PRACTICE RESOURCES > Regulation/AUA Positions, Letters, and Talking Points > HCFA Regarding Medicare Reimbursement of Cancer Drugs

HCFA Regarding Medicare Reimbursement of Cancer Drugs

September 15, 2000

Ms. Nancy Ann Min DeParle
Health Care Financing Administration
Department of Health and Human Services
200 Independence Ave, SW
Washington, DC 20201

Dear Ms. DeParle:

On behalf of the American Urological Association (AUA), I am writing to express our serious concern about the Health Care Financing Administration's (HCFA) recent action to exclude Lupron from the list of cancer therapies exempt from the proposed reductions in average wholesale price (AWP). We cannot understand how a therapy used to treat approximately 100,000 Medicare beneficiaries with advanced prostate cancer could be omitted from the list of exempt cancer drugs.

Prostate cancer is an extremely common malignancy, and the Medicare male population is especially vulnerable. Eighty percent of men with prostate cancer are over 65, and over 30,000 men will die this year of this terrible disease. For men with advanced prostate cancer, suppression of the production of testosterone, the hormone the fuels the growth of prostate cancer, is the only treatment available. Lupron is one of the drugs in use today to treat this condition.

The AUA does not feel that HCFA has properly documented their method or rationale for departing from the long established and accepted means of determining the AWP for drugs. We are concerned that the process for determining which 17 of the 49 original drugs are exempt from the new AWP is arbitrary. First, Lupron is a cancer treatment, just like the oncology products that will be exempt. We see no reason to treat it differently, nor has HCFA made the case for the distinction. Second, we believe that the discrimination against the most commonly used treatment for the most common, non-skin cancer among Medicare aged men is inappropriate. Prostate cancer patients have just as much need for treatment as do other cancer patients. Third, virtually no one has had an opportunity to review the data that underlies the HCFA decisions. Until full and public review has been completed, none of these data should be used. Fourth, the carriers will apparently have the option to use this AWP data at their judgment. This could lead to a patchwork of pricing schedules throughout the country, rendering the value of a man's Medicare benefit subject to the whim of a carrier medical director. This is patently unfair to beneficiaries who have a right to expect that the Medicare benefit in one state will be the same as in any other state.

We believe that this process has been arbitrary from the outset, but this latest action compounds the original problem.

The letter to Congress and the program memorandum do not address any of the questions raised by AUA representatives at a July 31 meeting on this issue with Dr. Robert Berenson. The AUA expressed concern that the policy was not fair because only a selected number of drugs covered by Medicare were targeted. We do not believe HCFA should pick and choose among AWP values at its convenience. We were also concerned that information about the specific details of the policy and its implementation were not easily obtainable. It seemed clear from our meeting that HCFA did not want to commit to its plan until there was further review of the potential impact any drug pricing change could have on patient access and the provider community. We have seen no evidence that such a review has taken place.

We understand that the exclusion of 17 of the clinical oncologists' frequently used cancer chemotherapy drugs from the proposed reduction in AWP is to compensate oncologists for their current inadequate practice expense reimbursements. We feel this concept is flawed. The AMA Relative Value Scale Update Committee (RUC) and Practice Expense Advisory Committee (PEAC) are the multispecialty physician panels created and charged with making recommendations to HCFA about the costs associated with providing medical services. If there are concerns about the practice expense payments for chemotherapy administration codes, HCFA should refer the issue to the RUC/PEAC for review of the costs associated with providing these services. Reimbursement for the costs of the actual cancer chemotherapy drugs administered in physician offices is a separate and unrelated issue which in our view should not be mixed with or confused with physician practice expenses.

Moreover, the AUA is concerned that the Medicare prostate cancer patient could be negatively impacted by this proposal. We have seen no evidence that HCFA has studied whether patient access to these drugs will be compromised under this plan. The proper step for HCFA now is to ensure that all cancer therapies are treated equally and to be sure that a serious effort is undertaken to determine the appropriate reimbursement level for all cancer care.

We appreciate your consideration of our views, and look forward to your response. If you have any questions, or would like to discuss this issue further, please contact Robin Hudson, Manager of Regulatory Affairs, at 410-689-3762 or


Irwin N. Frank, MD, F.A.C.S.
American Urological Association

cc: Michael Hash, HCFA Deputy Administrator
James G. Hoehn, MD, RUC Chair
Willard Moran, Jr., MD, PEAC Chair
Mike Pretl, AUA Legal Counsel


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