There's still some time remaining in the comment period for HCFA's regulations for the outpatient prospective payment system set to take effect next year. The deadline is June 30.
But cancer treatment advocacy groups have already weighed in with their comments criticizing the system, which they say may create incentives to skimp on patient care.
Medicare now reimburses providers for chemotherapeutic drugs on a cost-plus basis. Oncology practices derive a good portion of their margins from markups on those drugs, experts say, although those margins vary widely.
Medicare is the largest payer in the outpatient treatment of cancer, accounting for 22% of revenues at the 806 centers surveyed in 1998 by SMG Marketing Group, a Chicago-based healthcare information and consulting firm. Outpatient cancer-care centers could be hit hard by the new system, but it's still unclear whether centers that operate independently from hospitals will be paid under the PPS. There are no cancer-specific estimates for the expected payment squeeze. Overall, hospitals may face a 5.7% drop in Medicare outpatient revenues (May 17, p. 3).
The regulations, part of HCFA's response to the Balanced Budget Act of 1997, would create ambulatory payment classifications, or APCs, for all outpatient procedures, including infusions of chemotherapeutic drugs. The changes are part of a congressional effort to lower Medicare costs and make them more predictable.
As proposed, APCs would create a payment grouping that includes generic drugs retailing for a few dollars and newly developed drugs that cost more than the per-dose allotment, critics say. Doctors might thus be tempted to prescribe the high-margin generic drugs instead of the newer and costlier but more effective drugs, they say.
Typical of the comments submitted by cancer-related groups are those of the Cancer Leadership Council, which comprises 15 cancer advocacy groups, including the American Cancer Society, the American Society of Clinical Oncology and the National Coalition for Cancer Survivorship.
According to a statement from the Cancer Leadership Council, the payment system would create "perverse incentives" for doctors to prescribe older, less effective medicines.
The proposed system would also fail to pay separately for drugs that inhibit nausea and vomiting, a key supportive therapy that enables patients to withstand high doses of particularly toxic cancer-killing agents.
HCFA officials acknowledge the chemotherapy payment classifications were based on outdated 1992 data and have indicated that the proposed system is open to revision.
Some lawmakers aren't taking any chances. U.S. Rep. Gene Green (D-Texas) has introduced a bill that proposes a carve-out for all cancer treatment from the outpatient PPS. His legislation would exempt cancer treatment from the outpatient PPS system, retaining the average wholesale price-based system currently in use. The bill has not been reviewed for budgetary impact, but aides say that Congress did not specify a target amount for PPS savings on cancer care.