Urologists join injectable drug reimbursement fray

July 1, 2007

For the third year in a row, legislation has been introduced in Congress to help resolve a troubling issue for many physicians who treat cancer patients: how to be fairly reimbursed for the cost of injectable drugs.

Key Points

For urologists, this issue is no small matter, as it involves reimbursement for the popular luteinizing hormone-releasing hormone agonists used in the treatment of prostate cancer. Those drugs, according to 2005 estimates from the Centers for Medicare & Medicaid Services, account for $400 million in spending by Medicare, or about 4% of the $10 billion paid by Medicare for Part B drugs. Overall, CMS estimates, a total of 5% of spending-$500 million-went to urologists.

The problem stems from the Medicare Modernization Act of 2003 (MMA), which imposed changes in the federal reimbursement system for such drugs to eliminate what government auditors estimated was a substantial spread between physicians' drug costs and the reimbursement rate.

"Numerous reports by the Office of the Inspector General and the Government Accountability Office indicated that Medicare's payment was significantly higher than physician acquisition costs for the drugs," Kuhn said.

Thus, the MMA revised the system to give physicians two choices: Obtain the drugs from a competitively selected vendor participating in the new Competitive Acquisition Program or purchase them on the market and receive a payment from Medicare that is 6% above the average sales price (ASP). In return for cutting drug price reimbursement, Medicare implemented a system to pay physicians a fee for administering those drugs.

But oncologists and other physicians who treat cancer patients, especially those in small practices, now say they cannot afford to provide the drug infusion services to their patients and, through the Community Oncology Alliance (COA), they are lobbying Congress to enact The Community Cancer Care Preservation Act (H.R. 1190), which, the organization says, would resolve some of the payment problems.

"Anybody who gives Part B infusion would benefit from this bill," said Dianne Kube, a lobbyist for the COA.

Sponsored by Reps. Jim Ramstad (R-MN) and Artur Davis (D-AL), the bill has a growing list of co-sponsors in the House of Representatives. It would address what COA describes as "shortfalls" in Medicare Part B reimbursement for cancer care by:

"The inaction to fix these problems is adversely impacting the cancer care delivery system in this country and, most importantly, cancer patients who depend on their community oncology team of physicians and nurses," COA said in a statement that reports "negative consequences" from more than 175 clinics in 37 states.

"More patients are being sent to the hospital for treatment," the statement said. "This results in disjointed care that leads to mistakes, duplication, and inferior treatment. Especially vulnerable are those 25% of the nation's Medicare cancer patients with no or inadequate secondary insurance."

COA said Medicare reimbursement for cancer care "has been severely and inappropriately cut, based on differences between congressional intent of the MMA and actual implementation."