Medicare chemotherapy picture murky

A proposed rule does little to clear up problems in drug pricing for cancer care, physician organizations say.

By Markian Hawryluk, AMNews staff. Sept. 1, 2003.

Washington -- After years of uncertainty about how Congress or the Bush administration would address Medicare overpayment for physician-administered drugs, Medicare officials offered a proposed rule -- and more uncertainty.

In August, the Centers for Medicare & Medicaid Services issued a rule suggesting four possible approaches to reducing reimbursement for injectable or intravenous drugs provided in conjunction with outpatient physician services. The rule also would increase practice expense payments to oncologists and other practitioners who rely on overpayments for those drugs to make up for under-reimbursement for practice costs.

Physician groups, including the American Society of Clinical Oncology, have said they support accurate payments for drugs and practice costs with no cross-subsidies.

"Medicare payment, in general, needs to focus on economic reality -- not just arbitrary formulas," said AMA President Donald J. Palmisano, MD. "While we recognize that some changes need to be made in the way Medicare pays for drugs currently covered by Medicare, any modification must insure that physicians are adequately compensated for the full cost of acquiring and administering the drugs."

But many doctors are concerned that the net result of the revisions will be a substantial cut in payments for cancer care and potential access problems for beneficiaries.

"These effects will be felt most severely in rural areas, where community clinics that are a lifeline for cancer patients may be forced to close," said Deborah Kamin, ASCO's senior director of cancer policy and clinical research.