Less than a month after setting a national Medicare Part B reimbursement policy for off-label use of Roche/Genetech's Avastin (bevacizumab), CMS has announced that effective Jan. 1, 2010 it will return to its previous approach to payment, apparently bowing to cost concerns.

The move reverses the agency's Oct. 1 notice establishing a new Q code for reimbursement when Avastin is used off-label in a physician's office to treat wet age-related macular degeneration (Also see "CMS Pay For Off-Label Use Of Avastin In Wet Age-Related Macular Degeneration May Discourage Use" - Pink Sheet, 2 October, 2009.).

The reversal follows an outcry by physician groups and a key member of Congress. The critics argued the Q-code would in effect discourage ophthalmologists from administering Avastin for the indication because the resulting payment rate would not cover the cost of acquiring the drug and would push doctors toward Roche/Genentech's significantly higher-priced Lucentis (ranibizumab). Lucentis is FDA-approved for WAMD.

According to its Oct. 27 statement, CMS will now apply the reimbursement limits only to hospital outpatient administration of tiny doeses of bevacizumabm which is covered by a C code. The announcement instructs physicians in the coming year to "return to their billing practices prior to Oct. 1, 2009, for small doses of Avastin when administered in their offices to macular degeneration."

Before the rate was set, ophthalmologists commonly used a non-specific code, leaving local contractors to make reimbursement determinations based on presented documentation.

A CMS spokesperson declined to explain why the new coding policy was rescinded. However, the decision was hailed by Sen. Herb Kohl (D-Wis.) in an Oct. 28 statement. Kohl, who chairs the Senate Aging Committee, had challenged the coding change in a letter to CMS that noted "the ophthalmologic and retinal specialist communities have informed committee staff that at least half of their members nationwide" use Avastin off-label for macular degeneration.

Kohl's Oct. 9 letter requested that CMS provide an explanation for the coding change and warned that the agency should be prepared to disclose any contacts it may have had with Genentech relating to the decision. Kohl has focused on Medicare reimbursement issues related to Avastin and Lucentis for some time (Also see "Senator Turns Up Heat On Genentech’s Decision To Curb Avastin Distribution" - Pink Sheet, 30 November, 2007.).

The new Q-code would have set the reimbursement rate for 0.25 mg of bevacizumab at $1.437, which is based on the average sales price of the drug when it is used for its approved cancer indication. This translates to reimbursement of about $7 per treatment. However, ophthalmologists might spend as much as $50 per treatment because they get doses from specialty pharmacies and incur an additional charge that was not reflected in the ASP of the drug

In contrast, Lucentis costs about $2,000 per treatment and eye doctors are reimbursed at $2,039 per treatment. Genentech has not sought FDA approval for Avastin in wet aged-related macular degeneration and does not offer it in doses for this use. It also has actively discouraged specialty pharmacies from preparing bevacizumab in small doses to treat WAMD.

The National Eye Institute is conducting a comparative effectiveness trial that will study the two drugs head-to-head in the eye disease.

-Gregory Twachtman (g.twachtman@elsevier.com)

CMS Reverses Avastin Reimbursement Limits For Macular Degeneration In Physicians' Office

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