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HRD-94-1R 1 (1993-10-13)

handle is hein.gao/gaobacklg0001 and id is 1 raw text is: United States GAO General Accounting Office Washington, D.C. 20548 Human Resources Division B-250909 October 13, 1993 The Honorable Fortney H. (Pete) Stark Chairman, Subcommittee on Health Committee on Ways and Means House of Representatives Dear Mr. Chairman: This letter responds to your request that-we evaluate the methodology and data used by the Health Care Financing Administration (HCFA) to establish Medicare's payment rate for erythropoietin, a drug used to treat anemia in dialysis patients with chronic renal failure, also known as end- stage renal disease (ESRD). The Omnibus Budget Reconciliation Act of 1989 required the Secretary of Health and Human Services (HHS) to report on the methodology and rationale used by HCFA to establish Medicare's payment rate for erythropoietin, as well as the method HCFA planned to use to assess future rates. You expressed concern that the Secretary's report, issued in July 1991, did not include critical information needed to evaluate the appropriateness of the methodology used to develop the payment rate. As agreed with the Subcommittee staff, we reviewed the methods and data used to develop the payment rate for erythropoietin, as well as the problems that HCFA encountered in obtaining the information necessary to set a payment rate for erythropoietin. BACKGROUND In 1989, the Food and Drug Administration (FDA) approved the use of recombinant human erythropoietin to treat anemia associated with ESRD. This drug, a genetically engineered version of a natural kidney hormone, stimulates the body's production of red blood cells to help combat anemia, which is common in dialysis patients, and reduce the need for blood transfusions. Since June 1989, Medicare has paid for recombinant human erythropoietin administered to dialysis patients in dialysis facilities and physicians' offices. Because Medicare covers medical services for about 150,000 ESRD GAO/HRD-94-1R HCFA Payment Rate for Erythropoietin

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