1. UNIVERSITY OF THE SCIENCES, PHILADELPHIA
Extension of the
Immunosuppressive Drug
Benefit in Medicare
Correcting an Incoherent Policy
Student: Glenn Solomon
12/6/2012
HP: 707 Trends In Health Policy

2. 1
Thesis Statement:
End Stage Renal Disease is the only condition that is covered under provisions of
Medicare. Current Medicare policy is incoherent both on a cost basis and within the tenets of the
organ transplant system in the U.S. Extension of immunosuppressive drug benefits for all
Medicare recipients should be legislated for the lifetime of the patient. Doing so would increase
patient survival time, moderate the loss of organs which will thereby also increase the pool of
available organs and lastly, it will provide for a cost-effective approach to treatment.
Introduction and Current Situation:
Medicare Coverage for End-Stage Renal Disease consists of two primary treatment
courses. The first is dialysis. Medicare payment coverage for a patient on dialysis is for the
lifetime of the patient. Costs for dialysis approach $75,000 per year and it is a life-saving
treatment. (Woodward & Page, 2008-09) The second route is via renal organ transplantation.
It is the second selection of organ transplantation that is the focus of this writing.
Medicare coverage provides for all pre-transplant costs, the surgical costs, and 36-months of
immunosuppressive drug coverage post- transplant. (OPTN, 2012) The need to extend drug
benefits to all organ transplant recipients for the lifetime of the patient has become paramount,
which will become evident as this discussion progresses.
What we refer to as pre-transplantation, defines coverage maintained through Medicare
specifically for dialysis, drugs, and associated services. Post-transplant coverage is limited to 36
months in toto. It has been reported that the clinical outcomes which result from this policy are
reductions in drug therapy leading to non-compliance, non-adherence to treatments, earlier
rejection by the host, and advanced economic hardship. (Gill & Tonelli, 2012)

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Definition of coverage for immunosuppressive therapy of renal allografts is limited and
the health policy implications and costs are enormous. According to the U.S. Organ Procurement
and Transplantation Network (OPTN) there are >115,000 patients on the national renal
transplant waiting list, and there are limited numbers of organs available for transplant. This
totality of a group also includes those individuals not eligible for transplant. They now number
more than 500,000 and they attend to their ESRD (End-Stage Renal Disease) by way of the
artificial kidney, also known as dialysis (U.S. Renal Data System, 2010). In order for the
situation to be improved, there must be lifetime coverage of the immunosuppressive drug benefit
for post-transplant recipients.
So, the main issue currently in play for patients who receive a kidney either through a
deceased or living donor is that they must take immunosuppressive drugs to prevent the effects
of chronic rejection. Often there is a “cocktail” of agents taken in combination to ameliorate the
risk of immunological responses to reject the new organ. This is accomplished thru a
maintenance regimen with no break in that task. Because these drugs are now approaching
$20,000-25,000/year, there are increasing numbers of working poor, non-Medicare, non-private
insurance patients who are choosing to non-adhere or to lower their dosages of their drug
regimen in order to handle the other economic realities of life. (Woodward & Page, 2008)
Problems are ripe in this subset of patients. Data increasingly reveal that if a patient alters their
drug treatment paradigm, there is a 25% chance of losing that organ to rejection within three
years and their outcome on post-transplant dialysis is even worse, leading to premature death
within two years after they lose the organ. (Gill & Tonelli, 2012)
Again, it is not the intent of this short review to make comparisons between dialysis and
transplantation. Rather, it is the intent of this work to show that by extending drug benefits for

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the lifetime of an organ recipient, the importance of retaining the organ through improved and
supported maintenance is imperative.
A Short History of Medicare and ESRD Coverage
Medicare as the national medical insurance program for the elderly was signed into law,
in 1965 by then President Lyndon Baines Johnson. With the expansion of dialysis during the
mid-1960’s more and more patients with the life-altering condition known as End Stage Renal
Disease were facing the inability to pay for their treatments ultimately leading to economic ruin
and deleterious effects both on morbidity and mortality. Those in the lowest rungs of society,
specifically the working poor were increasingly prone to being in this situation because they
were beyond the inclusions for Medicaid and without private health insurance.
In 1972, Congress initiated a major change to the Social Security Act via legislation that granted
comprehensive coverage under Medicare to virtually anyone diagnosed with kidney failure, regardless of
age or income. This decision provided the impetus for a major expansion of availability and treatment to
patients with ESRD via dialysis networks as established across the country. (Page and Woodward, 2008)
During that same timespan, a revolution was occurring in the pharmaceutical industry which
would transform the medical transplantation of kidneys. First with the commercial launch of cyclosporine
in 1983 and then over the next decade with more specific agents, the acute and chronic rejection that had
been the hallmark of organ transplantation had been reduced substantially. (Tilney, 2003) All of a sudden,
there was a second and very enticing alternative to dialysis
In 1993, Congress again made changes to Medicare with legislation that added
supplementary drug coverage to those diagnosed with ESRD for 36-months post-transplant. In
2000, supplementary drug coverage was extended for all Medicare patients 65 and over.

