Cuts in Medicare reimbursements can significantly reduce unnecessary care, according to a study conducted by university researchers and published in the New England Journal of Medicine.
Study authors from the University of Michigan, University of Florida and University of Texas Medical Branch in Galveston analyzed Surveillance, Epidemiology and End Results-Medicare (SEER-Medicare) data on nearly 55,000 men who were treated for prostate cancer. Their research showed that when Medicare reimbursements were cut for the prostate cancer hormonal treatment androgen deprivation therapy (ADT), the instances of inappropriate use declined from 39 percent to 22 percent over the course of the two-year study.
The study was conducted on data gathered between 2003 and 2005, directly following cuts initiated by the Medicare Modernization Act of 2003 that modified reimbursement rules for injected medications. During that period, reimbursements for ADT decreased to $176 per dose from $356 per dose.
The hormone treatment in combination with radiation therapy has proven beneficial for men with high-risk tumors, according to researchers. But its value is uncertain when used by itself in men with lower-risk tumors. ADT has also been linked to some potentially harmful side effects, including skeletal fracture and an increased risk of cardiovascular disease.
"We found that ADT was often overused in men with low-risk cancer who could be managed more conservatively with active surveillance," said Scott Gilbert, M.D., assistant professor of urology at the University of Florida College of Medicine and study co-author. "There are certain situations where ADT hasn't been shown as beneficial in increasing patient longevity."
For purposes of the research, patients were categorized based on the characteristics of their condition and whether the treatment they received was considered as appropriate, discretionary or potentially inappropriate. Given the high number of "inappropriate" cases identified, questions regarding the financial benefits for placing a patient on ADT arose.
Prior to the cuts, Medicare reimbursement for ADT was set at 95 percent of the average wholesale price of the drug with the average practice securing the drug for 82 percent of the average wholesale price, creating significant margins for many providers. At its peak, 500,000 men were receiving the therapy, which accounted for more than $1 billion in Medicare expenditures.
"There is very good evidence that a lot of practices profited very well from the use of ADT, Gilbert explained. "Almost 40 percent of income in some cases came from the use of this drug."
The study's authors believe there is a larger message in the research of how healthcare policy can address overutilization of healthcare services. "A reduction in very lucrative reimbursement practices for services that have mixed applications can reduce unnecessary use without reducing effective use in cases that are warranted," said Gilbert.
He noted that with even cuts in reimbursement, there was no substantial reduction in the number of cases in which the drug was given in appropriate cases. "But there was a substantial reduction—approximately 30 percent—in cases where there was concern that the drug might be overused." Gilbert said.