Sequestration Started; Countdown to Cancer Care Cuts

Created on: Monday, March 04, 2013

Sequestration went into effect on March 1st and major cuts will be made to federal spending. That includes an across the board maximum 2% payment cut to Medicare providers, which will adversely impact community cancer clinics more than other providers. We say that because a 2% cut to services payments is bad enough; however, a cut of that magnitude to Medicare drug payments will be devastating. Medicare payment set at ASP  + 6% will be slashed to approximately ASP + 4.3%, but the underlying drug cost will remain the same. As it is, many cancer drugs are reimbursed by Medicare (at ASP + 6%) less than clinics’ costs, and further payment cuts cannot be absorbed.

Constant cuts to Medicare reimbursement have been the cause of cancer clinic closings and a general consolidation of cancer care. (See the COA 2012 Practice Impact Report by clicking here.) The result has been patient access problems, drug shortages, and higher costs for Medicare, private insurers, and patients. (Click here to reference the Milliman report and here for the Avalere report on the higher costs of hospital-based care versus that provided in community cancer clinics.)

There had even been proposals to delay sequestration by paying for it in (small) part by cutting Medicare cancer drug reimbursement to ASP + 3%. Either by sequester or paying now to stop it, any further Medicare payment cuts to cancer care will be devastating to an already unstable cancer care delivery system. It’s ironic that attempts to save federal spending on Medicare are actually having the exact opposite effect with cancer care.

Congress has now come to the aid of Medicare patients and their providers to stop the harmful sequester cut to cancer drugs. Representatives Sessions (R-TX), Green (D-TX), Burgess (R-TX), Schwartz (D-PA), Whitfield (R-KY), and KInd (D-WI) have authored a letter to HHS to stop the sequester cut to the underlying cost (ASP) of cancer drugs and other Part B drugs. Congresswoman Renee Ellmers (R-NC) has actually introduced a bill, the Cancer Patient Protection Act of 2013 (H.R. 1416), to instruct CMS to stop the cancer drug sequester cut and refund amounts collected from the sequester cut since April 1, 2013.

We need all members of Congress to help stop the seqyester cut to cancer drugs.

First, SIGN the Sessions et al letter that has been sent in a "dear colleague" letter to all House Representatives asking them to sign on.

Second, COSPONSOR Congresswoman Ellmer's bill, H.R. 1416.

It is that simple. Any Representative supporting cancer care will SIGN & COSPONSOR.

Brief Background on Sequestration    

At the 12th hour last year, Congress came up with a deal to patch the SGR for a year. With that, they also patched sequestration for two months. As we have explained before, sequestration is the result of the failure of the congressional “super committee” from finding at least $1.2 trillion in federal savings (by cutting expenses or raising taxes) over ten years. Congress has now let sequestration go into effect on March 1, 2013 and the sequester will automatically cut defense and domestic spending. That includes a 2% across-the-board Medicare spending cut. The Medicare cut cannot raise beneficiaries’ costs, so it is directed squarely at providers.

Click here to read the report from the Office of Management and Budget (OMB) on the impact of sequestration on all impacted aspects of the government.

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