Oncology Groups Protest Prospective Cut in Chemotherapy Reimbursement

October 1, 2001

Oncology groups are unhappy with the prospect that Medicare payments for chemotherapy drugs provided in outpatient settings could drop drastically in 2002. The Centers for Medicare and Medicaid Services (CMS) is considering a cut for

Oncology groups are unhappy with the prospect that Medicare payments forchemotherapy drugs provided in outpatient settings could drop drastically in2002. The Centers for Medicare and Medicaid Services (CMS) is considering a cutfor what are termed "pass-through payments," because those payments—madefor the most expensive and up-to-date drugs and medical devices—have increasedabove the 2.5% cap set by Congress as part of a new Medicare out-patientreimbursement system. Congress said that if pass-through payments rise above2.5% of all ambulatory care costs, then the administrator of CMS must makereductions in those payments. Projections for 2002 show that pass-throughpayments could potentially reach 10%.

In a letter to Thomas Scully, administrator of the CMS, three members of theHouse Ways and Means Committee—two Republicans and one Democrat—complainedabout what they believe will be 60% to 80% reductions in Medicare reimbursementsfor that class of cutting-edge drugs. The three were Chairman Bill Thomas (R-Calif),Nancy Johnson (R-Conn), chairman of the health subcommittee, and Pete Stark (D-Calif),ranking Democrat on the health subcommittee. They argued that CMS should waituntil April 1, 2002, before cutting payments for pass-through items such aschemotherapy drugs, and then only if the agency has come up with a better methodof determining what the actual increase in pass-through payments has been. TheAssociation of Community Cancer Centers (ACCC) is working with CMS and Congressto avert a precipitous decline in Medicare payments for chemotherapy agents. Atpress time, the ACCC intended to file written comments with the agency byOctober 3, 2001.