FDA Approval Process for Alzheimer’s Medication Fraught with Uncertainty

The new medication for Alzheimer’s dementia, Aduhelm, remains in the news. First, the Food and Drug Administration (FDA) had changed the description and package labeling indicating patients eligible for treatment, limiting it to patients with mild disease. There are also going to be hearings investigating how the drug was FDA-approved when their advisory committee overwhelmingly recommended it not be approved.

And the Centers for Medicare & Medicaid Services (CMS) also posted a notice that they are starting a National Coverage Determination (NCD) process and asking for comments. The problem is that the NCD process takes up to nine months, and I have heard that CMS has never completely refused coverage for an FDA-approved medication under Part B.

So, what happens in the meantime? That actually depends on when the drug company starts making the medication available for use. If that happens before the CMS decision memo is released, coverage for Medicare patients will be at the discretion of the Medicare Administrative Contractors (MACs) – and theoretically, they will cover it if the use matches the FDA-labeled indication. We have already heard that Cleveland Clinic and Mount Sinai in New York will not be providing the medication in their facilities. But hospitals are not the issue. The real test will be office-based physicians.

Medicare Part B payment for intravenous drugs is made at the average sales price, plus 6 percent. That means a doctor could make over $3,000 administering the medication over a year. Will doctors in private practice follow the Cleveland Clinic policy and not offer the medication, or will they see an incurable disease and a medication that has the potential to work, and start providing it? It will be an interesting nine months.

As I am sure others will talk about, last week we saw the release of the proposed rule for the 2022 Physician Fee Schedule. What caught my eye was a sentence in the telehealth section. They were discussing whether to limit telehealth to patients who are already established with a physician, referring to critical care billing, for which there are codes for new and established patients. Unfortunately, such codes do not exist. Critical care codes are chosen based solely on time. You know, it is gratifying to see that the Medicare rules are complicated, even for the people who write them.

Finally, last week several of the MACs sent out a notice that physician claims for outpatient surgeries (which are a part of the prior authorization program) will be rejected if the prior authorization number is on the claim. For clarity, the program requires the hospital to obtain the prior authorization number and place it on the claim, but many work with the physician’s office to get the authorization. It would seem then logical that the office staff might record that number and it would end up on the claim, thinking that would prevent a denial. But the opposite is happening. It seems to me that the claim processing system could be programmed to ignore the number if the physician office includes it instead of outright rejecting the claim. In the meantime, if your physician office assists in obtaining the prior authorization number, be sure to inform them not to place it on the professional fee claim.  

Programming Note:

Listen to Dr. Ronald Hirsch on Monitor Mondays when he makes his Monday rounds on Monitor Mondays, Monday at 10 Eastern.