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WASHINGTON – Democrats and Republicans at a recent House hearing agreed on one thing: that budget cuts to Medicare Part B are hurting both doctors and patients.
At issue are automatic, across-the-board cuts under sequestration to both Medicare Part B payments for drugs administered in physicians’ offices and cuts to the fees physicians are paid to administer those drugs.
Rep. Joe Pitts (R-Pa.), chairman of the House Energy and Commerce Committee’s Subcommittee on Health, said that these sequestration cuts were not only putting the squeeze on physician practices, but also potentially harming patients.
"Reimbursement rates have caused the shift of some patient populations such as those with primary immune deficiency diseases and other rare diseases, from treatment in the physician office to treatment in the hospital outpatient department – arguably the worst setting for someone with a compromised immune system," he said at the subcommittee hearing held June 28.
When sequestration went into effect April 1, Medicare physician pay was cut 2%. Part B payments for drugs also were cut by 2%.
Courtesy Rep. Renee Ellmers
Rep. Renee Ellmers (R-N.C.) has introduced legislation to exempt Part B drugs from sequestration.
But the impact has been much greater, testified Dr. Barry Brooks, an oncologist based in Dallas. The two cuts together have amounted to a 28% reduction in payment for certain services, he said at the hearing. "It has put us underwater."
Rep. Renee Ellmers (R-N.C.), a member of the Health subcommittee, noted that she had introduced a bill to exempt Part B drugs from sequestration – the Cancer Patient Protection Act of 2013 (H.R. 1416), which at press time had 91 cosponsors in the House.
"I feel very strongly we need to pass this piece of legislation," Rep. Ellmers said. She added that while sequestration was necessary, it had resulted in unintended consequences, such as harming Medicare patients with cancer.
But Rep. Henry Waxman (D-Calif.), who also serves on the Health subcommittee, said that that had not been an unforeseen possibility. He said that sequestration should not have gone into effect, as "it was supposed to be so ridiculous that we would avoid it."
Meanwhile, he said he did see a need to potentially pay less for Part B drugs.
Last October, the Government Accountability Office analyzed the 55 highest-cost drugs paid for by Medicare Part B, and found that they represented 85% ($16.9 billion) of the almost $20 billion Part B spent on drugs in 2010, according to testimony from James Cosgrove, director of health care at the GAO.
The 10 most costly drugs accounted for about 45% of all Part B drug spending that year. The top 5 were epoetin-alfa (Epogen, for dialysis-related anemia), rituximab (Rituxan, for lymphomas and rheumatoid arthritis), ranibizumab (Lucentis, for age-related macular degeneration), bevacizumab (Avastin, for colorectal cancer, breast cancer, kidney cancer, and glioblastoma), and infliximab (Remicade, for rheumatoid arthritis, psoriatic arthritis, and Crohn’s disease).
"We should make sure Medicare is getting a good deal," Rep. Waxman said, suggesting that negotiations with drug makers or seeking rebates might be one way to cut costs.
Dr. Brooks also complained that hospitals eligible to buy drugs through the federal 340B discount program can get chemotherapy drugs at lower cost – and are reimbursed at a higher rate – that can community oncologists. Meanwhile, patients may have to travel farther to receive care at a hospital, and pay higher out-of-pocket costs, he said.
Another area of concern for oncologists, rheumatologists, and others who administer Part B drugs: the prompt pay discount. Medicare includes those discounts from manufacturers when it calculates how much it reimburses physicians, which essentially leads to a reduction in their pay. That policy has meant that oncologists haven’t been able to cover costs for years, Dr. Brooks said.
Rep. Ed Whitfield (R-Ky.) and Rep. Gene Green (D-Tex.) have introduced legislation to exclude those discounts. The bill, H.R. 800, has 56 cosponsors in the House, and a companion was introduced in the Senate by Pat Roberts (R-Kan.).
Community oncology practices are feeling the pressure. According to a recent survey by the Community Oncology Alliance, in the past 15 months, there has been a 20% increase in clinic closings and a 20% increase in practices that have become affiliated with or been bought by a hospital.
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