Hurdles to Appropriate Reimbursement

Sydney Abbott, JD

October 2011, Vol 1, No 3 - Reimbursement


This has proven to be a difficult year for reimbursement for community cancer care providers. Al – though there are many hurdles to appropriate reimbursement, 3 issues are hanging fire in Congress this year. The sustainable growth rate (SGR) formula remains unfixed. Drug manufacturers’ promptpay discount is still calculated in the average sales price (ASP) for physician reimbursement. And most recently, select members of Congress are considering across-the-board cuts of up to 2% in Medicare reimbursement.

 

1 The SGR formula. This fundamentally flawed formula links reimbursement rates to increases in the gross domestic product (GDP). Because spending on physician services has grown faster than increases in GDP, the formula has called for cuts in reimbursement each year for most of the past decade. In 2012, the SGR formula calls for nearly a 30% cut to physician reimbursement. Each year, Congress has passed a “doc fix,” pushing those cuts down the road. Once again, a similar “fix” is expected by year’s end. However, these continual lastminute “fixes” make future planning and investment difficult for practices that cannot know when, or if, another short-term fix is going to happen. The Association of Community Cancer Centers (ACCC) continues to work with the Centers for Medicare & Medicaid Services (CMS) and Congress to ensure physicians do not see these significant cuts.

 

2  The prompt-pay discount included in the calculation of ASP. ACCC is fighting to remove these customary prompt-pay discounts, which are extended by manufacturers to distributors, from the manufacturers’ calculation of the ASP for Part B drugs and biologicals. These discounts typically are not passed on to the physician purchasing the product. ACCC supports S.733 and HR.905, 2 pieces of companion legislation that would remove the prompt-pay discount from the ASP calculation, aligning Medicare reimbursement methodology with Medicaid methodology. Medicaid methodology excludes these discounts from the calculation of average manufacturers price (AMP), ensuring fair and accurate reimbursement for physicians and clinics. Thanks in part to the hard work of ACCC members, the bills are gaining bipartisan support in both the House and Senate.

 

Congress considering cuts in Medicare reimbursement. Most urgently, Congress recently finalized the members of the bicameral, bipartisan debt reduction “super” committee, which was created by the debtceiling compromise signed into law by President Obama in August. This joint committee has until Thanksgiving to find at least $1.5 trillion in deficit savings over 10 years for an up-or-down vote in both chambers by Christmas 2011.

This is of concern to all cancer care providers because Medicare reimbursement is looking at significant cuts. President Obama has been very clear that when he envisions cuts to Medicare, he does not see changes in coverage for beneficiaries, he sees provider-side cuts. It appears that the committee is looking at provider-side cuts as well—somewhere in the range of a 2% reduction. And these cuts will be in addition to projected cuts of almost 30% resulting from the SGR formula.

Although these hurdles are significant, ACCC will continue to work until they are overcome. For example, ACCC has worked with congressional offices, held Hill Day events for its members, sponsored congressional briefings on issues affecting its membership, and submitted comments to CMS on the recent Hospital Outpatient Prospective Payment System and Medicare Physician Fee Schedule 2012 proposed rules.

ACCC will address these issues in greater detail at ACCC’s 28th National Oncology Conference in Seattle, October 19-22, 2011. For more information visit: www.accccancer.org/meetings/meetingsNO C2011.asp.