Oncologists are not expected to be a priority with the new Democratic controlled Congress — at least not for now
In the wake of the Democratic sweep in the fall elections, politicians on Capitol Hill put adjustments to Medicare’s cancer drug reimbursement policy on the back-burner.

However, the Center for Medicare and Medicaid Services is still considering reauthorization of the oncology demonstration program, which has been used to shore up a physician payment schedule that most oncologists consider inadequate. The agency provided an estimated $150 million in additional physician payments this year through the demonstration project, which pays doctors for collecting data.

“We’re pushing hard, but if you listen carefully to what CMS is saying, it could be zero next year,” said Deborah Kamin, the American Society of Clinical Oncologist’s chief lobbyist on payment issues. “There isn’t a lot of time and the budget people at OMB {the White House’s Office of Management and Budget} are against it.”

If CMS rejects reauthorizing the demonstration project, community oncologists in 2007 could face the toughest reimbursement environment since enactment of the Medicare Modernization Act in 2003. That law changed oncology drug reimbursement policy to average sale prices plus 6 percent instead of average wholesale prices, which was a backdoor method of reimbursing physicians. It came under widespread criticism for needlessly inflating drug costs.

Oncology organizations including ASCO, the Community Oncology Alliance (COA) and the Association of Community Cancer Centers (ACCC) pushed this year for adjustments in the ASP rates. But champions of that approach suffered a major setback in November when Rep. Nancy Johnson, a Republican from Connecticut who chaired the House Ways and Means health subcommittee, lost her seat. She held hearings on the issue last July.

“We’re going to miss her immensely,” said Dr. Frederick Schnell, president of the COA, who predicts a major shift in infusion therapy to hospital settings. “There’s nothing on the immediate horizon that will replace what physicians are scheduled to lose next year.”

Oncology is unlikely to be a major focus of the new Congress when it considers Medicare early next year. A Democratic staffer for the incoming leadership said the House, where spending bills originate, will probably focus on physician reimbursement rates, which are scheduled to fall by 5 percent next year under CMS rules announced in early November.

Medicare projects spending $61.5 billion on physician fees next year under Part B, which covers the outpatient fee-for-service program. Reimbursements for physician fees and services have grown at double-digit rates throughout this decade, largely because of an increases in the number of office visits and the intensity of services ordered during those visits. Since 2002, physicians fees alone have increased at less than the rate of inflation, and in some years they’ve actually fallen.

Next year’s projected cut in the fee per service is based on a complicated formula known as the “sustainable growth rate” that uses factors such as overall economic growth and increases in total Medicare spending to adjust physician fees. Every year since the Deficit Reduction Act that created the SGR, the formula dictated a cut in physician reimbursements. And every year, Congress has reinstituted the old rates.

Major physician lobbying groups including the American Medical Association have launched a major lobbying blitz to get the new Congress to do the same thing when it convenes in January. “People are calling for tying the SGR to medical economics,” said Matthew Farber, policy coordinator for ACCC. “But that would cost $200 billion over 10 years.”

Rep. Pete Stark (D-CA), who will replace Johnson as health subcommittee chair, has vowed to make physician reimbursements a major focus of his efforts next year. He’s asked the Medicare Payments Advisory Commission for a report, which is expected in March.

In the meantime, he and Rep. John Dingell, incoming chairman of the Energy and Commerce Committee who will have a major say in Medicare changes, will probably push for a temporary fix, just as Congress has done under the Republican leadership the past four years. “We won’t see much in the lame duck session,” predicted Farber. “But we’ll see a lot of action in January to take some retroactive measures.”

The final rule announced in November did make some minor adjustments that could improve cancer care for seniors. It exempted colorectal cancer screening from the Part B deductible to encourage greater use of this benefit. While the five-year survival rate for colon cancer is 90 percent if it is caught early, about two-thirds of patients present with more advanced disease. Less than 10 percent of patients survive five years with metastatic colon cancer.

“CMS believes that paying more for screening services to detect and treat health problems early will improve the quality of life for Medicare beneficiaries while saving money for both the beneficiaries and taxpayers,” said Leslie Norwalk, the interim CMS administrator.

—By Merrill Goozner

Posted on December 4, 2006 06:00 AM