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Cancer Care Groups Vocalize Opposition to Medicare Drug Payment Proposal

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   March 21, 2016

Oncologists have been the most vocal group opposing CMS's proposal to restructure Part B drug reimbursement because they believe patients have the most to lose—namely access to care.

The backlash against a new Medicare proposal that reduces physician reimbursement for Part B drugs has been swift. Several strongly worded letters were sent to the Centers for Medicare & Medicaid Services protesting the change, including one from more than 60 cancer care groups that represent nearly every state in the country.

Zon has held several leadership positions with American Society of Clinical Oncology (ASCO), one of many cancer organizations that believe restructuring Part B reimbursement from ASP plus 6% to a flat fee of $16.80 plus 2.5% will reduce patient access to cancer care.

Reimbursement Affects Patient Access

National Patient Advocate Foundation CEO Alan Balch, PhD, says the proposal will hit Medicare patients in rural areas. "Most cancer patients are still getting care in a community setting, especially in rural areas," he says. "Cutting reimbursement may mean providers won't take Medicare or they'll sell [their practice] to a hospital, which pushes patients to a setting that is further away."

Transportation is a major concern for the more than 20,000 patients NPAF helps annually, 50% of which are Medicare beneficiaries. Cancer care at a hospital is also more expensive. A Community Oncology Alliance study in 2012 on cost of cancer care by site showed that the cost of chemotherapy treatment in a hospital-owned outpatient office was 34% higher when compared to the same treatment in an independent oncology practice. 

Vice President of Texas Oncology, Debra Pratt, MD, says she is equally concerned about the potential impact on cancer patients in rural areas. Texas Oncology has more than 165 community-based cancer clinics in Texas and Oklahoma, some are in rural areas. Pratt calls the CMS proposal a "blunt instrument" with no consideration of oncologists and the cancer community.

"The natural consequences of this will be that Medicare patients will not have access, there will be further hospitalization, and increases to the cost of care," Pratt says.

The CMS proposal to change Part B drug reimbursement is described by the agency as budget-neutral. Some critics have charged that the current reimbursement model gives physicians an incentive to choose drugs with higher costs. But Zon says most oncologists are following clinical care pathways to do what's best for their patients. Plus, she says, the current model doesn't pay enough now.

"We are already in a situation where Medicare was not keeping up with the cost of drugs," Zon says. "ASP plus 6% was never updated quickly enough for physicians, and the sequester (2%) really made it ASP plus 4%. It's some desperate attempt to try and control drug costs. The problem is we have done nothing to cause the cost of drugs to escalate."

Independent oncologists also say there isn't a level playing field between them and hospitals. "[Hospitals] have bigger discounts on drugs," Pratt says.

The debate over drug costs is at a near-tipping point. Two studies out this month point to double-digit cost increases and billions of dollars wasted. The costs impact Medicare beneficiaries, too. Zon's practice has hired financial counselors to help patients figure out how to afford treatment. "It's taking a personal toll on them," Zon says. "Patients are coming in crying."

Cancer Treatment Outlook

What's gotten lost in the debate over adequate reimbursement, say Zon and Pratt, is that patients with cancer are living longer in part because of better drug treatments. ASCO's State of Cancer Care in America: 2016 report celebrates some of those advancements but also warns that access to care in rural areas is a critical issue.

"It came out of nowhere," says Robin Zon, MD, FACP, vice president at Indiana-based Michiana Hematology Oncology.

According to the report, only 5.6% of oncologists practice in rural areas—where 11% of cancer patients live. "In the last decade, there's been wonderful advancement," she says. "The eye is on the wrong ball. We need comprehensive payment reform. Don't make the doctors carry the burden of the rising drug costs when we had nothing to do with it."

Other organizations believe CMS's proposed payment change is an end-run around Congress. Community Oncology Alliance Executive Director Ted Okon questions why CMS is using the Center for Medicare & Medicaid Innovation to test a new payment model.

"This is using the mandate that Congress gave CMS in creating and funding CMMI," Okon says. "That allows CMS to use CMMI to overturn any law dealing with Medicare that Congress has made. We're testing a mandatory national initiative. That's flat-out wrong."

COA has taken an aggressive stance against the proposal. It has threatened legal and legislative action to stop the proposal from moving forward. Okon says the reimbursement changes are at cross purposes with the Oncology Care Model, CMMI's model that's been three years in the making. Its aim is to improve cost, care coordination, and quality by using performance-based incentives.

"It's designed to address the clinical side of care and give practices the opportunity to improve, but we've been waiting for four months to find out which practices and payers are going to get to participate," Okon says. "I suspect the reason that's been delayed is because of this [new proposal]."

Other specialists are also against the policy change, include rheumatologists and gastroenterologists. The American College of Rheumatology issued a statement criticizing a Medicare reimbursement rate that is already too low.

"It is our hope that the proposed payment methodology changes would not exacerbate the existing access problem and force more patients to receive biologic therapies in the hospital setting, where they will be faced with higher copayments, more expensive facility fees, longer travel times, and administration of complex therapies without the supervision of their rheumatologists."

Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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