An Unintended Consequence of the 21st-Century Cures Act for Patients With Heart Failure
Most of the discussion after the passage of the 21st-Century Cures Act has focused on the law’s increased funding for biomedical research and its more controversial changes to drug and device approval. Little attention has been paid to the legislation’s changes to reimbursement for home infusion drugs. However, this less publicized aspect may ultimately limit patient access to home inotropic infusions, which are associated with decreased hospital admissions, lengths of hospital stay, and total spending for patients with advanced heart failure.1
The epidemiology of heart failure is changing and with it the epidemiology of home inotrope use. Patients are living longer with heart failure, now often not requiring advanced therapies, until they have become medically ineligible for ventricular assist devices or transplantation. At the same time, hospitals are facing increasing pressure to decrease lengths of stay and readmission rates. Home inotropic infusions can offer a practical solution to both challenges. As a result, the recent diffusion of home inotropic drugs, which include dobutamine or milrinone, has increased. Between 2010 and 2014, a 63% increase occurred in the number of beneficiaries receiving home milrinone and a 44% increase in the number receiving home dobutamine. As a result, in 2014, Medicare spent $243 million ($64 152 per beneficiary on average) for home milrinone, an increase of 55% from 2010 and $3.8 million ($848 per beneficiary on average) for home dobutamine, and an increase of 57% from 2010 (Figure).
The Cures Act changes the reimbursement methodology for all home infusion drugs, including home inotropes, covered under the Part B durable medical equipment benefit from an average wholesale price minus 5% method to an average sales price plus 6% method. Practically, this means that the reimbursement for some drugs will increase, but most will decrease. The net effect is an ≈$660 million savings to Medicare over 10 years, much of which will be achieved by a substantial decrease in home milrinone reimbursement.2
Why is milrinone reimbursement so significantly affected? In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act made this same reimbursement change (going from an average wholesale price minus 5%method to an average sales price plus 6% method) to almost all Part B drugs. At the time however, the law exempted a few drugs, including home milrinone. As a result of the exemption, Medicare’s reimbursement for home milrinone was locked in at the 2003 average wholesale price minus 5%price. Since milrinone became generically available, however, home infusion companies have been able to acquire it for 1/20th the amount Medicare is reimbursing, creating substantial profits.3 This overpayment is what the Cures Act aims to correct.
Although initially this idea sounds wonderful, it is not quite so simple. During the last 15 years of overpayment, home infusion companies used much of those monies to cross-subsidize other necessary services that Medicare did not cover. These unreimbursed professional services include drug compounding, drug delivery, equipment maintenance, and patient education. For office-based infusions, they are separately reimbursed. No such provision has ever existed for home infusions. Drastically cutting milrinone funding without making allowance for these necessary but otherwise unreimbursed professional services risks a significant financial shock to the home infusion industry, the ramifications of which are unknown.
Fortunately, it turns out that the Cures Act finally creates a separate provision for the reimbursement of home infusion professional services. Unfortunately, this section of the bill does not go into effect until 2021. This leaves a 4-year gap and does little to minimize the financial impact of the change in this short term. During the next 4 years, home infusion companies will have their most lucrative drug’s reimbursement cut by 92% (from $64 152 to $5403 per beneficiary per year) and simultaneously be responsible for an estimated cost of $120 per day per beneficiary ($43 800 per beneficiary per year) in unreimbursed professional services.4 Large, diversified companies may be able to withstand the financial shock, whereas other, smaller providers may not.
At present, the home infusion industry is highly fragmented with a few large, national companies covering ≈25% of the market and the remainder supplied by some 800 to 1000 smaller, independent businesses.5 One potential outcome of these economic changes is that some smaller home infusion companies, many of which are likely in rural and underserved areas, may not be able to continue supporting home inotropic infusions financially. This could result in some patients losing access to home infusion services temporarily or permanently.
In the long run, these economic changes may not all be bad. Price corrections such as these are a necessary part of efficient market functioning. However, in the short term, a shrinking number of suppliers may impact patient access and have farther reaching effects to the healthcare system. Even if larger companies ultimately move into these areas and fill the market gap, there would almost certainly be significant disruption in home inotropic service. Without access to home therapy, many patients with advanced heart failure may face longer and more frequent hospital stays, expensive rehabilitation hospitals, or the loss of therapy. Despite Medicare’s projected savings, contraction of the home infusion industry may paradoxically increase spending as inpatient and long-term acute rehabilitation hospitals see increased lengths of stay and higher admission and readmission rates.
We believe that the ultimate solution is to create a rational reimbursement system for home infusion drugs, where all necessary drug and service costs are appropriately identified and reimbursed fairly. Until then, attention must be paid to the next 4 years. It is important to remember that although this change most significantly impacts home inotropic therapy, the larger issue of access to home infusion services affects patients with rheumatological, dermatological, neurological, and many other diseases. Ways to expedite enactment of the Cures Act’s professional services provision or creation of a new stop gap measure should be explored. Until a solution can be reached, we must all remain alert to unintended consequences of this change, for both our patients’ health and well-being and the costs to our system.
The authors acknowledge Drs Haiden Huskamp and Sharon-Lise Normand for their mentorship and guidance in the writing of this article.
The opinions expressed in this article are not necessarily those of the editors or of the American Heart Association.
Circulation is available at http://circ.ahajournals.org.
- © 2017 American Heart Association, Inc.
- 2.↵Direct spending and revenue effects for H.R. 34. Congressional Budget Office. https://www.cbo.gov/sites/default/files/114th-congress-2015–2016/costestimate/hr34.pdf. Accessed June 3, 2017.
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- 5.↵Harris Williams and Company. Home Infusion Industry Overview. http://www.harriswilliams.com/system/files/industry_update/2014.6.24_home_infusion_industry_overview.pdf. Accessed June 3, 2017.