Recombinant Erythropoietin Payment Options For Medicare PDF Download

OTA was asked to evaluate alternative payment policies that Medicare might use to pay for recombinant erythropoietin. The report idenfied nine options and analyzed their implications across several dimensions: quality of care, access to care, costs and efficiency, equity, technological innovation, and administrative feasibility. Extending coverage to self-administration of the biologic would improve access to care, but would raise expenditures of the Medicare program. Setting payment rates to encourage providers to engage in further research would raise Medicare expenditures in the short term and might merely only transfer research costs from the manufacturers to the Medicare and its beneficiaries. Paying providers according to a fee schedule contains moderate incentives encouraging use, with implications for expenditures and the quality of care. These drawbacks can be adressed, however, by judiciously setting the level of payment and by monitoring use. Of the options for paying the product through competitive bidding is likely to result in the lowest price for Medicare and the lowest expenditures for the program and its beneficiaries.