Medicare Law Hurts Cancer Patients; Some Find It Harder To Get Chemotherapy

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Medicare Law Hurts Cancer Patients By Rob SteinWashington Post Staff WriterSaturday, February 14, 2004; Page A01 A new Medicare payment system has prompted at least some cancer doctors around the country to drastically reduce the care they provide in their offices, disrupting treatment for many patients.The change has affected hundreds of oncology practices around the country, causing anxiety, uncertainty and turmoil for large numbers of patients. More than half of the 1.5 million Americans diagnosed with cancer each year are covered by Medicare. The new payment system, which took effect Jan. 1, cut the amount of money that Medicare reimburses oncologists for cancer drugs they administer in their chemotherapy centers or send home with patients.Federal health officials and proponents on Capitol Hill say the reductions are a crucial first step in a long-overdue overhaul of an irrational fee structure that gave oncologists huge profits on chemotherapy, making cancer care unnecessarily costly to both taxpayers and patients -- and dangerously prone to abuse. Many cancer doctors, however, say the cuts are having a devastating impact on their practices. Some have begun eliminating nurses and other staff, reducing the attention that patients receive. Practices in some areas have started closing satellite offices, forcing often frail patients to travel much farther, especially in rural areas. Still other doctors say they have stopped administering chemotherapy to certain patients for good, forcing some to check into the hospital to get their treatments."This is the first time in my 25 years in practice that patient convenience has taken a back seat. I don't like it. I don't like it at all," said Milton W. Seiler Jr., a New Orleans oncologist. "A lot of patients are very upset. A lot are quite bitter about the fact that this was foisted on them." While some independent analysts calculate that certain oncology practices may be hit hard, most experts say it is too early to tell whether the changes went too far or whether cancer doctors, who are among the highest-paid specialists, may be putting the wide profit margins to which they have become accustomed ahead of their patients.Supporters of the change say the phased-in three-year change was carefully designed to avoid disrupting or impairing patient care. Most important, the cut in drug payments was accompanied by a major boost in reimbursements to doctors for nurses' pay, equipment and other costs associated with administering chemotherapy, which should offset any shortfalls."It's important to look at both sides of the equation. I'm not sure how much many of these doctors have focused on the actual payments," said Leslie V. Norwalk, acting deputy administrator and chief operating officer for the Centers for Medicare and Medicaid Services. "Patients are our top concern. They shouldn't be harmed at all."Many independent experts agree that the changes were essential for both economic and medical reasons, and that they were calibrated to minimize any chance of harming vulnerable cancer patients. "It's been just a crazy system that is subject to fraud, just not good public policy, and just not a system that should be tolerated," said Robert Berenson, a senior fellow at the Urban Institute.The issue is further clouded by the highly politicized nature of the legislation. The change was included in the law Congress passed to provide prescription drug coverage to the elderly. Democrats are eager to criticize the prescription drug act, which was produced by a Republican-controlled Congress and claimed as a major political achievement by the Bush administration.Before the change, Medicare reimbursed oncologists 95 percent of the "average wholesale price" of chemotherapy drugs, which many studies showed was often far in excess of what doctors paid for the drugs. The fees, which evolved over many years as chemotherapy shifted from hospitals to doctors' offices, had long been criticized for encouraging drug companies to overcharge and for generating excessive earnings for oncologists. The General Accounting Office estimated in 2000 that Medicare paid at least $500 million more for chemotherapy drugs than doctors paid for them."It looked like the equivalent of the DOD [Department of Defense] golden toilet seat issue," Medicare's Norwalk said. "It was like we were paying $200 for a screwdriver."The big profits, many feared, provided a dangerous incentive for physicians to overuse drugs and to use medications that gave them the biggest markups rather than those that were most effective. In addition to costing taxpayers money, the inflated costs forced patients to pay more, since their co-payments fluctuate with the price of the drugs. The inspector general's office at the Health and Human Services Department estimated that in 2000 Medicare beneficiaries paid at least $175 million in excessive co-payments for chemotherapy. Oncologists fought the change bitterly, arguing they needed to be overpaid for the