Question:

What does the new Medicare Modernization Act mean for cancer patients?

Answer:

On Monday, Dec. 8, 2003, President George W. Bush signed into law the Medicare Modernization Act (MMA) that, for the first time ever, extends Medicare coverage to prescription drugs. In that measure, however, were provisions imposing the largest Medicare cuts ever made and changes that could impact cancer treatment directly.

How such a contradiction came about, the response, and what lies ahead are important issues for the cancer community as it faces 2004, 2005, and beyond.

Medicare’s History

Established in 1965, the Medicare program was designed to cover seniors’ healthcare. Since today’s medical breakthroughs had yet to be developed, the legislation did not provide significant coverage of drug therapies. A smaller class of medications—including many types of cancer therapies—was covered because these medications were provided in a physician’s office. The many prescription drugs that can be prescribed for home use were not covered, which has caused serious medical and financial strain on senior citizens. The MMA of 2003 was designed to correct that shortfall.

For years, Medicare paid for cancer therapies and other drugs using a system called Average Wholesale Price (AWP). The problem, however, was that Medicare’s AWP-based payments were often higher than the actual cost of those drugs, meaning Medicare paid physicians more than the drugs cost. This payment flaw has long been documented, with the understanding that drug payments covered the cost of practice expenses that Medicare did not cover or covered inadequately, including patient support services, oncology nursing services, supplies, and equipment—all universally recognized as integral to the delivery of safe, quality cancer care.

The Solution

A simple solution was sought by the cancer community. They wanted to correct both the way in which Medicare pays for drugs and practice expenses, thereby achieving balanced reform that would not impose access-endangering losses. The plan: Replace AWP with Average Sales Price (ASP) plus 12%, which would direct $550 million to practice expense underpayment.

Just as important, this reform proposal would still reduce Medicare costs by $8 billion over the next 10 years, thereby saving seniors an estimated $1.6 billion over the same period of time through drug co-payment reductions.

Despite the impassioned efforts of the entire cancer community, the new legislation cuts $11.5 billion from Medicare funding for the treatment of cancer and other critical illnesses. Worse still, this cut is expected to have its greatest impact on communities that can least withstand the hit—rural, culturally diverse, and low-income communities served by small cancer care facilities that rely on the practice income from Medicare to cover costs. With more than four out of five cancer patients being served in community-based practices, many are concerned the impact of this cut could be devastating.

The Tribute

As disturbing as these cuts are, the legislative outcome could have been even worse. Initially, the Senate proposed cuts totaling $16 billion, and the House passed a cut of $13.4 billion. It was then rumored that key decision-makers on Capitol Hill would simply “split the difference” between the two levels, resulting in cuts totaling an estimated $14.7 billion—or a reduction in funding of nearly $1.5 billion per year, the largest funding cut ever proposed.

In an unprecedented show of unity and resolve, the nation’s cancer community—including patients, advocates, researchers, caregivers, cancer centers, and other concerned citizens—mobilized in an effort to preserve patient access to care. Key lawmakers circulated letters opposing the cut and spoke out in favor of balanced reform.

The final legislation reduced Medicare payments by $11.5 billion. As numerous lawmakers and Washington “insiders” pointed out, this outcome would simply not have occurred had it not been for the engagement and passion of the entire cancer community.

The Test

And yet, the threat facing cancer patients remains. Although billions were preserved, the fact remains that the new prescription drug legislation cuts more than $1 billion from Medicare each year over the next 10 years, an unprecedented reduction that could have a dramatic impact on cancer care, especially in the vulnerable communities previously described.

The former Medicare formula for paying 95% of a drug’s AWP changed, effective in 2004, to 80-85% of AWP, and will change to an ASP plus 6% in 2005 and beyond. This new basis for drug reimbursement may not cover the full cost of many of the newer, more effective targeted therapies, making these therapies unavailable in the community oncology treatment setting.

While $500 million was added to the Medicare Part B budget to increase practice expense reimbursement for 2004, MMA calls for this essential increase to be reduced to approximately $300 million by 2006. This reduction means that in 2004, an election year, Medicare reimbursement for treatment and supportive care services will be nearly adequate. However, the scheduled removal of these funds is likely to precipitate patient access problems immediately after the election and beyond.

What You Can Do

Recognizing that patients could lose access to needed care, top lawmakers pledged to change this legislation if it became evident Americans were losing access to care. As a result, the community faces an important test in 2004 of doing everything it can to mitigate the impact of these cuts so patients are not harmed by the legislation—and to document every instance in which such harm occurs.

To meet this challenge:

• Surveys and analyses are critical since the information lawmakers have requested must be comprehensive and evidence-based. Fortunately, work is already under way on studies that will determine: the extent to which cancer care facilities are forced to close or consolidate as a result of the new legislation, whether seniors have to receive treatment in hospitals rather than in their community care center, and the extent to which patient access to charity care and clinical research is impacted.
  
• People are encouraged to visit the National Patient Advocate Foundation website at www.npaf.org. NPAF is establishing a national data management project called Access Watch (www.accesswatch.org) to document the risk factors and patient access problems associated with the cancer cut provisions within MMA.
  
• The cancer community will need to continue advocating for coverage of oral anticancer therapies. For years, the cancer patient and provider communities have worked to get an oral chemotherapy drug benefit added to the Medicare program. Unfortunately, such a benefit was not included in the MMA for when seniors will need it most: 2004 and 2005, when all other cancer therapies will be impacted by the MMA’s unprecedented cuts.
  
  Instead, a two-year demonstration project covering oral drugs for approximately 50,000 patients in only six states was included in the final legislation. Just as troubling, only an estimated $200 million (less than half) of the demonstration project’s funding will benefit seniors with cancer.
  
• The engagement of the nation’s entire cancer community must continue. With many concerned lawmakers determined to take corrective action if the legislation unintentionally reduces patient access, the community’s engagement and the data lawmakers have requested will be of critical importance.
  
  And the near future could be the time when balanced reform is finally and truly achieved.
  
  Editor’s note: Meet with Leo Sands and NPAF Executive Director Nancy Davenport-Ennis at the CURE Patient & Survivor Forum in May.