicians maybe in the

Congress than we have ever had. But the truth of the matter is

that we have some practical experience, but not really very much.

Yet, we have to make these very tough decisions. We don’t know

how it is going to affect the patient out there and the medical provider. That is why it is so very important that we do get your inputs to help us out.

Dr. Steinberg and Ms. Davenport-Ennis, particularly you mentioned it, over the years, and you can imagine in my position, I just

cannot even walk by a doctor back home without him stopping me

and complaining about this or that; and Ted gets that, we all do.

But the biggest complaint that we have had is, look, I want to

follow the law. I want to follow the law, but it is inconsistent. We

need some clarification and some consistency on how to file the

claims and the reimbursements.

When my son started his medical practice—he is also an internist—he could not afford any of the computer systems and all that

equipment, and he had the pegboard system which you are probably familiar with. Maybe most doctors start out that way.

It was in January at the beginning of a new Congress, so I had

a lot of time at home. I spent a lot of time in his office working

with the pegboard system, and trying to understand the different

classifications, the coding and things of that nature. My God, what

you all go through, thanks to us.

Well, you are really all wonderful, and the courage, of course, of

Ms. Sizemore, Ms. Rybicki, and Ms. Lohrman, have shown, and of

course the knowledge that Dr. Steinberg and Ms. Story and Ms.

Davenport communicated to us is very valuable.

I like to think that we will address prescription drugs, the overall picture, in time to keep what you are concerned about from happening. I don’t know. But it takes two to tango, and that is a problem.

We might do something. If we don’t, we certainly ought to shore

up this area. I know with cooperation with people like Mr. Strickland and so many others, we are going to do it. Thank you very

much for being here. God bless you.

Again, you are available for any written questions we may want

to offer to you to respond?

Ms. DAVENPORT-ENNIS. Yes.

Ms. SIZEMORE. Yes.

Mr. BILIRAKIS. The hearing is concluded.

[Whereupon, at 2:06 p.m., the subcommittee was adjourned.]

69

[Additional material submitted for the record follows:

RESPONSES FOR THE RECORD OF MICHAEL HASH, DEPUTY ADMINISTRATOR, HEALTH

CARE FINANCING ADMINISTRATION

Question 1. According to your testimony, it was never HCFA’s intent for the August 13, 1997 directive to reduce or limit the Medicare program’s longstanding coverage of professionally-administered injectable drugs. Is that an accurate reading of

your testimony?

Answer: Yes. The August 13, 1997 memorandum was a clarification of the longstanding HCFA policy with respect to coverage for drugs and biologicals that cannot

be self-administered. In fact, the memo emphasized that Medicare claims processing

contractors may cover generally self-administered drugs when a provider is administering the drug in order to teach a patient how to self-administer. We did this to

encourage more coverage in these situations.

Question 2. The Committee heard testimony, however, that a number of professionally-administered injectable drugs which were routinely reimbursed prior to August 13, 1997 were denied coverage after that date. Can you confirm or do you deny

that such has been the case?

Answer: This is possible. Like many specific coverage policies in Medicare’s history, determination of whether a specific drug can be self-administered has been left

up to the medical directors of each claims processing contractor. Instructions to

Medicare claims processing contractors on this issue have been provided through the

Medicare Carrier Manual and were updated in 1995. Those instructions stated that

drugs may be covered only if they ‘‘are of the type that cannot be self-administered.’’

Some carriers expressed confusion over this policy, which may have led to improper

reimbursements. In order to address carrier confusion, we issued a memorandum

clarifying the national guidance in our carrier manual on August 13, 1997.

Question 3. From what the Committee has learned about these denials, the Medicare carriers involved are asserting that their actions to restrict Medicare are a result of the August 1997 transmittal. How do you respond?

Answer: Instructions to Medicare claims processing contractors on this issue have

been provided through the Medicare Carrier Manual and were updated in 1995.

Those instructions stated that drugs may be covered only if they ‘‘are of the type

that cannot be self-administered.’’ Rapid advancements in pharmacolgical and medical developments caused confusion in carriers’ interpretation of Carrier Manual instructions, which may have led to improper reimbursements. The August 13, 1997

memorandum was a clarification of the longstanding HCFA policy in this area. This

memorandum did not increase restrictions on beneficiary access to prescription

drugs. It clarified for carriers the criteria for making drug coverage decisions as required by the Social Security Act.

Many of these types of coverage decisions are left to carriers’ discretion, and we

try to ensure their decisions are consistent with statute. The August 1997 memorandum reminded carriers that according to the way the statute is written, coverage

decisions should be based on the nature of the drug or biological in question rather

than on the capacity of any one individual.

Question 4. It has come to our attention that the Medicare carrier serving South

Carolina—Palmetto Government Benefits Administrators (PGBA)—has informed

cancer caregivers that injections of Interferon for cancer patients will not be covered

unless the carrier is convinced that the injection incident to a physician’s professional services is ‘‘medically necessary. This requirement is in direct contradiction

to the reimbursement process that existed prior to August 1997, and appears to ignore the Program Memorandum issued by HCFA on March 17, 2000. Of even greater concern to the Committee, however, is the statement by a senior officer at PGBA

that HCFA has recommended the carrier adopt and maintain this course of action.

