Report Released on Medicare Cancer Care Demonstration

August 30, 2006 – The Department of Health and Human Services Office of Inspector General (OIG) released a report today entitled Cost and Performance of Medicare’s 2006 Chemotherapy Demonstration Project. The report finds the data from the demonstration are unreliable, due to inconsistencies and anomalies that call into question the integrity of the data. Additionally, the report finds approximately $17 million in net overpayments. Approximately 90 percent of eligible practitioners participated, with a median amount allowed per physician of approximately $23,000. The report notes the scope of the Cancer Care Demonstration was much larger than usual. The Cancer Care Demonstration was estimated at $300 million for one year, as compared to the next largest demonstration which is estimated at $60 million over eight years.
The Medicare Demonstration of Improved Quality of Care for Cancer Patients Undergoing Chemotherapy was implemented January 1, 2005. A modified form of the demonstration was implemented in 2006. Under the demonstration, Medicare allowed $130 each time a practitioner reported to Medicare an assessment of a beneficiary’s level of nausea, vomiting, pain, and fatigue while undergoing chemotherapy for cancer. The OIG report finds that Medicare and beneficiaries spent approximately $275 million on the demonstration, with beneficiaries paying approximately $55 million.

Approximately 7,500 physicians participated in the demonstration, with a median amount allowed per physician of approximately $23,000. Over 300 individual physicians allowed over $100,000. The top ten were allowed more that $270,000 each. The top biller (located in FL) was allowed $625,603, followed by $507,563 (located in KS). The highest mean per patient was $5,214 (located in CA), putting that beneficiary’s cost share at $1,043.

ASH did not support the demonstration as implemented. In November 2004, ASH sent a letter to Administrator Mark McClellan, MD, PhD, urging the agency to reconsider implementing the 20 percent beneficiary coinsurance.