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The Health Policy Paradox
Now with the short historical perspective summarized, we can ask the question; “Why is
there a paradox at all with respect to Medicare ESRD coverage? Policy discussions based upon
the economics, clinical attributes of care, and ethical constructs of this situation are important
and life-altering to those suffering with ESRD. Deborah Stone in her text, Policy Paradox, The
Art of Political Decision Making, makes some very cogent and interesting points about the
rational model within a public policy decision. Specifically, she mentions that the altruistic
behaviors and actions exhibited in most public policy decisions in the United States usually
begin with a group or groups forming alliances and coalitions, thereby increasing
communication and media attention about the issue, cooperating about the approaches to gaining
support, and finally, engaging the policy-makers so that appropriate legislation will be created
and implemented. (Stone, 3rd edition, 2012)
Such is the case with ESRD. The actual formation of factions, as Madison wrote about in
the Federalist papers (general knowledge), or lobbying as it is now referred to, enabled the
creation of support mechanisms by means of legislative actions in Social Security and Medicare
law. This is no different with respect to a disease state such as ESRD.
Briefly, this is what happens. A person is diagnosed with ESRD. If possible, he/she
begins dialysis and is placed on a waiting list for a kidney. Because the number of organs is
limited, the patient is treated and supported with dialysis until an organ becomes available.
Legislation, as was discussed previously, pays for the lifetime of the patient specific to dialysis.
If and when a patient receives a kidney via transplant, the post-transplant immunosuppressant
drug coverage lasts for 36 months. After that point, if the patient is employed, private insurance

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would cover the drug regimen. However, as has been delineated, there are many millions of
people who work but do not have private insurance through their employer. They then become
personally responsible for the ongoing costs of drugs which often supersede $20,000 per year.
(NATCO.org, 2012)
The health policy paradox then becomes related to the transplant itself. If a patient cannot
afford the medications, which are necessary for graft (organ) survival, that individual must either
have a job position which pays for lifetime coverage via an employer based insurance program
or must become eligible for Medicaid. If the patient is amongst the group known as “the working
poor” the usual course of events is insolvency, non-adherence to medications, and ultimate loss
of the organ. At that point, the patient can then be covered on Medicare with dialysis. This is the
paradox and the conundrum. It is a very strange cycle and quite incoherent part of the U.S. health
care system.

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Cost Benefit Advantages of Extending the Immunosuppressive Benefit
The primary concentration of this section is to review the economic costs confined to
three specific areas;
1) A comparison of U.S. graft survival and immunosuppressive drugs’ coverage with
other industrialized countries and their adoption of lifetime coverage. (Figure #1)
2) Comparing Medicare coverage for organ grafts with non-Medicare insurance patterns,
specifically as it relates to graft survival and reduction of medical incidents. (Figure
#2)
3) Cost Effectiveness of Graft Survival (Figure #3)
In focusing on these three areas, it should become apparent that extension of drug
benefits for those ESRD patients from the current 36-month coverage to lifetime status is crucial,
not only for economic reasons but also because the system that has been adhered to from its inception is
one of altruism and equity for all patients suffering with this malady.
First in order to begin the portrayal of lifetime drug coverage as the appropriate choice, it is
important to compare what is available via policy in other industrialized nations with those in the U.S.
Figure #1 shows data comparing the policies of the U.S. with those of other industrialized nations
Canada, the U.K., and Australia.(Gill & Tonelli, 2012) The take home message is that survival rates, both
in the 5-year and 10-year measurement periods for post-transplant patients are higher in countries where
lifetime immunosuppressive drug coverage is in effect.

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Figure #1
Gill, John S., and Tonelli, Marcello. Penny Wise, Pound Foolish? Coverage Limits on
Immunosuppression after Kidney Transplantation. New England Journal of Medicine, February
16, 2012. NEJM.org.
Secondly, in a study reported on by Gill and Tonelli in the New England Journal of
Medicine, 2012, both deceased and living donor graft loss were compared using Medicare data
and private insurance data. In evaluating the following Figure #2, it becomes apparent that at the
current marker of 36-months (a broken vertical line from year 3- appearing on the x-axis) graft
loss disparity increases for those patients on Medicare (broken lines) versus those with lifetime-based
private insurance coverage (solid lines).

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Figure #2
Gill, John S., and Tonelli, Marcello. Penny Wise, Pound Foolish? Coverage Limits on
Immunosuppression after Kidney Transplantation. New England Journal of Medicine, February
16, 2012. NEJM.org.

