Payment rules threaten access to care, doctors say

Because of reimbursement rates outlined in the new Medicare drug law, oncologists say they will now have to take into account the cost of a treatment and not just its effectiveness.

The changes are “forcing practices to consider what drugs they can or cannot use,” said Ted Okon, co-executive director of the Community Oncology Alliance (COA).

Community cancer clinics provide 80 percent of cancer treatment in the country, but Okon said some practices are already forced to send certain patients to hospitals because they cannot afford to treat them.

The changes to the payment rates are estimated to save Medicare $350 million next year, but COA President Kurt Tauer said in a letter to CMS Administrator Mark McClellan last month that rushing to put in place the reimbursement changes without safeguards “risks creating severe patient access problems and harm to the nation’s cancer-care delivery system.”

Medicare savings would have been even greater, but a $300 million pilot project for oncologists will soften the blow of the payment changes, Okon said.

But a Dec. 1 Government Accountability Office (GAO) study found that Medicare payments to oncologists for drugs would decline but would still exceed “physicians’ costs for acquiring these drugs.” In addition, the new payment system would increase substantially payments for chemotherapy administration services. The GAO report indicated that the changes to the payment system would not threaten access to care.

House Energy and Commerce Committee Chairman Joe Barton (R-Texas) applauded the GAO findings, saying they show that “the new system provides fair payment for both physician services and drugs.” Barton has championed fair drug
reimbursement while also advocating increased payments for services.

The CMS, in comments on a draft of the report, said the GAO findings show Medicare will adequately reimburse oncologists. Okon said the GAO report was a “faulty, rushed study,” that did not take into account some of the costs associated with administering cancer drugs.

In addition, the GAO did not take into account the effect of bad debt on the payment system. Bad debt occurs when Medicare patients do not pay their 20 percent share of their cancer treatment. Okon said oncologists only collect 95 percent of their reimbursement because of bad debt.

Because Medicare beneficiaries on average make up nearly half of all cancer patients, community cancer clinics will not be able to make up these losses through increasing costs for non-Medicare patients, according to oncology groups. COA fears that private insurers will follow suit and cut costs to oncologists, which would result in a $1 billion shortfall in 2005.

COA is lobbying Congress and the CMS for relief. The group hopes that the CMS will administratively increase payments for services associated with administering cancer drugs. COA is also asking for a transition year, in which oncologists would be reimbursed at last year’s level but also look at how the new system would affect them.

In addition, oncologists argue changes to the payment system are premature, as studies on the cost of administering cancer care are being completed this year.