The CMS demonstration project in oncology

Jun 22 2005

The PricewaterhouseCoopers study that the Community Oncology Alliance (COA) commissioned shows that an estimated $13 billion will be saved from Medicare spending for cancer care through 2013. This is $8.8 billion more than the original intent of Congress in passing the Medicare Modernization Act (MMA).

There is at least one silver lining in the new Medicare bill. It offers patients benefits benefits they did not have before, some coverage for oral-chemotherapy drugs (full coverage in 2006). Compared to infusional-chemotherapy, oral-dose anti-cancer drugs can make receiving cancer treatment more convenient for patients by allowing flexibility in taking medication without disrupting work or other activities. This can often result in less time (or no time) spent in office-based oncology practices because of the absence of intravenous administration and its related side-effects.

None of the private-practice oncologists are suggesting giving themselves a pay cut, even though Medicare has boosted reimbursements for administering chemo by 130%. On average, oncologists in private practice made $310,371 in 2002. None of them are thinking of giving a patient oral-chemotherapy, instead of infusional-therapy. I wonder if the extra $130 paid per infusional-chemotherapy recipient per treatment day, helped them to make that decision? (CMS Demonstration Project)

There has been a recent survey of breast cancer oncologists based in academic medical centers and community based, private practice oncologists. The academic center-based oncologists do not derive personal profit from the administration of infusion chemotherapy, the community-based oncologists do derive personal profit from infusion chemotherapy, while deriving no profit from prescribing oral-dosed chemotherapy.

The results of the survey show that for first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists prescribed an oral dose drug (capecitabine), while only 13% perscribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel. In contrast, among the community-based oncologists, only 18% prescribed the oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29% prescribed the expensive, highly remunerative drug docetaxel.

What the new Medicare bill did was to remove the profit incentive from the choice of cancer treatments, which were financial incentives for infusional-therapy over oral-therapy or non-chemotherapy, and financial incentives for choosing some drugs over others. Patients should receive what is best for them and not what is best for their oncologists.

The Community Oncology Alliance (COA) says that the government is reducing payment for cancer care under the new Medicare bill (MMA). However, that's not what they are doing. They are simply reducing overpayment for drugs. The government can't afford to overpay for drugs, in an era where all these new drugs are being introduced, which are fantastically expensive.

The costs of a month's worth of the new drugs Herceptin and Avastin average $8,000. This is not reimbursement or overreimbursement for services; this is simply the cost of the drugs. The thing about drugs like Herceptin and Avastin is that they are pretty much taken chronically, in some cases perhaps for years. The "old" drugs would typically just be given for six months or so.

So cancer patients have a choice. Keep overpaying their oncologists and not have access to new generations of cancer therapeutics. Or keep payments in line with actual costs and perhaps have something left over to help pay for the new drugs.

By continuing the additional $130 per infusional-chemotherapy per recipient treatment into 2006 will exacerbate existing economic and clinical problems instead of resolving them by increasing the temptations for physicians to overuse injectable drugs and promise to aggravate the economic problems Congress attempted to fix with the new law.

Gregory D. Pawelski