Medicare Reimbursement Policy and Use of ADT Therapy for Prostate Cancer

In the 1990s, the reimbursement for gonadotropin-releasing hormone (GnRH) agonists was 95% of the average wholesale price; a Government Accountability Office report found that physicians were able to acquire GnRH agonists at <82% of the average wholesale price. Based on the profitability of use of the GnRH agonists for androgen deprivation therapy (ADT), the overall use of ADT doubled; by 1999, nearly 50% of all patients with prostate cancer were being treated with ADT within 1 year of diagnosis. In 2003, payments from Medicare Part B for GnRH agonists totaled approximately $1 billion. In 2004, the Medicare Modernization Act implemented moderate reductions in reimbursement rates. Reimbursement was generally reduced to 85% of the average wholesale price and to 80% of the average wholesale price of GnRH agonists. These reductions were followed by substantial changes in the ADT reimbursement policy in 2005. Reimbursement was set at 106% of the average sale price (in contrast to the average wholesale price) on the basis of actual transactions reported quarterly by pharmaceutical companies. The policy changes represented a reduction of ≥50% in reimbursement for GnRH agonists. Given the cuts in reimbursements, researchers have hypothesized that the use of ADT would decline for indications for which there was limited evidence of efficacy, but that ADT would continue to be used for evidence-based indications. To test the hypothesis, they conducted a retrospective analysis of data from the Surveillance, Epidemiology, and End Results (SEER) Medicare database. They reported results of the analysis in the New England Journal of Medicine [2010;363(19):1822-1832]. The SEER database allowed the researchers to identify 54,925 men who received a diagnosis of incident prostate cancer from 2003 through 2005. Based on the strength of the indication for ADT use, the men were divided into 3 groups: inappropriate use, appropriate use, and discretionary use. Inappropriate use was defined as a scenario where there was no reasonable expectation of benefit, including men with stage T1 or T2 tumors or a low-to-moderate grade with a Gleason score of 2 to 6 who did not undergo radiation therapy or radical prostatectomy. Appropriate use was defined as a scenario where treatment was considered necessary on the basis of evidence of efficacy and limited alternative treatment options, including men with T3 or T4 tumors who underwent radiation therapy. In those cases, ADT would be considered as adjuvant therapy for locally advanced disease, making ADT the best choice because an overall survival benefit has been well established with that regimen. Discretionary use was defined as a scenario where treatment was of uncertain benefit due to insufficient evidence or was based on evidence but reasonable alternatives existed, including men with T1 or T2 tumors with a high-grade Gleason score. This group was subdivided into 2 subgroups: 1 group included men who did not undergo radiation therapy or radical prostatectomy (ADT would be considered primary therapy for localized but high-risk prostate cancer) and 1 group that included men who received radiation therapy (ADT therapy would be considered adjuvant therapy for localized but high-risk prostate cancer). During the study period, the rate of inappropriate use of ADT declined from 38.7% in 2003 to 30.6% in 2004 to 25.7% in 2005 (odds ratio for ADT use in 2005 vs 2003, 0.72; 95% confidence interval [CI], 0.65-0.79). For all categories of indications, ADT use was more common in older men, those with coexisting illnesses, and those with advanced-stage or high-grade tumors. Inappropriate use of ADT was more common in black and Hispanic men, unmarried men, and those residing in census tracts with higher rates of poverty or lower rates of education. Married men and those residing in census tracts with lower rates of poverty or higher rates of education more commonly were treated with ADT for appropriate indications. Compared with 2003, there was no significant decline in use of ADT in the appropriate-use group (odds ratio, 1.01; 95% CI, 0.65-0.79). For the 2 discretionary-use groups, there was no significant decline in the odds of use in 2004, but there was a significant decline in 2005. The researchers summarized analysis results by saying that “changes in Medicare reimbursement policy in 2004 and 2005 were associated with reductions in ADT use, particularly among men for whom the benefits of such therapy were unclear.”