Cancer Clinics Closing: Community Oncology 'Near Crisis'

Roxanne Nelson

June 27, 2013

The community cancer care landscape in the United States continues to evolve, and not for the better, according to a report released by the Community Oncology Alliance (COA). Since their previous report, issued in April 2012, there has been a 20% increase in clinic closings and in consolidation into hospitals.

"Community oncology is very much under fire. With the coming of the budget cuts that were made to Medicare," said Ted Okon, executive director of COA, "we are nearing crisis."

Of the 1338 clinics and oncology practices followed for the past 6 years, 43 have begun sending patients to be treated elsewhere, 288 clinics have closed, and 407 oncology practices are struggling financially.

In addition, 469 clinics and oncology practices have entered into a contractual relationship with a hospital, such as a professional services agreement, or have been acquired by a hospital, and 131 oncology practices have merged with or been acquired by a corporate entity.

The COA, ION Solutions, and The US Oncology Network asked the Moran Group to assess whether there has been a shift in chemotherapy services for Medicare patients from the physician's office to the hospital outpatient department.

Okon pointed out that one of the key findings so far is that there has been a shift.

In their analysis of physician-owned community oncology clinics, the Moran Group found that clinics administered 87% of the chemotherapy administered in 2005. At the end of 2011, that had dropped to 67%.

"If we don't get an increase in rates and payment on the practice side, this is just going to continue," Okon told Medscape Medical News.

Hospitals Gain, Practices Lose

The Moran Group also found that from 2005 to 2011, Medicare payments for chemotherapy administration at hospital outpatient sites tripled, from $98.3 million to $300.9 million, whereas payments for administration in physicians' offices decreased by 14.5%, from $507.5 million to $433.8 million.

The share of Medicare payments for chemotherapy administration rose significantly for hospital-based treatment, relative to office-based treatment, from 16.2% in 2005 to 41.0% in 2011.

During the same time period, Medicare payments for chemotherapy drugs increased in both settings. Payments for drugs used in hospital-based care more than doubled, from $905.4 million to $2.03 billion, and for office-based care increased 32%, from $2.63 billion to $3.47 billion.

Despite the significant increase in payments for drugs and chemotherapy administration for hospital-based care, physicians' offices remain the dominant site of chemotherapy administration, according to the Moran Group.

Long-Term Problem

In 2009, the COA reported that the Medicare Modernization Act of 2003, which sought to modernize reimbursement for cancer drugs and essential cancer-care services by reforming the payment systems, might actually have worsened the situation.

Because of those reimbursement changes, it was no longer possible for Medicare to cover the basic necessities in cancer care, according to the COA.

"Most cancer patients receive care in the community, even though there's a perception that most care is delivered in large medical centers," Patrick Cobb, MD, an oncologist in private practice in Billings, Montana, and then president of the COA, told Medscape Medical News at that time. "But community clinics are not being adequately reimbursed."

The across-the-board federal budget cuts that went into effect on April 1 have worsened an already tenuous situation. A recent survey conducted by the American Society of Clinical Oncology (ASCO) found that the 2% cuts to Medicare chemotherapy drug reimbursement under sequestration were forcing some oncologists to send patients to hospitals for chemotherapy. In fact, some cancer clinics are no longer able to see Medicare patients at all.

More than 500 ASCO members responded to the survey, and 80% reported that the sequestration cuts had affected their practices. Almost half stated that without supplemental insurance, they would not be able to continue to provide care to Medicare beneficiaries.

The COA report does not reflect the sequester cuts to cancer drugs. It is likely that those cuts will accelerate hospital acquisitions of community oncology clinics.

"If the sequester continues and nothing is done, some practices that are just holding the line will give up," said Okon. "We are already seeing practices closing in areas that can least afford to lose oncology practices, and access to care is becoming more limited for many patients. Instead of driving 5 or 10 miles to their oncologist, they may now have to travel 20 or 30 miles, or more."

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