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Medicare "Test" Would Accelerate Cancer Clinic Closings

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May 6, 2016 | 891 views | Post a comment

By William E. Nibley, M.D.

For cancer patients, it's getting harder to find access to quality, affordable care. More than 300 of the nation's cancer clinics have closed since 2008, and roughly 400 are struggling to make ends meet, according to the Community Oncology Alliance.

Yet the Administration is about to make it even more difficult for cancer patients to receive care in local clinics. The Centers for Medicare and Medicaid Services recently released a plan to cut doctor payments for treatments administered under Medicare Part B.

While the administration is presenting the change as a public-policy experiment, the CMS proposal amounts to a backdoor strategy to dramatically slash Medicare reimbursements for physicians. If implemented, the policy would financially strain or even bankrupt numerous medical practices, jeopardizing patients' access to care for conditions like cancer, cerebral palsy, and rheumatoid arthritis.

Part B is the segment of Medicare that covers outpatient treatments -- drugs so potent that a physician must administer them. Six of the top ten drugs covered by Part B are used to treat cancer or the side-effects of cancer treatment.

Doctors and clinics pay for these medicines themselves, and are supposed to be reimbursed by CMS at Average Sales Price +6 percent, per the 2003 law that established the add on to cover overhead costs associated with storing and administering these complex medicines. However, after factoring in the Medicare sequester and flawed inclusion of distributor prompt pay discounts, the actual current reimbursement rate is closer to ASP+2.3%.

The CMS plans would pay Part B doctors different amounts based on geographic location. According to the Obama administration, the goal of this new model is to test how different physician reimbursement rates influence treatment decisions.

But with the policy set to affect up to 75 percent of providers, the model looks less like a small-scale "test" than a sweeping and unilateral reimbursement cut.

This represents an aggressive overreach by CMS.The existing Part B reimbursement rate, after all, was put in place by Congress. The administration is now seeking to cut that rate without consulting legislators or the public. The consequences of such reimbursement cuts are well documented and tragic -- especially for community cancer clinics.

Repeated reimbursement cuts have been a key driver of clinic closings and the shift towards hospitals providing outpatient care. In 2005, 87 percent of cancer patients received treatment in community practices. By 2011, that had dropped to 67 percent.

In 2013, Part B reimbursements were slashed again as a result of the across-the-board federal budget cuts known as "sequestration." In one survey, 80 percent of the nation's cancer doctors said that the cuts had an impact on their practices. Half of respondents reported sending their patients somewhere else to receive chemotherapy.

When clinics go under or can't afford to take on new Medicare patients, sick seniors are forced to travel longer distances to hospitals, which generally charge higher prices and provide less personalized care.

Additionally, it's unclear that the CMS plan would contain Medicare costs. Outpatient drugs account for just 3 percent of Medicare expenditures, and the cost of Part B medications has remained stable, making the program a poor target for penny-pinching reforms.

If the administration moves forward with this plan, it will be acting against the best interests of the nation's most vulnerable Medicare patients -- and get little in return.

Dr. William E. Nibley is president of Utah Cancer Specialists, the largest community-based oncology practice in Utah.
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