Congress, CMS Propose Revisions to Medicare Reimbursement for Chemotherapy Drugs and Services

Both the Congress and Centers for Medicare and Medicaid Services (CMS) continue to work on ways to revise the current Medicare reimbursement system for chemotherapy drugs and services. Currently, Medicare bases reimbursement for drugs on 95 percent of the Average Wholesale Price (AWP). The government has been trying to change the reimbursement formula for many years because of concern that the published “wholesale price” exceeds the actual amount paid for drugs by physicians and hospitals. CMS has stated it would like to revise Medicare drug payment by the beginning of 2004 if Congress fails to act on the issue this year.

Medicare Prescription Drug Act – The Medicare Prescription Drug Act, which includes provisions to change the AWP payment system for physicians and hospital outpatient departments, is pending in the Congress. The legislation is not yet firm and is still evolving. On September 24, House and Senate Republican leaders said they had set an October 17 deadline for Medicare conferees to finish work on the legislation, launching an intensive effort to reach agreement on the most controversial issues relating to the structure and financing of a new prescription drug benefit in Medicare. It is not clear if the conferees will be able to meet this deadline or even if they can reach agreement on several aspects of the legislation.

CMS Proposed Rule – CMS has issued a notice of proposed rulemaking proposing four alternatives to the current AWP reimbursement formula. Comments are due by October 14, 2003.

ASH Response – ASH wants to see that any reductions in payment for drugs be minimized and that there be substantial increase in payment for chemotherapy administration services and other cancer patient management care. This has been the thrust of ASH’s lobbying efforts.

Led by the ASH Committee on Practice Subcommittee on Reimbursement, ASH is preparing extensive comments to CMS. Unfortunately CMS has not provided sufficient detail to allow us to fully understand the impact of each proposed option on hematology/oncology practices. Therefore, ASH will comment on concerns we have regarding the various elements presented. The Society will urge CMS to work with the various stakeholders to formulate a system that makes sense and that can succeed. It will be very important for CMS to hear from individual hematologists/oncologists, in addition to the letter that will be filed by ASH.

Please continue to check this site for updated reports on this important issue, copies of the ASH response letter and a sample letter for individual members to use in formulating their comments to CMS.