What is your response to this set of circumstances? What will you do to correct the

course of action adopted by PGBA, and when will the Committee be informed of corrective action you will take?

Answer: Any items or services covered by Medicare by law must be medically necessary. Policy relating to medical necessity, as described in section 2049.4 of the

Medicare Carriers Manual, remains unchanged, both before and after the August

1997 memo. Medical necessity determinations are made at carriers’ discretion. Policy relating to the issue of injectable drug types is found in a separate section of

the Medicare Carriers Manual, section 2049.2. The August 13, 1997 memo, as well

as section 219 of the Appropriations Act, only refer to Carrier Manual section

2049.2, and not the section on medical necessity.

Question 5. As you know, the vast majority of my colleagues support the establishment of a broad Medicare drug benefit. However, the case of coverage of profesVerDate 11-MAY-2000 09:42 Oct 03, 2000 Jkt 010199 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 E:\HEARINGS\64029 pfrm08 PsN: 64029
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sionally-administered injectable drugs raises an important issue that must be addressed as we move forward on the broader reform effort. The President’s proposal

to establish a new Part D optional drug benefit specifically excludes the currently

covered outpatient prescription drugs. The current confusion regarding injectable

drugs has raised concerns that, if the President’s proposal were enacted into law,

these drugs would not be covered under either Part B (due to ongoing carrier actions

and the time-limited nature of the March 17, 2000 Program Memorandum) or under

Part D (due to the design of the President’s plan). In the meantime, there are patients who used to have some important injectable drugs covered by Medicare and

now find themselves in a bureaucratic snafu which is leading to denials of coverage.

While Congress and the Administration are exploring the creation of a broad Medicare drug benefit, will HCFA take definitive steps to resolve the problem faced by

these seniors and the apparent confusion of the carriers?

Answer: Under the President’s proposal, prescription drugs would be covered either under Parts A and B or the new Part D. Those that are covered under A or

B would retain such coverage to the extent that the benefit has not expired, at

which point Part D would pick up the coverage. Those drugs that are not covered

under Parts A or B would be covered under Part D.

We believe that all prescription drugs would be covered and no one would be

‘‘caught in the middle.’’ We are holding a series of town hall meetings on the issue

of injectable drugs. When the restrictions included in the FY 2000 Appropriations

Act expire, we plan to publish a proposal in the Federal Register offering several

different options for determining ‘‘self-administered,’’ including options which take

patient characteristics into account. When finalized, this definition would serve as

a basis for determining coverage under Part B versus Part D.

Question 6. The March 17, 2000 Program Memorandum advises carriers to discard

it after September 30, 2000. This statement suggests to many of us that it may be

HCFA’s intent to restrict Medicare program’s longstanding coverage of professionally administered injectable therapies after that date. What do you think will

happen to seniors and people with disabilities who depend upon Medicare coverage

of these drugs after September 30, 2000? In light of the continuing action taken by

Palmetto Government Benefits Administrators and other carriers, will HCFA amend

the Program Memorandum to make permanent the current ban on the restriction

of this coverage? If not, then why?

Answer: Rather than amend the Program Memorandum, we would like to pursue

the issuance of a proposed rule to solicit public comment on the definition of the

term ‘‘self-administered’’ to solicit input from the broadest possible range of stakeholders. We attempted this previously, but postponed the proposal out of concern

that we not appear to violate the appropriations language, In lieu of a broader solicitation through the Federal Register, and as instructed in the Appropriations Act

conference report, we are scheduling town hall meetings to allow interested parties

to discuss this issue and available options. The first meeting is set for May 18th

in Baltimore. The information collected during these town hall meetings will provide

HCFA with guidance in considering future steps on this topic that was in effect before the August 1997 memorandum.

Question 7. Included in your final rule on Medicare’s Prospective Payment System

for Hospital Outpatient services (HCFA-1005-FC) issued on April 7, 2000, you state

‘‘Drugs that can be self-administered are not covered under Part B of Medicare.’’ Yet

in section 219 of the Consolidated Appropriations Act of 1999, Congress directed

HCFA to continue Medicare’s coverage policy that was in effect prior to August 13,

1997, which covers drugs usually administered incident-to a physician’s services. Do

you view your March 17 Program Memorandum issued to implement section 219 of

the Consolidated Appropriations Act of 1999 as consistent with the statement in the

April 7, 2000 final rule?

Answer: The Prospective Payment System for Hospital Outpatient services final

rule states ‘‘Drugs that can be self-administered are not covered under Part B of

Medicare (with specific exemptions for certain oral chemotherapeutic agents and

antiemetics, blood-clotting factors, immunosuppressives, and erythropoietin for dialysis patients).’’ This statement is consistent with the current Medicare payment

policy.

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