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Cancer Care Rests in the Community -- and in Logical Medicare Payment Policies | Commentary

Itís not often one can claim to be part of a process that is successful and the best in the world. Iím lucky and thankful that I can make such a claim.

As a community oncologist for more than 30 years, I am proud to be a small part in the worldís most effective and successful cancer care delivery system. After nearly 100 years of increasing cancer death rates in the United States, we have turned the corner in this fight. Thanks to research, innovative treatment and support from our partners in government, cancer mortality has been reduced by 20 percent.

Our progress is so remarkable that cancer patients from around the globe leave their home countries to seek care here because of our superior survival rates.

Medicare has played a huge part in this process, and in our ability to help patients conquer cancer. Part B coverage under Medicare, which pays for physician-administered drugs and biologics, has allowed physicians to provide outpatient, community-based cancer care that is convenient, comprehensive, state-of-the-art and close to home. Until recently, more than 80 percent of U.S. cancer patients received treatment in the community setting.

Unfortunately, recent policies have begun to negatively affect the financial viability of this delivery system that has worked so well for so many. An already spartan reimbursement policy, coupled with the sequester, which reduced the amount that physicians are reimbursed for medications by 2 percent, has created an enormous burden on community providers who now lose money on each therapy they provide to Medicare beneficiaries.

Making the situation even more unstable, disparities in the current payment formula result in higher reimbursements for identical treatments provided in hospitals versus the community outpatient settings. This uneven playing field creates perverse incentives for hospitals to absorb struggling community practices whose services are then billed to Centers for Medicare and Medicaid Services at their higher rate. Costco is absorbed by Neiman Marcus but keeps Neiman Marcus prices.

The numbers tell the story: 2013 data from the Moran Co. showed that from 2005 to 2011 there was a 150 percent increase in administered chemotherapy in the hospital outpatient setting for Medicare Fee-for-Service beneficiaries when compared with administration in physician community cancer clinics. That shift meant Medicare payments for chemotherapy administered in hospital outpatient settings more than tripled since 2005 (to $300 million from $90 million) while payments to physician community cancer clinics actually decreased by 14.5 percent.

The result has been fewer community practices able to continue treating patients ó 288 oncology office locations have closed, 131 practices merged or were acquired by a corporate entity other than a hospital, 43 community oncology practices have started referring all of their patients elsewhere for treatment, and 469 oncology groups have entered into an employment or professional services agreement with a hospital.

So what does it matter that community cancer centers close if patients are still able to receive care elsewhere? It matters to patients, who are forced to sometimes travel farther for care, incur greater costs and shoulder inconvenient hassles on top of their life-altering illness.

It also matters to Medicareís bottom line. Recent studies show hospital-based cancer care costs Medicare $6,500 more and seniors $650 more annually. This shift away from community-based care makes little sense, particularly when youíre looking at the bottom line.

Health care providers are never comfortable putting their work in purely economic terms, but the financial realities of the current system simply cannot be ignored. Hospital-based cancer care costs more, yet a community-based environment for the same care has become unsustainable. Cancer clinics are small businesses forced by policy to operate at a loss, which is hard to imagine accepting for any business, whether itís a hardware store or a health care provider.

The National Cancer Institute estimated that there were about 13.7 million Americans living with cancer in the U.S. last year ó more than half of those over the age of 65. With about half of all cancer spending associated with Medicare beneficiaries, and as millions of baby boomers continue to reach the age of 65, the time is now for Congress to act to ensure the future of community-based care and stop the site-of-service shift into hospital outpatient departments.

Legislation by several leaders in Congress has provided a starting point. HR 800, sponsored by Rep. Edward Whitfield, R-Ky., to make chemotherapy reimbursement more accurate, and HR 1416, sponsored by Rep. Renee Ellmers, R-N.C., to mitigate the sequesterís effects on cancer care, would address several key issues. Another important step is HR 2869, co-sponsored by Mike Rogers, R-Mich., and Doris Matsui, D-Calif., to level the playing field between community cancer centers and hospital outpatient departments.

Equalizing payments for the same service regardless of setting will help stem the tide of hospitals acquiring community oncologists. Enactment of these bills will allow patients to gain access to cancer care at sites they prefer and keep the costs of fighting cancer affordable for seniors, Medicare and taxpayers. These bills are crucial for patients, for Medicare, for the future of our nationís world-class cancer care ó and I hope policymakers will embrace them.

Barry Brooks, M.D., is chairman of the Pharmacy & Therapeutics Committee for The U.S. Oncology Network.

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