Oncologists blast Medicare part B recommendations, predict higher costs for beneficiaries

Oncologists have spoken out against Medicare Part B reimbursement recommendations that they say would backfire and end up costing beneficiaries more, not less.

In a March 24 letter, the Community Oncology Alliance said it disagreed with the Medicare Payment Advisory Commission's Medicare Part B recommendations released earlier this month.

"If implemented, these recommendations will cause the complete opposite of their intent, fueling more increases in Part B costs for Medicare and beneficiaries," said President Jeff Vacirca, MD.

The recommendations ignore the shift of cancer care to the hospital setting, he said.

Before 2004, about 84 percent of chemotherapy was delivered in cancer clinics. That figure is now 54 percent. The remainder have moved to more expensive hospital outpatient settings where the payment is better, according to Vacirca.

[Also: CMS nixes Medicare Part B proposal]

MedPAC recommendations would further lower Part B drug reimbursement, which would accelerate the shift of cancer care to more expensive hospital settings, according to the letter.

Lower reimbursement will only accelerate practices being pressured to be acquired by hospitals.

Medicare's payment system for drugs is based on the average sales price plus 6 percent, to cover overhead. However, sequester cuts have reduced that amount.

"We also do not understand why MedPAC is so focused on the 6 percent add-on to ASP which ignores the reality that … it is now closer to 2 percent with the prompt-pay and sequester cuts," the letter said.

For clinicians, the 2 percent must cover the costs of drug procurement, inventory, storage, monitoring, and waste disposal.

But 340B hospitals have margins of upwards of 100 percent on Part B drugs that is pure profit, with absolutely no requirement that those profits be used to help patients in need, Vacirca told MedPAC Commissioner Francis Crosson, MD.

[Also: New bipartisan legislation would allow late Medicare part B enrollment]

The expansion of the 340B program, requiring drug manufacturers to provide outpatient drugs at reduced prices, gives hospitals that see substantial profits on cancer drugs incentives to acquire community cancer clinics, Vacirca said.

The shift from cancer care into the more expensive hospital setting has been documented as increasing costs to Medicare, he said. In 2014,  this shift cost Medicare $2 billion more than it would have if the site-of-service had remained in the community practice setting.

The Community Oncology Alliance also disagrees with MedPAC's recommendations to have third-party, pharmacy benefit managers negotiate Part B drug prices.

The idea of creating a formulary to induce competition in price negotiations, administered by PBM is reckless, he said, creating obstacles to beneficiaries getting care decisions from a physician, rather than from a "profit-seeking PBM-type entity."

Physicians regularly see 30 to 45 day delays in getting medication for patients from pharmacy benefit managers because of PBM bureaucracies, he said.

Cancer drugs have few generic alternatives.

In its March report, MedPAC said that between 2014 and 2015, inpatient payments increased by $2 billion, resulting from an increase in payment rates of about 1 percent and a slight increase in inpatient volume.

In the same period, outpatient spending per fee-for-service beneficiary grew by 7 percent. The nearly $4 billion increase in outpatient payments resulted from a 2.2 percent increase in 2015 payment rates, a 15 percent increase in payments for Part B drugs, an increase in outpatient volume, and a shift in services from physician officers to higher paying hospital sites of care.

MedPAC reiterated its site-neutral payment recommendations between hospital outpatient departments and physicians' offices.

Twitter: @SusanJMorse