drugs to cover the escalating costs of administering increasingly complex chemotherapy. They set up sophisticated "infusion centers" staffed by highly trained, highly paid nurses and other employees, elaborate equipment and facilities to store and administer the drugs, and sometimes satellite offices to give their often infirm, often indigent patients easier access to care -- expenses Medicare reimbursements did not begin to cover.In response, policymakers devised what they thought was the least disruptive and most effective way to fix the system. They would start by reducing the reimbursements modestly -- from 95 percent to 85 percent to begin -- to bring the payments more in line with the actual costs to doctors. Based on data provided by the doctors themselves, they then paired the cut with a 32 percent boost in payments for administrative costs. The figure was designed to offset, if not exceed, the amount of money doctors would lose in drug payments. Both changes took effect Jan. 1."It is so clear the margins were enormous to begin with," said Meredith Rosenthal of the Harvard School of Public Health. "I think they are still making money on these drugs." Policymakers hoped the change might prompt drug companies to lower their prices, and at least some have dropped some prices. Eli Lilly and Co., for example, cut the price on the cancer drug Gemzar. As a result of such drug company reactions, at least one Washington oncologist resumed treating patients he had started to send to the hospital.But drug prices and operating expenses vary from practice to practice. While overall the change may not reduce Medicare's bill for chemotherapy, some practices could see 20 percent to 30 percent reductions in their revenue, said Daniel Mendelson, president of the Health Strategies Consultancy in Washington.Hematology-Oncology Specialists in New Orleans, where Seiler works , estimates that overall revenue will plummet 15 percent. As a result, the group is closing six of its 10 infusion centers. "We're not a bunch of greedy doctors," said William Stein, another doctor in the practice, the largest outpatient cancer practice in the region. "We're just a bunch of people who spend our lives taking care of sick people. We have to find an economical way to take care of patients with cancer. But this is getting out of hand. We seem to be the only ones who care." Stein said his group so far has referred dozens of patients to hospitals, where the same treatment often costs much more and is far less convenient for patients.That is the case for Betty Capdeville, 66, of Marrero, La., who now spends a night in the hospital every other week instead of going home after a day at her doctor's office getting chemotherapy for a recurrence of mesothelioma."It works out so much better at the doctor's office. You have personal attention, and then you go home. In the hospital, you're here with all the other cancer patients who need a lot of attention," Capdeville said in a telephone interview from her bed at the West Jefferson Medical Center in Marrero. "I'd much rather go to my doctor's office and then be in my home. At home, I know where everything is, and it's much easier on my family." Stein's practice, and those of doctors elsewhere, are also reducing nurses' hours for the patients they are continuing to treat."My nurses would spend a great deal of time on nutritional counseling and on personal care for patients. We're eliminating or minimizing services that we can longer afford to provide," said John Keech, who runs an oncology practice in Chico, Calif. The American Society of Clinical Oncologists (ASCO) has asked the government to reverse the cuts for at least some drugs, saying a survey of 93 oncologists found "many drugs for which the Medicare payment does not appear to cover the price paid by at least some physicians." But ASCO officials say they are even more concerned about the next two years, when deeper cuts may further erode cancer doctors' profits. In 2006, the system will change again, giving doctors the option of obtaining drugs directly through Medicare.Patient advocates said their biggest fear is that as doctors are squeezed, they may begin offering the most affordable treatments -- rather than the most effective."The scariest part is to get a doctor who would know about a treatment that would be better but would not bring it up because he doesn't provide it. That's what I'm terrified about," said Dani Grady, a patient advocate from Coronado, Calif. Some doctors may also become less willing to continue treating patients who don't seem to be responding to chemotherapy, Grady said. "I can see the idea of hospice care coming up sooner," she said.The Medicare Payment Advisory Commission, an independent body that advises Congress, will monitor the effects of the change and make recommendations for changes if problems are found, officials said."In the meantime," said Medicare's Norwalk, "it would be terrific if the oncologists would sit back and just take a look at the actual numbers before they act."http://www.washingtonpost.com/ac2/wp-dyn/A40806-2004Feb13?language=printer