- The Washington Times - Monday, June 23, 2003

A fight is being waged over what cancer treatment groups say are dangerous cuts in their funding under the House and Senate Medicare prescription-drug bills now inching toward passage.

“We’re concerned about what will happen if these cuts go through,” said Deborah Kamin, senior director for cancer policy and clinical affairs at the American Society of Clinical Oncology (ASCO). “A number of oncologists have said they will no longer be able to provide [outpatient] chemotherapy.”

ASCO and others will join Reps. Charlie Norwood, Georgia Republican, and Lois Capps, California Democrat, in protesting the House bill’s cuts in a press event today. Oncologists would get a 30 percent cut, or about $500 million less the first year the House bill is in effect, said Rodney Whitlock, Mr. Norwood’s deputy chief of staff.

Those crafting the bills are trying to fix what they say is a faulty system of how Medicare reimburses doctors for cancer drugs. The government often grossly overpays doctors under the setup.

“For us to let this system go on one more day is outrageous,” House Energy and Commerce Committee Chairman Billy Tauzin, Louisiana Republican, said Thursday.

Oncologists concede they are overpaid for drugs, but say they use the extra money for the high costs of administering chemotherapy in a doctor’s office — things like oncology nurses, special equipment, and disposing of hazardous chemical waste. They say Medicare has drastically underfunded them in this area.

Though they take markedly different approaches, the House and Senate bills both would change the system to reimburse at lower, more accurate prices. To make up for this, the bills also propose boosting payments for oncologists’ general administration costs. But oncologists say the net result is still a funding cut they can’t bear.

“It could effectively shut down outpatient cancer treatment in this country,” said Jackie Barnum, an oncology nurse and office administrator for Annapolis Medical Specialists, which has five doctors who see 100 to 150 cancer patients per day.

Currently, drug makers list the average wholesale price (AWP) of their drugs and health care providers is reimbursed 95 percent of that cost. Medicare pays 80 percent and the patient pays 20 percent co-payment. But AWP is often highly inflated compared with what doctors actually paid for the drugs, so the government ends up overpaying.

The Health Department’s Office of Inspector General and the General Accounting Office estimate drug overpayments cost the government more than $1 billion each year. Oncologists received $700 million extra, while cancer patients had to pay $177 million extra in 2000, according to government studies.

“This cancer tax is an unnecessary burden on our most vulnerable patients,” said a June 19 letter to House members from Ways and Means Committee Chairman Rep. Bill Thomas, California Republican.

The Senate bill would lower the reimbursement rate to 85 percent of AWP, at an estimated savings to the government of $16 billion over 10 years. The Senate bill also would boost payments to oncologists by about $250 million for their general administration costs.

The House bill would get rid of AWP and set up a new system under which Medicare would reimburse independent contractors who in turn would provide the doctors with the cancer drugs they request.

Miss Barnum said if doctors had to go through independent contractors, it would result in “delay in treatment,” for patients, and “an administrative nightmare for us.”

Doctors could opt under the House bill to be directly reimbursed for drugs at the more accurate average sale price (ASP). During his panel’s markup of the bill last week, Mr. Tauzin added an extra 12 percent to the ASP reimbursement, resulting in more than $200 million extra to doctors. It is not clear whether this will be in the final House bill.

The House bill would also give doctors a $190 million boost in payments for general costs of administering cancer drugs — which oncologists say is not enough

A Tauzin spokesman said the House changes would save the government an estimated $8 billion over 10 years.

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