Medicare payments encourage overuse of anemia drug

CHICAGO -- A flawed Medicare payment plan encourages aggressive use of a risky and costly anti-anemia drug on many kidney dialysis patients, say researchers who warn the system should be changed.

A new study finds that for-profit dialysis chains give higher doses of the drug than not-for-profit dialysis centers. That practice may be putting patients at risk of deadly side effects, some experts said.

The drug is Epogen, and Medicare pays more for it than any other single drug: $2 billion in 2005. For-profit dialysis chains report that the drug accounts for 20 percent to 25 percent of their annual net operating revenue.

Epogen is approved by the Food and Drug Administration to prevent blood transfusions in patients suffering from anemia, which can accompany kidney failure.

However, its overuse has been linked to increases in deaths, strokes and heart attacks. Last month, federal regulators asked makers to place a black box warning on Epogen and other similar drugs' labels, the strongest warning a prescription drug can have.

The new study found that patients in chain-operated, for-profit dialysis centers consistently are given the highest doses of Epogen, regardless of their anemia status. The for-profit centers increased the drug dose even when patients already had recommended levels of red blood cells. The not-for-profit centers did not.

"Patients are at risk here. They need to be reassured that the right thing is being done for them," said study co-author Dennis Cotter of the Medical Technology and Practice Patterns Institute, a not-for-profit research group in Bethesda, Md.

Cotter said Medicare not only reimburses dialysis centers a fixed amount for each treatment, it also reimburses them separately for Epogen.

Some for-profit chains, which handle the majority of dialysis patients, negotiate volume discounts from Epogen's drug maker, Amgen Inc. of Thousand Oaks, Calif. So the chains generally buy the drug for less than Medicare reimburses, making the drug a profit center.

The study, appearing in today's Journal of the American Medical Association, is based on data on nearly 160,000 dialysis patients who got care in 2004.