Jan 03

Thru the Roof Chemotherapy Charges!

by Bob

Occupy Wall Street – Health Care Advocates - I’ve noticed that most Occupy Wall Street protesters lack a specific aim on what they are trying to accomplish. For instance, 300 demonstrators of Occupy Wall Street joined health care advocates during a march to the former St. Vincent’s Hospital to protest the lack of universal health care. The marchers chanted “We need a hospital!” and, “They say cut back, We say fight back!”

After reviewing thousands of hospital claims, protesters need to be careful what they ask for and perhaps change that chant to – “We need a hospital that won’t mark up life saving chemotherapy drugs by more than 150%”.

Extreme Drug Makeover – EDM - This markup phenomenon I like to call “Extreme Drug Makeover or EDM”. Don’t be confused with the popular TV show which benefits needy families as these extreme makeovers benefit only the hospital. Simply put - a drug that is purchased for $10 is resold for $100 (EDM of 1000%). This doesn’t seem like much until you read the following.

Chemotherapy Charges (Herceptin) – I recently reviewed claims for an individual with breast cancer. Part of her treatment was the drug Herceptin (trastuzumab) which she received weekly at her local hospital. What do you think the hospital charged for Herceptin each week?

A    $ 5,000

B    $10,000

C    $15,000

D    None of the above

The correct answer - D None of the above.

The hospital charged $19,956.00. YIKES! Medicare would reimburse Average Sales Price (ASP) of $3,096.72. Even with a 36% discount in place, the benefit plan would have weekly drug costs of $12,692.01. Billed charges for one month were $83,612.00. That’s right - 1 month = $83,612.00.

I immediately contacted the facility to ask if there was some type of error. The representative stated chemotherapy drugs are very expensive and charges were correct. However, I could send a letter of dispute, which I did. There was no response. The next 2 monthly invoices had billed charges of $105,792.00 and $84,035.00. Letters were again sent disputing the cost. Again - no response.

Finally the hospital called to see if there was additional information needed to support the charges. I asked for a copy of the hospital invoice from the drug supplier. This may allow additional payment if the hospital’s cost was higher than expected. Who knew, maybe this facility was not doing an EDM and this was just a really expensive drug. I never saw the invoice, but was then instructed to have the benefit plan make payment based on what it determined as reasonable. The plan reimbursed at 150% of ASP.

I assumed the hospital may balance bill the patient so I contacted the drug manufacturer - Genentech. The representative could not provide the hospital’s cost for the drug (not a surprise), but indicated there was a program to assist patients without insurance or those who were responsible for a majority of costs. I asked if there was a “hotline” I could report an obvious overcharge for the drug. He stated – “no” - but offered to send information to the patient in order to apply for assistance.

This patient will require Herceptin once a week for 52 weeks. If she goes to the same hospital, the benefit plan (after discount) would pay $659,984.52. Based on average hourly wages in the patient’s location - this amount would pay a registered nurse 40 hours per week, 52 weeks a year - for 12 years.

So the fight against EDM continues...

Just J & B:


Bob is a managed care coordinator who in 1984 started as a compliance analyst for credit and mortgage insurance. Later he shifted to major medical. This staff member has spent countless hours reviewing claims, medical policy and has a lot to say about both.


Jess is a nurse case manager dedicated to patient advocacy after receiving her RN license in 1998. This long time staff member provides her unique perspective based on thousands of conversations held with patients and providers.



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