Grin and bear it: Oncologists find reason to smile about Medicare cuts

The oncology community is happy about next year’s cut in Medicare reimbursement. Well, maybe not so much happy as relieved.

Last summer, to the collective horror of oncology leaders, the Centers for Medicare and Medicaid Services floated the idea of a 6% cut in the 2010 physician fee schedule for Medicare. ASTRO and ASCO pulled out all the stops, conducting surveys to determine the impact of such cuts and calling on its members to give their Congressional representatives an earful.

A few weeks ago CMS, in its final schedule, announced cuts totaling just 1% next year. Additional cuts would be phased in over four years, bringing the total reduction in Medicare payments to an estimated 5% to 6%.

In the days and weeks following the Oct. 30 announcement, leaders in the oncology community claimed victory. If the full weight of the proposed changes had struck oncology, the profession—and its patients—might have been drastically changed, they said.

ASCO projections indicated that in some communities, practices comprising largely older patients reliant on Medicare would simply “not have been able to make ends meet” and would have ceased to exist, said Dr. Allen Lichter, ASCO’s chief executive officer. Other practices might have been able to consult with cancer patients but would not have been able to actually provide treatments. Consequently, many patients would have been forced to receive treatments at large hospitals.

“The hospital capacity would not have been there to take care of all the patients, and if that had happened, there would have been delays in treatment and patients would have suffered,” Dr. Lichter said.

The crux of the problem was CMS’s proposal to change the equipment utilization rate. If the initial proposal, to adjust the equipment utilization rate for radiation therapy equipment from 50% to 90% for equipment costing more than $1 million, had been put in place, radiation oncology payments would have been cut by 19%.

CMS has since dropped its proposed change in the utilization rate. It kept, however, other cuts. A bitter pill is the loss of consultation codes, which provide reimbursement for the time oncologists spend analyzing patient data from new patients and consulting with the physicians who referred them. These codes have been entirely eliminated in both the inpatient and outpatient/office settings for not only oncologists but all specialists, including cardiologists and orthopedic surgeons. Sharing the pain doesn’t make the loss of the codes any easier to bear, according to Dr. David Beyer, vice president of Arizona Oncology Services, which operates six free-standing radiology oncology centers in the Phoenix area.

“We are going to take a big hit in both medical oncology and radiation oncology because a substantial number of our new patients come to us through consultations, and there is more work in a consultation than a typical office visit,” he said. “This is CMS’s way of revaluing some of our practice expenses and we don’t believe it correctly values us.”

All agree that the 1% cut in the Medicare physician fee schedule for next year is a step backwards for oncology. But it is a step community leaders view as good news.

“We have to view this as good news in the context of what might have been,” Dr. Beyer said. “What was proposed, quite frankly, would have been devastating to our specialty.”