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Payment system hit for dialysis

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The Medicare payment system for dialysis drugs encourages doctors to prescribe aggressive dosing levels that can lead to heart attacks and strokes in kidney patients, lawmakers said yesterday.

Federal regulators are walking a tightrope when deciding policy on treating dialysis patients with anemia drugs. Several recently released studies show an increased risk of heart attacks, strokes and death when anemia drugs, such as Amgen's Epogen and Johnson & Johnson's Procrit, were taken in high doses. However, some fear changing the reimbursement policy may lead doctors to underdose for the drugs, which can lead to dangerous blood transfusions and sicker patients.

"The current Medicare reimbursement system creates incentives for higher dosing of anemia drugs, which lead not only to health risks but also come at a higher cost to taxpayers," said Rep. Pete Stark, California Democrat and chairman of the House Ways and Means healthsubcommittee, which held a hearing on the issue yesterday. "The payment system leads to perverse incentives that we cannot ignore."

Medicare, the government health system for the elderly, currently covers dialysis services for close to 400,000 patients. Kidney disease is the only condition forwhich the federal government will pay for all ofa patient's medical costs. The medications are the biggest single expense in the Medicare health plan: Last year, Medicare spent more than $2 billion alone on Epogen, made by biotechnology giant Amgen.

Improper dosage levels for anemia drugs and the significant health risks associated with the drugs have been a concern for several years. Nine years ago, the first article showing the risks of anemia drugs to dialysis patients appeared in the New England Journal of Medicine. In 2005, the Food and Drug Administration took its first step to address the issue by adding new labeling to Epogen and other anemia drugs warning doctors to prescribe the drugs at the lowest appropriatelevel.

The FDA recommends that a kidney patient's red blood cell count should not exceed 12 grams per deciliter. However, because Medicare reimburses on a monthly basis, the agency in charge of the program recommends the hemoglobin level for a patient climb no higher than 13 grams. According to Mr. Stark, DaVita, a large dialysis firm, set its hemoglobin target level at 15 grams.

"We view current Medicare monitoring policy as somewhat out of sync with where the FDA is and where the mainstream medical community is," said Kris Robinson, executive director of the American Association of Kidney Patients, a nonprofit organization in Florida that represents kidney patients.

Patient advocates and renal physicians say Medicare should bundle drug payments with reimbursement for other services at dialysis clinics. Currently, the system pays separately, but lawmakers have been considering switching the policy for years.

"Bundling the payments together would remove incentives for overtreatment," said Ajay Singh, director of dialysis services at Brigham and Women's Hospital in Boston.

Leslie Norwalk, administrator of the Centers for Medicare & Medicaid Services, where the reimbursement policy is set, said the primary risk with a bundled payment system is underdosing patients with anemia drugs.

A change in the federal payment policy for anemia drugs would disproportionately hurt Amgen, based in Thousand Oaks, Calif. Amgen released data yesterday showing that doctors have cut back their prescription amounts for Epogen since 2005, when federal dosage requirements were modified. The move is being viewed as a pre-emptive maneuver to head off any congressional effort to further reduce dosage requirements.

"Based on the best available scientific evidence and utilization data, there does not appear to be a compelling policy or clinical rationale to immediately make fundamental, untested changes to the dialysis payment system," said Josh Ofman, Amgen's vice president for reimbursement.

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