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Lastly, data for projected patient and graft survival with lifetime immunosuppression
coverage vs. existing 3-year coverage are presented. Patient survival (solid), projected over 20
years, was estimated at 55.4% and 61.8% for current coverage (black) and lifetime coverage
(gray), respectively. Graft survival (dashed) was estimated at 38.6% and 47.6% for current
coverage and lifetime coverage, respectively. (American Journal of Transplantation, Volume 4,
Issue 10, pages 1703-1708, 2 AUG 2004 DOI: 10.1111/j.1600-6143.2004.00565.x
http://onlinelibrary.wiley.com/doi/10.1111/j.1600-6143.2004.00565.x/full#f2)
These data are shown to again portray the advantage of extending drug coverage from the
current 36-months to the lifetime for all patients no matter their standing in the health care
system.
Figure #3

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Summary and the Future
With this short exposition in mind, it has been my sincere effort to cogently present a
rationale that the current U.S. policy regarding treatment of ESRD post-transplant is neither
adequate nor complementary to the ultimate goal. That goal is to provide life-saving care for
those with ESRD.
I advocate for an extension of Medicare benefits after organ transplantation from 36-
months to lifetime coverage. Why would this be the correct choice?
Study data as presented during the previous section helped to elucidate that
transplantation is more cost-effective as compared to dialysis and should be the more appropriate
choice for an ESRD patient, when an organ becomes available. Various study projections, focus
on cost savings of >$200 Million per year with lifetime coverage of immunosuppressive agents
in transplanted patients versus the current system. (Page & Woodward, 2008-09)
While the future is always unpredictable, a current piece of legislation, HR 2969
(Sponsored by Michael Burgess-R, Texas plus 122 other Congress persons); named The
Comprehensive Immunosuppressive Drug Coverage for Kidney Transplant Patients Act of 2011
would serve as an amendment to the Social Security Act and supports lifetime
immunosuppressive drug coverage for all-kidney transplant patients.
The ACA of 2010 does not specifically mention the ESRD post-transplant patient.
However, it does provide for the creation of state insurance exchanges for those who fall
between Medicaid and Medicare clusters. It is thought that this implementation would serve to
cover that group of individuals who are amongst the working poor.

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Ultimately, the expanding medical practice of transplantation and extension of benefits
for the lifetime of the patient serves to protect the U.S. Medicare system’s investment in the renal
allograft program. With organ retention and greater control of acute and chronic rejection,
patient outcomes improve, equity in the process is greater for the working poor, and lastly it
saves lives along altruistic behaviors while reducing suffering (Stone, 2010)

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Citations/References
1. Becker, BN. A conflict of responsibility: no patient left behind. Clinical Journal of
American Society of Nephrology. 2010; 5-744-5.
2. Fields, Robin. http://www.theatlantic.com/magazine/archive/2010/12/-god-help-you-youre-
on-dialysis/308308/?single_page=true
3. Gill, John S., and Tonelli, Marcello. Penny Wise, Pound Foolish? Coverage Limits on
Immunosuppression after Kidney Transplantation. New England Journal of Medicine,
February 16, 2012. NEJM.org
4. Google.Images.http://images.google.com/search?num=10&hl=en&site=&tbm=isch&sour
ce=hp&biw=1366&bih=598&q=dr+joseph+murray&oq=dr+joseph+murray&gs_l=img.3
.0i24l5.2016.5085.0.5414.16.13.0.3.3.0.148.1131.11j2.13.0...0.0...1ac.1.Xg6YYjXlrAE
5. The Institute of Medicine, 2012. Extending Medicare Coverage for Prevention and Other
Services, p.126.
6. OPTN, Organ Procurement and Transplantation Network, 2012. www.optn.org
7. The Organization for Transplant Professionals. www.natco1.org; Natco-info@
goAMP.com. 2012
8. Page, Timothy F., and Woodward, Robert S. Cost of Lifetime Immunosuppression
Coverage for Kidney Transplant Recipients. Health Care Financing Review/Winter 2008-
2009. Volume 30, Number 2.
9. The Philadelphia Inquirer. Strange financial logic of Medicare kidney coverage. James
Osbourne.
10/16/2012.http://www.philly.com/philly/business/homepage/20121016_Strange_financi
al_logic_of_Medicare_kidney_coverage.html?viewAll=y&c=y.
10. Richard A. Rettig, Ph.D. Special Treatment — The Story of Medicare's ESRD
Entitlement; N England Journal of Medicine 2011; 364:596-598February 17, 2011DOI:
10.1056/NEJMp1014193
11. Stone, Deborah. Policy Paradox: The Art of Political Decision Making. 3rd Edition.
W.W. Norton & Company: New York. London. 2011.
12. Tilney, N.L., Transplant, From Myth to Reality. Yale University Press. New haven
Connecticut and New York. 2003.
13. U.S. Renal Data System: Annual Data Report, 2010. http://www.usrds.org/adr.htm.
(Accessed, 2012)
14. U.S. Census Bureau: Census 2010 Summary File 3. http://factfinder.census.gov.
Accessed, 2012)
15. Woodward RS, Page TF, Soares R, Schnitzler MA, Lentine KL, Brennan DC. Income-related
disparities in kidney transplant graft failures are eliminated by Medicare’s
immunosuppression coverage. American Journal of Transplantation. 2008; 8; 2636-46.