Thousands of cancer patients are now being turned away for treatment by clinics throughout the nation thanks to sequester budget cuts which took affect April 1st making it impossible for oncologists to provide costly chemotherapy drugs and afford to run their businesses. As a result, patients are being forced to go to hospitals which provide more expensive care,* and may not be able to handle the additional demand.
“If we treated the patients receiving the most expensive drugs, we’d be out of business within a year, if not sooner, “ stated Jeff Vacirca, chief of Long Island’s North Shore Hematology Oncology Associates, which operates four clinics located in Brightwaters, Setauket, Patchogue and Smithtown. “The drugs we are going to lose money on, we are not going to administer right now.”
Similarly, Connecticut clinic Medical Oncology and Blood Disorders reportedly sent out letters to its patients last month warning them that if the sequester went into affect, they would not be able to treat their Medicare patients as of now.
While legislators intended to protect (in part) Medicare from the sequester, limiting the program to a 2% reduction (a fraction of the cuts imposed on other federal programs), oncologists contend that the cut is “damaging for cancer patients because of the way treatments are covered.”
For example, medications for seniors are usually covered under the optional Medicare Part D, which includes large private insurers that are able to absorb the cuts. However, because cancer drugs must be administered by a physician, they are among the handful of medications paid for by Part B, which covers doctor’s visits.
Oncologists in community clinics are generally paid by the fed for the average sales price of chemotherapy drugs, plus 6% to cover the cost of storing and administering them. However, since the doctors are not able to change the price of the drugs, they argue that the 2% cut will have to be taken from their overhead allowance.
*For example, the Washington Post reported that a study conducted by actuary firm Millman found that chemotherapy administered in a hospital setting “costs the federal government an average of $6.500 more annually compared with a community clinic, and out-of-pocket costs to Medicare patients are $650 higher.”
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