Congressional Conferees Agree to Include OPPS Remedies in Final Medicare Legislation; Community Cancer Programs Greet News with Relief

9/12/2003

From: Don Jewler of the Association of Community Cancer Centers, 301-984-9496

ROCKVILLE, Md., Sept. 12 -- In a major victory for the Association of Community Cancer Centers (ACCC), its members, patients with cancer, and the nation's oncology community, House and Senate conferees charged with reconciling differences between the two Medicare prescription drug coverage bills passed in June have agreed to several provisions designed to restore Medicare reimbursement to drugs and biologics provided in the hospital outpatient setting.

Under the agreement announced September 10, 2003, payments for sole-source drugs and biologics covered by Medicare's hospital outpatient prospective payment system (OPPS) could not fall below 88 percent of average wholesale price (AWP) in 2004 and 83 percent of AWP in 2005. In 2006, reimbursement rates would be established by a different methodology yet to be determined. It may be based on a study of actual hospital costs in acquiring, handling, and storing drugs and biologics (and providing pharmacy services) intended for Medicare patients in the outpatient setting. However, it remains unclear whether conferees intend hospital payments to be tied to office-based reimbursement in some way by 2006.

"Cancer programs have found it increasingly difficult, if not impossible, to continue to provide therapies for which they are so dramatically under-reimbursed," said ACCC President Cary A. Presant, M.D. "Some programs have already closed their doors, while others have discontinued using the newest drugs without a payment code. The oncology community has taken a stand against very real threats that are jeopardizing the delivery of cancer care, and Congress has listened."

Under the agreement, multi-source drugs will be reimbursed at 68 percent of AWP and generic drugs at 46 percent of AWP. Newer drugs that do not have a Medicare payment code, or C-code, will be reimbursed at 95 percent of AWP. Additionally, orphan drugs would be reimbursed based on a reasonable cost basis for the next two years.

"This is a great win for cancer centers," said ACCC's Executive Director Lee E. Mortenson, D.P.A., "and a terrific precedent for Congress to consider when it discusses the office-based issues over the next couple of months."

Each of the provisions is now part of the final Medicare prescription drug coverage bill, but Congress must pass the legislation for the provisions to become law.

On January 1, 2003, the Centers for Medicare and Medicaid Services (CMS) implemented drastic cuts in Medicare drug reimbursement rates to outpatient cancer programs, resulting in payments of 50 to 60 percent of AWP for many expensive sole-source and multi-source drugs. The effect of these cuts has been substantial, threatening cancer centers' abilities to continue caring for their patients.

H.R. 1032 introduced by Representative Shaw and S. 1206 introduced by Senator Bond address this problem, by reversing drugs payment cuts, in order that outpatient cancer programs may continue to provide high-quality care. Higher payment rates will allow cancer centers to assure access to drugs and maintain their staffs of pharmacists, social workers, and others who work every day to ensure better care for their patients.

While stabilizing outpatient cancer program payments, the Conference Committee agreement also calls for a study of the costs related to providing pharmacy services in hospitals-so vital for ensuring safe and effective care for cancer patients.

"ACCC has worked diligently with members of Congress to draft legislative proposals to preserve patient access to cancer drugs. Our efforts and the work of the congressional conferees have helped make reimbursement more fair under the Medicare system," Presant said. "Still, reductions loom on the horizon for physician offices, and ACCC will continue to work with other oncology organizations to address this threat as well. Patients need access to their life-saving anti-cancer medications in both the hospital outpatient and physician practice settings."

Across the country, community cancer centers greeted the Conference Committee agreement with praise and relief. "This agreement restores much needed basic funding for hospital outpatient cancer care. Without it, hospital cancer programs would not be able to survive," said Teresa D. Smith, R.N., M.S.N., director for oncology, University of Wisconsin Comprehensive Cancer Center in Madison, Wisc.

Echoing these sentiments was Margaret A. Riley, M.N., R.N., CNAA, in Atlanta, Ga. "This OPPS fix allows hospital cancer program to continue to provide comprehensive cancer care, including much needed chemotherapy and supportive care drugs to patients and their families." Riley is director, Specialty Center for Cancer Care and Research, Saint Joseph's Hospital of Atlanta.

ACCC provides a national forum for addressing issues that affect community cancer center programs, such as regulatory and legislative issues, measurements of the quality of care, and clinical research. Its unique membership of more than 650 hospital cancer programs and oncology private practices includes all members of the cancer care team: medical and radiation oncologists, surgeons, cancer program administrators and medical directors, oncology nurses, oncology social workers, and cancer program data managers. The Association has proactively worked with state and federal governments on behalf of cancer patients and their families on issues of access to appropriate treatment and clinical trials.