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					Paul F. Haas PhD
Chair of the Board
Bowling Green, OH

Ray Stanhope
Vice Chair of the Board             July 12, 2005
Sugarland, TX
                                    Mark McClellan, M.D., Ph.D.
Rita R. Gonzales
                                    Administrator, Centers for Medicare and Medicaid Services
Secretary of the Board
The Switchboard                     U.S. Department of Health and Human Services
Houston, TX                         Hubert H. Humphrey Building
                                    200 Independence Avenue, S.W., Room 445-G
Michael C. Self                     Washington, D.C. 20201
Treasurer of the Board
Self & Bhamre
Newport Beach, CA                   RE: CMS 1325-P: Medicare Program Prospective Payment System
                                    and Consolidated Billing for Skilled Nursing Facilities for FY 2006
Clifford Blair Cohn, Esq.
Cohn & Associates                   Dear Dr. McClellan:
Philadelphia, PA

Kathleen Gerus-Darbison             I am writing in response to the May 19, 2005 proposed rule for FY 2006
Macomb Community College            Medicare prospective payment and consolidated billing for skilled
Macomb, MI                          nursing facilities (SNFs). The National Hemophilia Foundation (NHF) is
                                    the largest health care advocacy organization serving the needs of
Arthur Herman
                                    individuals with bleeding and clotting disorders. These comments are
Canton, GA
                                    focused on persons with hemophilia, von Willebrand disease, and other
Elizabeth Kallberg                  bleeding disorders who require the use of blood clotting factors.
Prior Lake, MN
                                    BACKGROUND
Carol Kasper, MD
University of Southern California
Los Angeles, CA                     Hemophilia and other bleeding disorders occur when any one of several
                                    essential proteins necessary for clotting is missing. Without treatment,
Steven Koch                         individuals with a bleeding disorder may bleed internally, which can be
University of Houston               fatal or can severely damage joints. Although there is no cure, there is
Houston, TX
                                    effective treatment. Clotting factor, derived either from human plasma
Phillip Kucab                       or manufactured through recombinant technology, is infused to
University of Michigan              compensate for the missing protein. Persons with bleeding disorders
Ann Arbor, MI                       generally are taught to self-infuse clotting factor and manage bleeds at
                                    home, in order to treat the bleed as soon as it occurs and minimize
Kenneth G. Mann, PhD
                                    complications.
University of Vermont
Burlington, VT
                                    Most Medicare beneficiaries with a bleeding disorder are eligible for the
Richard Metz, MD                    program due to the severity of their disease and its complications.
Los Angeles, CA                     These complications include joint damage from a history of frequent
                                    bleeds, as well as HIV/AIDS and hepatitis B and C, which were
Michael O’Connor
Mesa, AZ                            transmitted through contaminated blood products in the 1970s and
                                    1980s. Approximately 1,100 individuals with a bleeding disorder
Susan Shurin, MD                    receive Medicare benefits.
Case Western Reserve University
Cleveland, OH

Alan J. Kinniburgh, PhD
Chief Executive Officer
MEDICARE PAYMENT FOR CLOTTING FACTOR

Clotting factor is covered under Parts A and B of the Medicare program. In the hospital
inpatient setting, separate reimbursement is made for clotting factor above and beyond
the diagnosis related group (DRG) payment. This payment rate currently is 95 percent
of average wholesale price (AWP). For 2006, the Centers for Medicare and Medicaid
Services (CMS) has proposed setting the reimbursement rate for clotting factor used in
the hospital inpatient at the same rate as for Part B drugs.

Like most other Part B Medicare covered drugs, payment for clotting factor used in the
home transitioned to a new formula, beginning January 1, 2005, as a result of
provisions in the Medicare Modernization Act (MMA). The new formula is average sales
price (ASP) plus six percent. Under the new rules, providers of clotting factor also are
paid an additional administrative, or furnishing, fee to cover the costs of providing the
product to Medicare beneficiaries. The Secretary of Health and Human Services set this
fee at $0.14 per unit for 2005 and is required to update the fee annually.

Clotting factor is reimbursed in the hospital outpatient setting under the outpatient
prospective payment system for drugs and biologics. For 2005, this payment must fall
within the MMA-mandated range of 83 to 88 percent for sole source drugs. CMS has
not yet announced the payment methodology for hospital outpatient drugs for 2006.

PAYMENT IN THE SKILLED NURSING FACILITY

In the SNF setting, clotting factor is included, or bundled, into the Part A prospective
payment rate for Medicare beneficiaries requiring skilled care following at least a three-
day hospital inpatient stay. Currently, there is no separate payment for clotting factor
used by beneficiaries during a Part A SNF stay.

Medicare does pay separately for clotting factor provided to beneficiaries in a Part B
SNF stay (i.e., beneficiaries who have not been discharged from a hospital stay, but
require skilled care for other reasons). For these beneficiaries, reimbursement is made
either to the rendering provider or to the SNF under arrangement using the Part B
payment methodology.

This policy creates a two-tiered system of coverage for clotting factor in the SNF,
resulting in hampered access and potentially disrupted care for Medicare beneficiaries
with hemophilia or other bleeding disorders who require skilled nursing care following
hospitalization. SNFs routinely deny admission to Medicare beneficiaries with
hemophilia or other bleeding disorders to avoid incurring huge financial losses that
otherwise would occur due to the lack of separate Part A SNF payment for clotting
factor. This impaired access to appropriate care significantly impacts outcomes and
quality of life for these patients.

The principal reason why a Medicare beneficiary with hemophilia or a bleeding disorder
may require skilled care following hospitalization is to facilitate coordinated recovery
from trauma or surgery, or rehabilitation after a debilitating illness. Follow-up treatment
with clotting factor for these patients can easily exceed $10,000 or more a day, well
beyond the prospective payment provided by the Medicare program for even a high-
level SNF stay. Given the extraordinary costs associated with providing clotting factor, a
SNF could never be made "whole" under the SNF prospective payment system.
Moreover, the rarity of SNF admissions of beneficiaries with hemophilia or a bleeding
disorder assures that these costs cannot be equitably averaged over all SNFs

If a physician is unable to coordinate a Part A SNF stay for the beneficiary, then other
settings that provide separate payment for clotting factor must be considered. These
options may include extending the hospital inpatient stay, locating a temporary assisted
living accommodation (if such an arrangement is viable and available, which often is not
the case), or sending the patient home. These options provide neither the optimum
setting nor the level of coordinated skilled care needed for a successful recovery.
These options may also place inappropriate demands upon family caregivers who may
be forced to coordinate a multitude of services for their loved one.

REQUEST

The National Hemophilia Foundation is requesting that CMS separately reimburse for
clotting factor administered to Medicare beneficiaries during a Part A SNF stay, in the
same manner as is available for these products in the hospital inpatient and Part B SNF
setting. This change in policy is consistent with the rationale for the present separate
payment for Part B SNF and ensures adequate access and safe care regardless of
setting for these patients when skilled care or rehabilitation is required. If CMS does not
believe that it has the authority to make this change through the regulatory process,
NHF requests CMS’ support for efforts to obtain statutory authority to do so.

I appreciate your attention to this matter of great importance to persons with hemophilia
and other bleeding disorders who are dependent upon these life-sustaining products.
Please contact Glenn Mones, NHF’s Vice President for Public Policy, at 212-328-3755 if
you have any questions regarding this request, or need any additional information.

Sincerely,




Alan J. Kinniburgh, Ph.D.
Chief Executive Officer