April 15, 2013


Cancer Patients at the Mercy of Sequester Medicare Cuts

Cancer clinics throughout the US are now refusing thousands of Medicare cancer patients in need of treatment. Doctors claim that the reduced funding for Medicare that took effect on April 1st, make it impossible to afford costly chemotherapy drugs and remain in business. The only alternative for these patients is to look for treatment from another facility, such as a hospital. However, these facilities may not have the capacity to accommodate an influx of new patients.

The sequester is a series of across-the-board budget cuts that Congress allowed to be enacted when it could not come to an agreement on a  spending plan earlier in the year. Congress meant to protect most aspects of Medicare from the automatic spending cuts brought on by the sequester, limiting the program to only a 2 percent reduction – much smaller than cuts that other programs face. However, doctors claim that the cut is surprisingly devastating for cancer patients due to the way their treatments are covered.

For seniors, medications are normally covered under the optional Medicare Part D, which includes private insurance. But since these drugs must be administered by a doctor, they fall under the umbrella of drugs paid for by Medicare Part B, which are subject to the spending cut.Under normal circumstances, the federal government covers the average sales price of a chemotherapy drug, plus an additional 6 percent to cover the costs of storing and delivering the medication. Because physicians have no control over the drug costs, they argue that the entire 2 percent cut would have to be taken out of the 6 percent overhead. That would equate to a double-digit pay cut.

Cancer patients who are turned away from oncology clinics can seek treatment at hospitals that administer chemotherapy drugs. However, the care will come at a price: A study found that chemotherapy delivered in a hospital setting incurs an average $6,500 in additional annual costs compared to care delivered in a community clinic.These additional costs can often trickle down to patients, who must pay for a certain percentage of their medical bills. The same study found that Medicare patients ended up with an additional $650 in out-of-pocket expenses when they only received care in a hospital environment.

Some cancer clinics continue to treat patients, despite financial losses incurred on 50-70% of administered chemotherapy drugs. They are counting on the federal government to step in and provide relief once the consequences of these cuts become too glaring to ignore. Still, it remains to be seen if hospitals have the capacity to handle this influx of additional patients.  The majority of Medicare patients (66 percent) receive cancer treatment in an community clinic, rather than a hospital.


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