CMS will propose a rule to reduce Medicare reimbursements to physicians for administering chemotherapy drugs if Congress does not take action to overhaul the existing payment mechanism, Administrator Thomas Scully says.
In an interview published Friday on Dow Jones Newswires, Scully says CMS is prepared to draft a regulation that would call for cutting payments for oncology drugs to bring reimbursements more in line with the actual costs for healthcare organizations to acquire the drugs. Scully also indicates a preference for boosting reimbursements to clinics for outpatient chemotherapy.
CMS spokesperson Peter Ashkenasz confirmed the accuracy of the Dow Jones report and says that Scully made similar comments to a cluster of reporters about a week ago.
"It's an incredibly stupid system," Dow Jones quotes Scully as saying about the current formula, which pays physicians 95% of the average wholesale price set by pharmaceutical companies. Medical practices and hospitals routinely receive deep discounts off the published AWP and pocket the difference between actual price and reimbursement.
However, physicians receive just 25% of the cost of administering drugs to Medicare cancer patients and no additional payments for the nurses, pharmacists and other ancillary providers that often are part of the chemotherapy process.
According to Friday's report, Scully says, "Drugs are massively overpaid and services are more marginally underpaid." Dow Jones says that Scully does not give details of what CMS might propose if Congress does not legislate changes to the current system.
The chemotherapy payment issue is not part of bills intended to create a Medicare prescription drug benefit but is addressed in the Quality Cancer Care Preservation Act, HR 1622, introduced April 3 by Reps. Charlie Norwood (R-Ga.) and Lois Capps (D-Calif.). The oncology bill has been referred to the House Ways and Means Committee and the House Energy and Commerce Committee.