President's Proposed Budget Doubles Down On Sequester Cut
To Cancer Drugs; Jeopardizes Cancer Care For Seniors
April 12, 2013
/PRNewswire-USNewswire/ -- The President has released his proposed budget for fiscal year 2014, which proposes new reductions for cancer care services. Taken in combination with existing strains imposed by sequestration, this proposal threatens access to care for some of America's most vulnerable: elderly patients with cancer. In addition to reduced payments for cancer fighting drugs, the Administration has proposed new limitations on imaging technology used to diagnose and manage cancer. Cast by the President as strategies for improving long term solvency of the Medicare program, these proposed policies will, instead, have the effect of increasing cost to the Administration. By straining community oncology clinics to their breaking point, the Medicare program will push practices to either limit Medicare services or close their doors altogether. That will send patients to more expensive settings for treatment. Over the past two weeks, our organizations have urged Congress and the Administration to reverse the cut to cancer drugs imposed by sequestration and we object in the strongest possible terms to any proposal that would add to the existing crisis.
The President's budget proposes to cut Medicare reimbursement from Average Sales Price (ASP) of cancer drugs plus the 6 percent facilities/operations services fee to ASP plus 3 percent. As it is, the Medicare payment rate for drugs set at ASP plus 6 percent is in actuality closer to a total of ASP plus 2 percent because Medicare's payment formula includes prompt pay discounts manufacturers provide to drug wholesalers but which are not available to cancer clinics. Added to that is the fact that many patients without secondary insurance often cannot afford copayment for increasingly expensive anti-cancer drugs, a problem that has increased the burden of bad debt for many practices. As a result, even at ASP plus 6 percent, many cancer drugs are reimbursed by Medicare at less than their total costs of acquisition, storage, and handling.