Medicare Drug Reimbursement Cuts Are Backdoor Rationing
Imagine being denied treatment for cancer because Washington bureaucrats decided that a cutting-edge new therapy that could cure you just wasn’t “cost effective.”
That’s already happening in Britain under its government-run health care system, the National Health Service. And Medicare officials are poised to bring similar policies here.
The NHS’s “Cancer Drugs Fund” restricts physicians’ ability to prescribe half of all oncology medicines. If a medicine doesn’t extend the average cancer patient’s life span by a set length of time, which varies according to the medicine’s price, doctors can’t prescribe it for general use — even if they think would be the most effective treatment option.
In February, the NHS announced it would review existing general-use drugs in an effort to tighten prescribing restrictions. After the new review, the number of off-limits drugs is sure to rise. Patient groups predict the move will deny treatment to 22,000 cancer sufferers and “set cancer treatment back by a generation.”
A new proposal from the Center for Medicare & Medicaid Innovation, an arm of the federal agency that runs Medicare, could similarly tie American doctors’ hands. CMMI plans to slash physician reimbursements for medications administered in a doctor’s office or clinic under Medicare Part B. Doctors buy these medications upfront and receive reimbursement from Medicare.
The proposed reimbursement scheme, which CMMI innocently bills as a cost-control experiment, will prevent many doctors from breaking even on the most advanced, most expensive treatments. Essentially, CMMI will cut Medicare spending by forcing doctors to resort to cheaper drugs and second-tier treatments — or run the risk of having to close their practices.
Manipulating reimbursements to discourage physicians from prescribing certain medicines is a backdoor way to ration care. At least the British are straightforward about banning certain costly prescriptions.
Currently, Medicare reimburses physicians for chemotherapy and certain other medications at the drug’s average sales price (ASP) plus 6%. That add-on accounts for the fact that some doctors pay more than the average price. It also covers expenses associated with handling, storing and administering the drugs.
Often, that 6% makes the difference between a viable medical practice and one drowning in red ink.
Under CMMI’s proposed formula, Medicare would reduce reimbursements to ASP plus 2.5%, along with a flat fee of $16.80 per day. The formula makes generic drugs more economical to administer compared to pricier, cutting-edge treatments.
Most doctors already don’t receive ASP plus 6 percent., “sequestration” budget cuts effectively lowered reimbursements to ASP plus 4.3%.
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