| Medicare Reimbursement Updates
By Leo
Sands
Executive Vice President and Chief Administrative Officer
US Oncology
It is rare to pick up a newspaper
or news magazine today that does not contain an article or reference
to the increasing cost of healthcare in America, especially the
rising costs for health insurance premiums and outpatient prescription
drugs.
Our nation’s increasingly effective cancer care delivery system
is not immune to these economic pressures. Today, more than 83%
of all cancer care in the United States occurs in local communities,
in the physician office setting. Oncologists, oncology nurses, and
entire teams of cancer treatment program professionals stand ready
in communities nationwide to fulfill an essential promise: to ensure
the financial pressures affecting the healthcare delivery system
do not compromise patient access to cancer care or the quality of
care received. In fact, Nancy Davenport-Ennis, CEO and president
of the Patient Advocate Foundation, refers to this commitment by
physician office-based cancer care providers as “America’s
Cancer Care Safety Net.”
And yet despite this acknowledged tribute to the community-based
cancer care delivery system, cancer care providers have of late
come under attack by the media and by the Centers for Medicare &
Medicaid Services (CMS). These attacks have focused on the Medicare
Part B (physician office) payment system for cancer care, which
affects physician reimbursement for chemotherapy drugs and the amount
patients must pay in the form of drug co-insurance.
Simply stated, the Medicare program pays more for chemotherapy drugs
than the cost to doctors and pays less for services associated with
administering the drugs than the actual costs. These “practice”
costs include professional caregivers such as oncology nurses, social
workers, case managers, and pharmacists.
In a report submitted to the U.S. General Accounting Office in 2001,
a national network of oncology practices submitted aggregate data
for approximately 650 oncologists practicing in 27 states that demonstrated
that for all Medicare drug treatments provided in 2000 by these
treatment centers, the result was a 1.8% net profit margin due to
the following:
- underpayments for
chemotherapy services.
- the large number of
Medicare beneficiaries who have no or insufficient Medicare Part
B supplemental insurance coverage.
- the increasing inability
of Medicare beneficiaries to afford the high patient co-insurance
amounts for the new, more effective, but very expensive cancer
treatment and supportive care drugs
- patients who lack
supplemental insurance coverage and are not eligible for assistance
programs such as state Medicaid.
- Medicare denying
reimbursement to physician offices for treatments after they have
been provided to the patient.
Today, for Medicare
and many managed care plans, drug therapies are sometimes denied
coverage for one type of cancer even when they are covered for
another type. “Paperwork” requirements have increased
to the point of absurdity, leading to delays of many months in
approvals by health plans for coverage for the newer, more effective
treatments.
On the average, an oncologist in private practice will see more
than 200 new cancer patients each year. In a typical oncology
practice, about half of the patients are Medicare beneficiaries.
The remaining patients with healthcare benefits are covered by
a variety of managed care or other health plans, or are able to
participate in state programs such as Medicaid. An increasing
number of community oncology practice patients are uninsured.
According to a 1999 report from the Medical Group Management Association,
approximately 3.4% of a medical practice’s charges end up
as bad debt (equal to approximately 7.5% of net patient payments).
These amounts represent uncompensated care of 15-20 cancer patients
per full-time oncologist, per year.
Frequently over the past few years, CMS has tried to force steep
reductions in Medicare drug reimbursement without corresponding,
simultaneous increases in payments for cancer care services, which
have been estimated to be as low as 20% of actual practice expenses.
These attempts have been unsuccessful because CMS and Congress
have realized that an unbalanced reimbursement reform process
would create significant losses for Medicare-participating providers
and could result in access problems for patients.
Underpayments for physician office services are reaching a crisis
level. A 2002 report from the American Medical Association stated
that if Medicare keeps slashing payments, 42% of doctors plan
to drop out of the plan. The Mayo Clinic, Jacksonville, Florida,
stopped accepting Medicare as payment for its services as of Jan.
1, 2003. With more than half its patients on Medicare, the Jacksonville
clinic believed it could no longer absorb the payment cuts.
In April 2003, Reps. Charles Norwood, R-Ga., and Lois Capps, D-Calif.,
introduced legislation that will reform the Medicare system and
address many of the issues now under discussion.
The Quality Cancer Care Preservation Act would increase Medicare
reimbursement for practice expenses while reimbursing chemotherapy
drugs at rates closer to cost.
The new bill is supported by the Oncology Nursing Society, the
American Society of Clinical Oncology (ASCO), the Community Oncology
Alliance, US Oncology, and the Cancer Leadership Council, a 29-member,
patient-led coalition of national cancer patient advocacy organizations,
professional societies, and research organizations. The legislation
now has 85 bipartisan co-sponsors.
In their letter of support for The Quality Cancer Care Preservation
Act, the Cancer Leadership Council stresses the importance of
balancing reductions in payments for drugs with what has been
a “severe underpayment for services associated with administering
chemotherapy in the outpatient setting.”
To read the bill in its entirety, go to thomas.loc.gov (type in
H. R. 1622) or the ASCO Grassroots Action Center at www.capwiz.com/asco.
Our goal in the oncology community is to keep you informed of
emerging reimbursement reform initiatives affecting cancer care.
For a succinct discussion of the issues and needs, visit the following
websites:
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