CHI Commends Congressional Call for Action on Medicare Reimbursement; Reps. Dreier and Eshoo Lead Effort To Fix Flawed Reimbursement System.

Business Editors/Health/Medical Writers

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LA JOLLA, Calif.--(BUSINESS WIRE)--June 19, 2003

As Congress debates a Medicare prescription drug coverage plan this week, Congressman David Dreier (R-Glendora) and Congresswoman Anna Eshoo (D-Palo Alto), with support from 30 additional members of the California Congressional Delegation, called on Chairmen Bill Thomas (R-Bakersfield) and Billy Tauzin (R-Louisiana) and ranking Democrats on the House Ways & Means and Energy & Commerce Committees to fix the deeply flawed Medicare reimbursement of drugs, biologics and medical devices under the Hospital Outpatient Prospective Payment System (OPPS).

"Biomedical research conducted here in California plays a critical role in the development of medical treatments for ailments ranging from heart disease to cancer and Alzheimer's," Dreier said. "Cutting the reimbursement rates for these therapies has put Medicare patients in danger of losing access to these lifesaving innovations. My bipartisan California colleagues and I are committed to seeking a resolution to this problem. We thank the California Healthcare Institute for the attention they are bringing to the issue."

"The Medicare reimbursement system needs to be reformed," Eshoo said. "When reimbursement rates for vital therapies are cut, patients across the country are denied access to life-saving medical technologies. The collective genius of the biomedical community and what they've brought forward must be protected and I pledge to do just that by fighting for fair payments for these therapies."

"California's biomedical innovators and the patient community we serve, commend California's Congressional leaders for taking action to ensure Medicare beneficiaries have access to the latest and most appropriate treatments," said Cristin Lis, vice president of public policy for the California Healthcare Institute (CHI). "Congress is taking significant steps toward establishing a new drug benefit for seniors. However, it's absolutely critical that legislators also address the CMS administrative rule that prevents patients from receiving the most advanced drugs and biologics. Thirty-two members of the delegation have made a bold statement that a legislative remedy is needed to fix CMS policies on hospital outpatient reimbursement and secure the availability of existing and future medical breakthroughs for older Americans."

At issue is the way the Centers for Medicare and Medicaid Services (CMS) reimburses for the limited medicines now covered by Medicare. Using a fundamentally flawed methodology for calculating reimbursement rates, CMS cut payments for many drugs so dramatically that hospitals may no longer continue to provide them. Furthermore, by redefining a whole category of medicines called "radiopharmaceuticals" which includes many life-saving cancer treatments, as not drugs, the CMS policy will limit access to these crucial treatments, against the intentions of Congress. For Medicare patients suffering from rare diseases, CMS adopted new criteria for the vast majority of FDA-designated orphan drugs, severely reducing patient access to these important therapies. Finally, the new "functionally equivalent" standard applied by CMS sets an extremely troubling precedent that will result in less medical innovation. The new CMS rule mandating all of these changes was implemented Jan. 1, 2003.

To view the letter Reps. Dreier and Eshoo sent to Chairmen Thomas and Tauzin on this issue, visit www.chi.org. CHI represents more than 225 leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. CHI's mission is to advance responsible public policies that foster medical innovation and promote scientific discovery.