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CMS Needs to Address Medicare Underfunding in 2017 Hospital Inpatient Rule for Bone Marrow Transplantation
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CMS Needs to Address Medicare Underfunding in 2017 Hospital Inpatient Rule for Bone Marrow Transplantation

Jeffrey W. Chell, MD
The Be The Match Registry has seen phenomenal success with bone marrow and umbilical cord transplants. After having overcome donor availability, it is now important for CMS to create standardized reimbursement policies for the procedure.
Inaction for Inpatients

Not only do 90% of all HPC transplants take place in the inpatient setting, but the reimbursement deficits exceed those of outpatient facilities. On this front, the numbers are notable. As illustrated in Figure 2, the Medicare base reimbursement rate was surpassed by average hospital organ acquisition charges in 2015,8 which means that Medicare has not historically paid enough to cover the costs of procurement. Hence, each additional dollar that the hospital must bill for the transplantation itself contributes to a net loss. Cost-reimbursement deviations are even greater at the state level. In Georgia, for instance, hospitals performing cord blood transplants are already $10,652 in the hole even before admitting a patient. This number is higher in places like Rhode Island, where inpatient facilities are $21,540 in the red before treatment begins. Still, this begs the question: how much does a transplant typically cost?

The actual scale of unreimbursed expenses is significant. As illustrated in Figure 3, the average reported hospital charge for an HPC transplant in 2015 was $399,019, while the Medicare Severity Diagnosis Related Group (DRG) 14 base reimbursement was $64,452—a difference of $334,567.8 Those managing hospital finances would rightfully scoff at such an imbalance. Despite being potentially detrimental for patient access, many medical facilities are understandably assessing the sustainability of performing future transplants. Such uncertainty, however, could be eliminated via common-sense, comprehensive action, as was done with HOPPS.

Addressing IPPS Underfunding

CMS officials managing the inpatient payments can implement 2 policy solutions:  
  • Rewrite the IPPS rule to raise the base Medicare reimbursement rate, which is fairly straightforward. In the outpatient setting, policymakers lifted reimbursement rates by a factor of 9 in 2016 alone. Hence, there is every reason to believe that such convincing action can be mirrored.
  • There is also a strategic workaround available to those in Washington: to reimburse cellular transplants in the same manner as solid organs (eg, kidneys). Under current regulations, Medicare provides a type of pass-through for acquisition costs, reimbursing hospitals for these costs separate from the IPPS rate. In this way, the government guarantees that hospitals will be adequately compensated for acquisition expenses and that such expenses do not create a disincentive for providing transplants to older patients. Implementing a policy similar to that for living kidney donors would not entail a massive overhaul of federal policies, but simply recognizing the acquisition costs apart from the DRG, as is done with solid organs. The solution makes sense on multiple levels, as it would create parity across Medicare transplant policies and reduce the role of cost in limiting access for beneficiaries.
Moreover, such a policy would have a positive impact on patients, while making an insignificant dent in Medicare spending. As shown in Figures 4 and 5, HCTs cost less than both cornea and kidney transplants and they are needed by fewer patients.9 Therefore, it just makes sense for CMS to reimburse hospitals for their cell acquisition cost separate from the DRG rate, just as they do for the acquisition cost of solid organs.

In the end, the future is brighter than ever before for patients suffering from blood cancers. Technology is progressing rapidly, medical treatments are tackling diseases that were death sentences just decades ago, and policymaking is finally beginning to catch up with this progress. We now need CMS to take the next logical step and create standardized, fair reimbursement rules for all Medicare beneficiaries, no matter where they choose to receive care. As a physician and an advocate, I will echo the same message I have delivered so often: the evidence is clear, and it is time for a change. It’s what my patients and so many others deserve.


Jeffrey W. Chell, MD, is chief executive officer of National Marrow Donor Program.

Jeffrey W. Chell, MD
CEO, National Bone Marrow Donor Program
500 N 5th St.
Minneapolis, MN 55401-1206

1. Facts and statistics. Leukemia & Lymphoma Society website. Accessed February 20, 2017.

2. Hematopoietic progenitor cell transplant. Ministry Health Care website. http://ministryhealth. org/Services/Cancer/Locations/SaintJosephsHospital/Transplant/HematopoieticProgenitorCell- Transplant.nws. Accessed February 20, 2017.

3. Haploidentical stem cell transplant. Leukemia Foundation website. http://www.leukaemia. stem-cell-transplant. Accessed February 20, 2017.

4. Internal data. Be The Match.

5. Details for title: CMS-1656-FC. Hospital outpatient prospective payment—final rule with comment and final CY2017 payment rates. CMS website. Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices- Items/CMS-1656-FC.html. Accessed February 20, 2017.

6. Majhail NS, Mau LW, Denzen EM, Arneson TJ. Costs of autologous and allogeneic hematopoietic cell transplantation in the United States: a study using a large national private claims database. Bone Marrow Transplant. 2013;48(2):294-300. doi: 10.1038/bmt.2012.133.

7. Cancer Stat Facts: acute myeloid leukemia (AML). National Cancer Institute website. http://seer. Accessed February 20, 2017.

8. Medicare Provider and Analysis Review Database, 2015; Centers for Medicare & Medicaid Services.

9. Bentley TS. 2014 U.S. organ and tissue transplant cost estimates and discussion. Milliman website. pdf. Published December 2014. Accessed February 20, 2017.
Copyright AJMC 2006-2018 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
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