Medicare Reimbursements for Cancer Medications To Decrease, Remain Adequate, GAO Finds

Although Medicare payments for cancer drugs will decline next year, the payments will exceed physicians' costs by 6%, on average, while reimbursements for other cancer-related services will be more than double, on average, from what they were two years ago, according to a Government Accountability Office study released Wednesday, the AP/Richmond Times-Dispatch reports.

The study examined 16 medications that are responsible for 75% of Medicare payments to oncologists. GAO examined Medicare payments to oncologists in 2003 and also analyzed projected payments for 2004 and 2005.

Researchers found that payments for cancer drugs will undergo a decline, but reimbursements for administration and other costs will significantly increase, according to the AP/Times-Dispatch. A provision in the new Medicare law changed the reimbursement rate "in an effort to address long-standing excess payments for the drugs and insufficient reimbursement for administering the medicines and other office expenses," according to the AP/Times-Dispatch.

Oncologists and patient advocates -- who have asked Congress to maintain the former payment system until various agencies complete studies on the new system in 2006 -- opposed the change, claiming it would make office-based chemotherapy treatments unaffordable and force patients to seek such medication at hospitals.

CMS Administrator Mark McClellan said the study provided further proof that the revised payments would ensure "access to high-quality ambulatory cancer care." The American Society of Clinical Oncology said the study was flawed and underreported some costs (AP/Richmond Times-Dispatch, 12/2).