Cuts yet to disrupt cancer care in valley

While some cancer clinics across the country have begun turning away thousands of Medicare patients –– an action clinic administrators blame on sequester budget cuts –– that disruption in care is not under way in Las Vegas.

Not yet anyway.

How long local oncologists continue to administer expensive chemotherapy drugs while receiving about 28 percent less reimbursement per patient for storing and dispensing the medication depends largely on how clinics “tighten their belts,” according to Dr. James Sanchez, practice president for Comprehensive Cancer Centers of Nevada, which treats about 60 percent of the cancer patients in the Las Vegas Valley.

In New York, Connecticut and North Carolina, clinics recently began notifying patients that if the sequester cuts went into effect April 1, as planned, they would have to find their cancer care elsewhere, most likely at hospitals.

Nonprofit hospitals should have an easier time with sequester cuts, given that a federal program known as 340B requires pharmaceutical companies to give double-digit discounts to hospitals that treat low-income and uninsured patients.

“We haven’t seen any new patients coming from clinics,” said Brian Brannman, CEO at the nonprofit University Medical Center.

Congress had tried to largely shield Medicare from the sequester, limiting the program to about a 2 percent reduction –– a far smaller cut than other federal programs received. Yet oncologists say what seems to be a small cut becomes damaging for cancer patients because of the way chemotherapy treatments are covered.

While medications for seniors usually are covered under the optional Medicare Part D, where private insurers absorb the cuts, chemotherapy, which must be administered by a physician, is paid for by Part B, which covers doctor visits.

In that situation, the federal government pays oncologists in clinics for the average sales price of a drug, plus
6 percent to cover the cost of storing and administering it.

Under the sequester hit, the 6 percent for administration drops to 4.3 percent, which translates to about a 28 percent cut.

If a doctor were to receive $100 as the average sales price of a drug –– many cancer drugs cost hundreds of thousands of dollars –– and the 6 percent add-on for administration, he would receive a total of $106. With a 4.3 percent add-on for administration, the oncologist receives $104.30.

The cut may not seem like much, doctors say, but out of the normal 6 percent reimbursement comes the money for supplies that range from tubing to needles and other ancillary equipment.

Dr. John Ellerton, a longtime valley cancer doctor now practicing with 21st Century Oncology, said that doctors can do nothing about the government specified average price of a drug.

“Believe me,” Ellerton said, “doctors aren’t getting rich administering expensive cancer drugs. There isn’t a lot of wiggle room. The pharmaceutical firms are making the money.”

Still, Ellerton believes that most clinics –– bigger ones can absorb the cut more easily, he said –– should be able to continue seeing patients.

Sanchez said several oncology groups have written letters to legislators about the problem.

“I have been talking to some legislators myself here in Texas,” said Sanchez during a long-distance phone call from Houston. “I think they’re beginning to understand that an unintended problem has been created.”