A Medicare proposal to pay hospitals more for using a nuclear medicine imaging agent that's not derived from weapons-grade uranium might come from the worthiest of motives -- keeping weaponizable radioactive material out of the hands of bad guys -- but hospitals, a group purchasing organization and a radioisotope supplier worry that the proposed plan is premature.

"We're all in favor of moving toward this, but it needs to be a more realistic kind of policy," Roslyne Schulman, director of policy development with the American Hospital Association, one of the groups skeptical of the proposed rule, told DOTmed News.

In a hospital payment rule first floated this summer, the Centers for Medicare and Medicaid Services said it plans to pay hospitals $10 per dose extra for technetium-99 exclusively derived from non-highly enriched uranium sources, which in practice means from low enriched uranium sources. The change, part of the proposed Medicare Hospital Outpatient Prospective Payment System, would go into effect next year.

Tc-99m is used in millions of nuclear imaging exams annually, for scans of the heart, brain, thyroid and kidneys. It's a short-lived radioactive agent created by "milking" its parent isotope, molybdenum-99, in technetium generators supplied to hospitals by radiopharmacies. Moly-99 is itself made by bombarding uranium targets with neutrons in a nuclear reactor -- something done at only a handful of sites around the world.

Concerns

While hospital groups say they support the non-proliferation efforts in principle, in letters commenting on the Medicare rule sent last week, they worry that the proposed extra payment might not be enough to cover the extra costs associated with the shift. Also, the supply of LEU-derived moly is, for now, too small and too unstable to meet the needs of current users.

"Our concern is that CMS proposes to provide the extra payment only when 100 percent of the isotope was derived from low-enriched uranium," Danielle Lloyd, vice president of policy with Premier healthcare alliance, a GPO, told DOTmed News in an e-mailed statement. "There is not enough low-enriched uranium produced in the world today to satisfy the demand of just the U.S."

Currently, only two reactors in the world supply LEU moly to the U.S.: the Opal reactor in Australia and the Safari reactor in South Africa, according to comments by Covidien, a radioisotope supplier that says it is working to convert to non-HEU sources by 2015.

Combined, the South African and Australian reactors could only supply, on average, 630 6-day Curies of non-highly enriched uranium moly per week, just 12 percent of the United States' estimated 2013 weekly moly needs of approximately 5,200 6-day Curies, Covidien said in its CMS letter. The two reactors would also not be scheduled to supply isotopes throughout the entire year, Covidien said.

Cost adjustment

The $10 extra per dose also might not be enough to cover the greater expense of using LEU-derived Tc-99m. In its letter, AHA requested that CMS explain how the adjustment would be enough to "incent hospital behavior."

For one, the product seems to be more expensive to produce. Covidien noted that capital expenses involved in the shift to LEU, such as building new reactors or particle accelerators, as well as the cost of long-term storage of the greater amounts of waste produced, all could increase product costs. Also, because of the tight supply, increased demand for non-HEU moly driven by the CMS policy could raise the price even further.

Hospitals, in turn, would also have to bear new administrative burdens and their associated costs, the AHA said.

To get the price adjustment, hospitals would have to report a new HCPCS code, QXXXX, for each dose. While they wouldn't need to certify the Tc-99m dose was derived from a non-HEU source in that filing, they would need documentation on hand in case of an audit, AHA said in its letter. That means hospitals would have to create and maintain compliance policies to monitor HEU and non-HEU purchases, which would require additional personnel time and an IT infrastructure built around the dual-track recordkeeping, the AHA said.

"On the hospital side, for instance, implementing a new code, tracking which product is used, determining if it is certified, and then ensuring billing accuracy, results in higher administrative costs in addition to the actual price difference of the product," Premier's Lloyd said.

Mixing it up

As with some other respondents, AHA said if CMS goes ahead with its non-HEU moly plan, it should at least give participants higher per-dose payment adjustments and phase it in over several years, as the LEU-sourced supply chain becomes more diversified and robust.

One recommendation largely shared among CMS' correspondents was to allow the payment adjustments to apply to mixed doses: blended non-HEU and HEU generators, rather than ones exclusively derived from non-weapons grade sources. This would take into account the relatively scarcer supply of the material. Also, Covidien said requiring only 100 percent non-HEU sources for the adjustment would force manufacturers to segregate HEU from non-HEU sources in the supply chain, a "significant operational challenge" that in turn could create "hidden supply risks and costs beyond those estimated."

"The administration is proposing this as a way to incentivize manufacturing to produce more, but it's not going to work if the payment is inadequate and the policy is burdensome," Schulman observed.

For now, though, stakeholders have to wait to see what CMS decides. The agency is expected to release the final rule by November.