Dialysis Boondoggle

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I wrote earlier about how one company managed to get a bonus slipped into the Fiscal Cliff bill.  One that “made them” $ ½ billion.  Well, they are about to take a big hit, if no one tries to overrule Medicare (or slip another ‘mickey’ to the American public in another bill).

Medicare has been reimbursing dialysis clinics for a series of drugs, using the dosages that were normal some 5 years ago.  Before the dosages were lowered to reflect the true usage, the true needs of the patients.  Not to mention the extra bonuses provided those same clinics for using the elevated doses.   How much money are we talking about?  Not much- just $ 880 million…a year!

In 2011, Medicare removed those bonuses I mentioned above (oh, wait, they were called “incentives”).  No more would these drug companies (don’t worry- I’ll name some names below) be able to increase its sales at the expense of American taxpayers- and to the detriment of dialysis patients. (Some of the side effects associated with these higher dosages- cancer, strokes, heart attacks.)  These drugs, used to treat anemia, get reimbursed via Medicare to the tune of about $ 3 billion a year.

GAO finds overpayment for dialysis drugs

The GAO (Government Accountability Office) published a report on 7 December 2012 stating the overcharges – based upon existing usage, not some fairy tale level that no longer applies- are at least $ 650 million.  But, they probably go as high as $ 880 million.  And, that class of anemia drugs (erythropoiesis-stimulating agents (ESA), intravenous (IV) iron and IV vitamin D).  All three were incorporated into the bundled payment rate in 2011-  at 23% lower usage rates than 2007, which was used as the reimbursement calculation date.   All three of these drugs comprise at least 2/3 of that total overpayment.  The three drugs in mind are made and marketed by Amgen.

The problem is that, once established, the rates couldn’t be reset until next year.  The way it works is the reimbursement rate needs to be published in June and then made final in November. Medicare told the GAO that they lack the authority from Congress to change the dialysis “bundled” rates now.  Except that “fiscal cliff” bill- it also ordered Medicare to “make reductions” in the rates paid based upon the real, current usage.

What one Congressman slippeth into a bill can be negated by what another one doth insert.

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4 thoughts on “Dialysis Boondoggle”

    1. Shawn, this is related to the fact, in my opinion, that our government “of the people, by the people, and for the people” now considers only those people that line their pockets. And, they don’t call them bribes, they call them lobbyists!

  1. Then, these forced reductions in Medicare are actually a good thing for the taxpayer but some congressmen are spinning it so that it appears that any correction to Medicare will hurt the retiree and they will lose benefits. Is that what I am reading here?
    Chef William recently posted..Cumin

    1. Well, Chef William, there’s a few facts to be considered here.
      The “Medicare cuts” being bandied about are NOT related to service cuts to recipients. They are cuts in payments to vendors, such as the ones I mentioned in this blog- and you heard about. A cut in services could be a bad thing; a cut inn overpayments, on the other hand, is only bad for those who have enjoyed the fruits of their shenanigans!

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