Additional Medicare Cuts Will Affect Access to Cancer Care

Roxanne Nelson

April 12, 2013

Physicians are bracing themselves as more cuts to Medicare reimbursement are looming.

The new cuts will come on top of the 2% sequester cut instituted on April 1, and are part of the 2014 proposed budget.

The $3.8 trillion budget proposal released by President Obama will shrink the federal deficit by $1.8 trillion over 10 years. Included in that budget is a plan to reduce physician reimbursement for Medicare Part B drugs.

The proposed budget will lower the 6% service payment to 3%. Although the cuts are primarily directed at physicians, there is mention that rebates will be required by manufacturers.

This move could significantly affect access to cancer treatment, particularly in the community setting.

"The sequester cut alone has already led to troubling signs that practices are being forced to shift patients to hospitals and other settings for their chemotherapy — resulting in more fragmented, and possibly more expensive, care for the 60% of oncology patients who are covered under Medicare," said Sandra M. Swain, MD, president of the American Society of Clinical Oncology (ASCO).

"This emerging crisis underscores the fact that Medicare's system of reimbursement for cancer care is deeply flawed," she said in a statement. "Our country needs payment approaches that maintain patient access and focus on supporting high-quality, cost-efficient, and patient-centered care."

Already Feeling the Pinch

Oncologists are already feeling the pinch and, as previously reported by Medscape Medical News, there are indications that they have begun to limit access to Medicare patients.

A joint statement issued by the Community Oncology Alliance, ASCO, the International Oncology Network (a division of AmerisourceBergen), and the US Oncology Network explained how these Medicare cuts are especially detrimental to cancer patients because of the way treatment is covered in the outpatient setting.

Community cancer clinics are reimbursed on the basis of the average sales price of the chemotherapeutic agent plus 6% for service payment; the sequester cut applies to this.

The joint statement noted that a recent survey indicates that the sequester cut will force 72% of cancer clinics to deny new Medicare patients or send all Medicare patients to the hospital for treatment.

In fact, cancer clinics across the United States have begun turning away Medicare patients, according to a report published April 3 in the Washington Post.

On a Positive Note...

On the positive side, the president's proposal includes a change to the sustainable growth rate (SGR) formula used to set Medicare pay rates. As it stands now, the SGR will trigger a 24.4% cut to physician pay on January 1, 2014. President Obama has proposed freezing physician pay rates at current levels, and supports several years of fee-for-service "payment stability," which would give the Centers for Medicare and Medicaid Services time to develop various pay-for-performance models from which physicians could eventually choose.

"Due in part to the successful implementation of the Affordable Care Act, Medicare spending per beneficiary grew at a historically low rate of 0.4% in 2012," said Kathleen Sebelius, Secretary of Health and Human Services, in a statement. "The President's 2014 budget would achieve even more savings. In total, the budget would build on the Affordable Care Act by generating an additional $370 billion in Medicare savings over the next decade, reducing the deficit and putting Medicare on sounder financial footing."

The president has also proposed boosting the budget for the National Institutes of Health to $31.3 billion, an increase of $471 million (1.5%) over the 2012 level, and for the US Food and Drug Administration to $2.6 billion, an increase of $456 million over the 2012 level.


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