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Fight brews in U.S. Congress on Medicare cancer drug payments
Todd Zwillich
Last Updated: 2003-06-24 17:13:26 -0400 (Reuters Health)
WASHINGTON (Reuters Health) - A group of lawmakers is attempting to restore cuts embedded in Medicare reform legislation that they say could deprive patients and their doctors of up to 30% of federal payments for cancer treatment.
The cuts are part of a move to reform the way Medicare pays for cancer chemotherapy and other drugs that must be administered by a doctor. Congress has long wanted to fix an existing formula that reimburses physicians and clinics according to the average wholesale price (AWP) of the drugs.
Medicare officials have been highly critical of using the AWP, arguing that it grossly overpays physicians for services because it is based on inflated price reports generated by the pharmaceutical industry.
Government estimates have put the AWP overpayments as high as $1.2 billion per year, prompting calls to lawmakers to change Medicare's payment rules.
But a group of House and Senate members said Tuesday that proposed fixes currently circulating in Congress would reduce payments for the drugs without adequately increasing doctors' payments for time, overhead, and other expenses.
Rep. Charles Norwood, R-Ga., said Tuesday that proposed cuts in two House bills designed to add a prescription drug benefit to Medicare amount to $510 million in reductions for cancer care, nearly a third of what Medicare currently spends.
"It's not only not good, it is knowingly flawed," Norwood said of the bills Tuesday. Norwood and other lawmakers said that they would attempt to offer a proposal replacing the AWP payments based on the substantially lower average sale price (ASP) of drugs.
Norwood would add 20% to the ASP to meet doctor's costs of providing cancer care and use the savings to increase payments to oncologists and nurses for the management of cancer patients.
"If they don't fix that portion, I don't know how I can vote for the bill," said Norwood, who is also leading a bipartisan group of lawmakers in negotiations with the House leadership over the structure of the Medicare prescription drug benefit.
Republicans seemed sour on Norwood's proposal, suggesting that it would end up costing Medicare billions in scarce resources.
Rep. Nancy Johnson, R-Conn., said that the House is likely to consider a proposal this week that offers physicians a lower reimbursement for drugs but still changes Medicare's formulas so that they use oncologists' own estimates of their costs. The results would be higher payments for cancer management, though the increase would be substantially lower than those in Mr. Norwood's proposal.
The changes are still likely to add approximately $190 million per year to physicians payments for managing cancer care, though cuts to reimbursements for drugs would be substantially more, according to Republican House aides.
"Some of the price increases that have gone on (using AWP) have not been legitimate and have not been crucial to good care," Mrs. Johnson, who chairs the Ways and Means health subcommittee, said in an interview.
The bill scheduled to reach the House floor later this week would not contain cuts "anywhere near" the $510 million Mr. Norwood projects, she said.
House Majority Leader Tom DeLay, R-Tex., said that negotiations were ongoing on how to fix the payments, though he suggested that remedies already contained in separate bills approved by two committees would be adequate.
In the Senate, two Republicans and one Democrat plan to offer an identical proposal to Mr. Norwood's. Medicare legislation on the floor this week temporarily cuts Medicare's payment for drugs by 10% but orders Medicare administrators to revamp their formulas for paying for oncology and other infusible drugs.
"Unfortunately, many in Washington have advocated fixing the overpayment for the drugs and ignored the underpayment for administering the drug," said Sen. Sam Brownback, R-Kan., who is sponsoring the change with Sen. Don Nickels, R-Okla., and Sen. Bill Nelson, D-Fla.
Tom Scully, the Bush Administration's Medicare chief, said in an interview that he would fight the proposal if it is offered during Senate debate. "Instead of being a savings, the (bill) would end up costing a couple of billion dollars," said Scully, director of the federal Centers for Medicare and Medicaid Services.
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