Medicare Reimbursement for Oncology Treatments: Threat and Response

NewsStory: Medicare Update 1.17.08:
CMS Radioimmunotherapy Reimbursement Cuts Temporarily Revised

A serious issue that continues to threaten the availability and quality of cancer care involves the Medicare reimbursement for physicians who provide chemotherapy and treatments in their offices, as well as hospital outpatient facilities.

Under the current system, physicians are provided two forms of reimbursement:

1. The cost of the drugs themselves;
2. All other services associated with administering the drugs and other treatment costs, including nurses, patient counseling and specialized equipment.

Unfortunately, providers too often run into difficulty in meeting the needs of the cancer community as Medicare reimbursement rates do not accurately reflect the costs of administering these life-saving drugs.

Adding to this dilemma is confusion around how much physicians are actually paid for their services, overall. While Medicare does reimburse for chemotherapy drugs at rates higher than the actual cost for the doctor to purchase them – this is offset by the fact that the program compensates for all other services at rates lower than their actual cost. As a result, most physicians contend that, at the end of the day, they are lucky to break even. Attempts to control Medicare costs have led both the Administration and many in Congress to pay close attention to the overpayment of drugs – seeking to reduce those rates – while ignoring underpayment in administrative reimbursements.

Many in the cancer community – including patients and their families – are deeply concerned that deep cuts in reimbursement to providers and cancer facilities, could lead to severe cutbacks and/or elimination of treatments for Medicare patients. For many, particularly those living in rural areas, the impact would be especially hard hitting as it could force patients to travel greater distances to facilities that are often overcrowded and provide a lower standard of care. Moreover, the impact would be widespread. Currently, greater than 80 percent of chemotherapy treatment is conveniently provided on an outpatient basis, either in a doctor's office or a hospital outpatient center.

In order to address this issue, The Society urges Congress to pass legislation that would correct the imbalances and even the reimbursements by a number of means:

• Reimburse cancer drugs at rates based on the manufacturer's sales price with an additional amount to cover the costs of handling the drugs, including procurement, capital invested in inventory, storage, waste and bad debt.
  
• Cover the full costs of administering chemotherapy including oncology nurse time, specialized equipment and supplies.
  
• Provide Medicare reimbursement for services provided by oncologists including counseling about treatment, side effects and end-of-life care; also nutrition counseling, psychosocial services and social work support.

In addition, the Society is actively involved in an effort called the Global Access Project intended to document the actual requirements and costs of cancer treatment and educate policy makers on effective means of preserving access to care.

For more information, contact Mark Pascu, Director of Federal Affairs or George Dahlman, Senior Vice President of Public Policy for The Leukemia & Lymphoma Society, Office of Public Affairs at 202-543-7033. Both can be reached by e-mail at: mark.pascu@lls.org  or  george.dahlman@lls.org. You can also contact your local chapter of The Leukemia & Lymphoma Society.

back to top