Reduced Cancer Drug Reimbursements Don’t Impede Access – JAMA Study

July 8, 2008

A review of Medicare claims data from 2003 through 2006 found no evidence that lowering payments to physicians for cancer drugs has adversely affected access to care.
The review by Alisa Shea and colleagues at the Duke University School of Medicine addresses concerns that the reduction in physician reimbursement mandated by the 2003 Medicare Modernization Act - and beginning in 2004 - would lead some private oncology practices to close, requiring the 80 percent of cancer patients who receive treatment in community settings to travel farther from their homes to local hospitals.
"As measured by travel distance and time to chemotherapy, our findings do not support anecdotal reports that the enactment of the MMA has changed access to chemotherapy in a meaningful way," the authors state. The study appears in the July 9 Journal of the American Medical Association.
The study found the median wait time for treatment was about 28 days and that the wait in 2006 was not significantly different from 2003 in any treatment setting analyzed. The median travel distance was approximately eight miles, only about 1.3 miles further in 2006 than in 2003.
Under MMA, Medicare payments to physicians for chemotherapy were reduced from 95 percent of average wholesale prices in 2003 to 85 percent in 2004. In 2006, payments were further reduced to 106 percent of manufacturer-reported average sales prices.
Based on a nationally representative 5 percent sample of Medicare inpatient, outpatient and carrier claims, the study supports the conclusions of earlier studies that used some Medicare claims data, as well as patient and physician surveys, site visits and focus groups.
Studies released in 2007 by the Medicare Payment Advisory Commission and the National Payment Advocate Foundation found patients did not perceive changes in treatment following MMA enactment. However, the Duke researchers point out there has been "limited" empirical evidence on whether changes in reimbursement policy influenced the location or timeliness of chemotherapy.
The authors caution that the "slow transition to full implementation of the reimbursement changes mandated by MMA" may account for the lack of impact. In the short term, oncology practices may have been able to absorb financial losses or compensate for those losses by providing other services, the authors suggest.
They also note that CMS demonstration projects may have offset reductions in reimbursement by providing additional compensation for certain services. CMS sponsored a "quality of care" demonstration in 2006 that drew broad participation by oncologists .
-Cathy Kelly (c.kelly@elsevier.com)