In a startling development, I have learned that Medicare (CMS) has reversed its decision on reimbursement for the small doses of Avastin used in treating wet age-related macular degeneration.

As you may recall, the agency ruled in September to reduce the reimbursement rate to about $7.25 per dose, from the $50 or so it had been paying. That meant that ophthalmologists lost money if they used Avastin, even though the use of Lucentis cost Medicare about $2000 per dose! The ruling took effect on October 1st.

Now, in a surprise development (apparently at the urging of Senator Herb Kohl, and his Special Committee on Ageing), CMS will announce tomorrow that they will be reverting to the pre-October 1 coding, beginning on January 1, 2010.

According to my sources on both Kohl’s committee and the AAO, they are trying to influence CMS to make the change before that date as, according to Dr. Phil Rosenfeld of Avastin fame, the three month delay could cost Medicare as much as $100 million in extra costs, as doctors switch over to Lucentis in order not to lose money on treating wet AMD.

For more on this story, please see my online Journal ^[1], and today’s Sen. Kohl’s announcement. ^[2]