Sarah Kliff reports for The Washington Post’s Wonkblog, April 3, 2013, that cancer clinics across the country have begun turning away thousands of Medicare patients, blaming the sequester budget cuts.
Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.
Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York, explains: “If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year. The drugs we’re going to lose money on we’re not going to administer right now.”
After an emergency meeting Tuesday, Vacirca’s clinics decided that they would no longer see one-third of their 16,000 Medicare patients. “A lot of us are in disbelief that this is happening,” he said. “It’s a choice between seeing these patients and staying in business.”
Doctors at the Charleston Cancer Center in South Carolina also began informing patients weeks ago that, due to the sequester cuts, they would soon need to seek treatment elsewhere. “We don’t sugar-coat things, we’re cancer doctors,” Charles Holladay, a doctor at the clinic, said. “We tell them that if we don’t go this course, it’s just a matter of time before we go out of business.”
Oncologists say the sequester cuts are unexpectedly damaging for cancer patients because of the way those treatments are covered. Medications for seniors are usually covered under the optional Medicare Part D, which includes private insurance. But because cancer drugs must be administered by a physician, they are among a handful of pharmaceuticals paid for by Part B, which covers doctor visits and is subject to the sequester cut.
Cancer patients turned away from local oncology clinics may seek care at hospitals, which also deliver chemotherapy treatments but might not have the capacity to accommodate them.
The care will likely be more expensive: One study from actuarial firm Milliman found that chemotherapy delivered in a hospital setting costs the federal government an average of $6,500 more annually than care delivered in a community clinic.
Those costs can trickle down to patients, who are responsible for picking up a certain amount of the medical bills — an average of $650 more in out-of-pocket costs, according to Milliman.
It is still unclear whether hospitals have the capacity to absorb these patients. The same Milliman report found that the majority of Medicare patients — 66% — receive treatment in a community oncology clinic, instead of a hospital.
Non-profit hospitals will likely have an easier time bearing the brunt of the sequester cuts. A federal program known as 340B requires pharmaceutical companies to give double-digit discounts to hospitals that treat low-income and uninsured patients.