WASHINGTON — Cuts to Medicare payments due to the budget sequester have hit reimbursements for cancer drugs, according to a nonprofit group.
The Community Oncology Alliance released results Thursday of a survey of oncologists from around the country on the effects of the sequester cut to Medicare payments, finding that the 2% cut has "inordinately" affected community oncology practices because it is a cut to the underlying cost of cancer drugs, placing many of them "under water" — meaning that the reimbursement by Medicare is less than the drug's purchase price. The survey was based on a poll of 326, accounting for 1,650 oncologists who see a total of 728,721 Medicare patients per year.
Most cancer patients are treated in office-based practices, and 69% of those surveyed said patient treatment and operational changes had already been made due to the cut. These include 49% of practices that had to send Medicare patients elsewhere for treatment and 62% who said they would have to send them elsewhere if the cut stays in place through July 31. Meanwhile, 21% said they were laying off staff, and 38% would be forced to if the cuts stay in place this summer. More than 1,200 community cancer practices have closed, consolidated or reported financial problems since 2008.
"We are now seeing the cascading effects of sequestration," COA president and Columbus, Ohio-based oncologist Mark Thompson said. "Many practices are now sending their Medicare patients to hospitals for chemotherapy, while others are laying off staff. Practices are so financially threatened that discussions of merging with a hospital - despite the increase in cost of care to the patients and the system - are being reopened."
According to the survey and a study conducted by actuarial and consulting firm Milliman, the sequester cut will cost Medicare $450-600 million per year because of the shift to more expensive care in hospitals.