CMS: Medicare cancer drug pay not spared from sequestration

The Centers for Medicare & Medicaid Services has clarified that it does not have the authority to exempt cancer treatments for seniors from reduced payments required by federal budget cuts known as sequestration.

A bipartisan group of more than 100 House lawmakers wrote CMS Administrator Marilyn Tavenner an April 23 letter expressing concern about sequestration and its impact on care for Medicare beneficiaries, including cancer patients undergoing chemotherapy. The representatives’ letter was sent after a Washington Post article reported that some oncology practices were directing patients elsewhere for care because of rate cuts to expensive physician-administered drugs.

Congress ordered more than $1.2 trillion in automatic cuts to government programs through sequestration in the Budget Control Act of 2011. Medicaid and Social Security were spared from reductions, and decreases in Medicare spending were capped at 2%. The decreased Medicare pay began April 1 and will continue through 2021.

In a recent American Society of Clinical Oncology survey, 80% of respondents said sequestration cuts had affected their practices. Half of those surveyed said they were not able to continue caring for Medicare beneficiaries unless the patients had supplemental insurance. Beneficiaries were being directed to hospital outpatient infusion centers for chemotherapy.

CMS lacks the authority to exempt cancer drugs paid under Medicare Part B from sequestration, Tavenner replied in a June 3 letter to lawmakers. The program typically pays 106% of the average sales price for such doctor-administered drugs. Under sequestration, the program instead will pay 104.3%, according to a theoretical example cited in the letter. Doctors have complained that the rate reduction makes it too costly for practices to purchase and administer the medications themselves.

The American Medical Association has opposed all Medicare cuts resulting from sequestration and has urged Congress to restore full payment rates to physicians.