Politics & Policy: April 2007

By Prachi Patel-Predd and John D. Zoidis, MD
Published: Friday, Aug 13, 2010


Bill To Solve Reimbursement Problems Introduced to House of Representatives

New legislation that addresses solutions to problems with Medicare reimbursement for cancer care has been introduced in the House of Representatives. The legislation—known as the Community Cancer Care Preservation Act of 2007 (HR 1190)—is

being cosponsored by Representatives Artur Davis (D-AL) and Jim Ramstad (R-MN).

Representatives Davis and Ramstad, who both sit on the House Ways and Means Committee, have heard first-hand from practices about the problems with Medicare reimbursement for community cancer care. These members have visited community cancer clinics in their districts, have met with the leadership of the Community Oncology Alliance (COA), and have been very involved in understanding the issues. Mr. Ramstad sponsored legislation addressing this issue in the prior session of Congress.

HR 1190 seeks to address the key problems with drug and services reimbursement, including:

• Elimination of “prompt payment” discounts

  from the calculation of average

  sales price (ASP) so that ASP is not artifcially

  lowered by finance discounts between

  manufacturers and wholesalers.

• Removal of the 6-month lag in ASP so

  that community cancer clinics are not

  unfairly subsidizing the Medicare system

  for manufacturer price increases.

  There were more than 100 price increases

  in 2006.

• Creation of payment codes for essential

  components of quality cancer care that

  Medicare does not currently reimburse;

  specifically, treatment planning and

  pharmacy facilities.

• Restoration of appropriate payment for

  the first hour and subsequent hours of

  cancer drug administration.

The use of ASP to determine reimbursement is not without controversy, however. According to the National Association of Chain Drug Stores, using ASP to determine pharmaceutical reimbursement under Medicare Part B, rather than Average Wholesale

Price (AWP), will have a significant negative impact on pharmacies. This negative result will be further magnified and  multiplied if other public and private prescription drug programs such as a Medicare outpatient drug benefit, Medicaid, private pharmacy benefit managers (PBMs), insurance companies, the Department of Defense’s Tricare program, and the Federal Employees Health Benefit Program (FEHBP), use ASP rather than their current reimbursement system.

The COA has worked with Representatives Davis and Ramstad and has expressed appreciation for their support for community

cancer care. More details on the bill are expected in the near future.

                                                                                                                                                                                             – John D. Zoidis, MD

NCI Budget Cuts Affecting Cancer Research

The recent congressional decision on the 2007 budget for the National Cancer Institute (NCI) keeps the budget essentially the same as last year, which means a flat funding for more than two years in a row that is leading to cuts in key cancer research across the country.

In February, Congress approved a continuing resolution that finalized the NCI’s budget at $4.79 billion. This is an increase of $46 million over the 2006 budget, which members of the cancer research community say is an insignificant increase. This is “essentially a cut because in a situation where you have a flat fund over a period of two to three years, inflation begins to take over and so effectively your spending power is less,” Deborah Kamin, senior director for cancer policy and clinical affairs at the American Society of Clinical Oncology (ASCO) told Oncology & Biotechnology News. “What the cancer research community has done in response is begin to pull back and tighten their belts to live within the budget constraint.”

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