Sequester Forcing Chemo Treatments into Hospital Settings, Costing Taxpayers More in the End

"It's quite an amazing paradox." Dr. Cliff Hudis, President, American Society of Clinical Oncology

Local physicians and community-based clinics can't absorb the 2 percent cut to Medicare reimbursements for expensive cancer drugs imposed by the sequester. Their margins are so slim that the cuts would put them out of business. So patients are sent to hospitals for chemo, where Medicare reimbursement rates are higher -- a change that means the sequester is costing taxpayers more, not less.

PLAINSBORO, N.J. – For all the complaints about the federal sequester, at least it’s saving the American taxpayer money, right? Not so when certain Medicare patients need chemotherapy.

What’s worse, those patients are sent to less convenient settings – typically hospitals away from their local cancer treatment center – for care that ends up costing Medicare more in the end, several experts told Evidence-Based Oncology in the just-published August issue.

“It’s quite an amazing paradox,” Dr. Cliff Hudis, president of the American Society of Clinical Oncology, told EBO, an indexed news publication that is a supplement to The American Journal of Managed Care.

No one knows for certain how much the problem is costing taxpayers, but the amount is growing the longer the sequester lasts without a solution to this particular quandary.

Hudis and others tell EBO the sequester’s 2 percent cut to Medicare reimbursements has extended to local physicians and cancer centers, who cannot absorb that loss on expensive chemotherapy drugs. So these local providers are forced to refer patients to less convenient hospital settings, where it costs Medicare more money to provide chemotherapy.

Add the cost of this phenomenon up, patient by patient, and the tally is expected to be large. EBO reports an estimate by Milliman, the actuarial consultant, that chemotherapy in a hospital costs $6,500 more per year than in a community setting.

U.S. Rep. Renee Ellmers, R-N.C., has received bipartisan support for legislation that would exempt chemotherapy from the 2 percent cut. “What’s needed is momentum and public awareness,” she told EBO.

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