Independent community oncologists play a vital role in cancer treatment for hundreds of thousands of Americans. In fact, nearly 55% of patients with cancer in the United States receive treatment in the community setting.1
Community practices provide patients with access to local, good-quality treatment that allows them to stay close to family, friends, and other forms of support. Also, it is widely acknowledged that community oncology is the lowest-cost setting for care, especially when it comes to travel expenses and other common barriers to care. With questions regarding Medicare Part B and the recent update to the tax code up in the air, 2018 is turning out to be a year of uncertainty for community providers. Now is a critical time for oncologists to engage with these issues by advocating for themselves and their peers while also becoming more efficient, transparent, and accountable in order to realize greater opportunities in the future.
Like all other industries, healthcare does not exist in a bubble. Outside forces from a variety of stakeholders affect providers of all kinds. Regulatory pressures and shifting laws and guidelines can pose a threat to the viability of community practices, because many regulations limit payment for treatments and services. Community oncologists operate on razor-thin margins, which makes the slightest policy or regulatory change potentially catastrophic to their bottom line and overall viability. This is especially true when it comes to Medicare Part B. Any additional regulation that lowers payment under Part B could render it impossible for community oncologists to continue to operate effectively and efficiently.
Over the past several years, independent oncology practices across the country have built innovative and sound infrastructures to deliver increasingly complex chemotherapy regimens. From establishing infusion centers to in-office dispensing of oral oncolytics, community practices are now commonly responsible for managing and maintaining inventory of specialty products to treat their patients. To sustain this level of treatment, practices buy product at risk, with the understanding and hope that they’ll be properly paid at the average sales price (ASP) plus 6% down the line. However, regulators continue to limit payment.
Under the Budget Control Act of 2011, automatic sequester cuts, including a 2% per year reduction in Medicare spending, were established to keep federal spending in balance with rising national debt. This lowered payment for a drug to ASP plus 4%, cutting community oncologists’ operational income by nearly 30%. Any further regulation limiting Part B payment would make the infusion and dispensing systems community practices have built untenable. There’s already significant pressure for oncologists to be more aggressive about collecting payments from Medicare, other payers, and patients, and this additional change could push community oncologists to a place where they are no longer able to maintain in-office inventories of chemotherapy treatments.
On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act of 2017 into law. This reduced taxes for individuals and businesses and repealed the individual mandate included in the Affordable Care Act. Additional Medicare sequester cuts are expected, because the policy is projected to add $1.5 trillion to the federal deficit over the next 10 years. In addition, the recent tax bill included the Pay-As-You-Go Act mandate: Legislation must pay for itself or across-the-board spending will be cut. These cuts would hit community oncology practices hard, challenging the viability of their operations and reducing their ability to support patients who turn to them for convenient, affordable, and specialized care.
In the face of these impending regulatory and legislative complexities, the onus falls on community oncologists to advocate for themselves and their patients, be leaders in value-based care, and be more transparent and accountable. Since the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, oncologists have become more politically active, but there is still a long way to go. Many regulators do not understand the benefits of community oncology or how Medicare Part B changes affect these practices. By defining their value to legislators, community oncologists would gain support and be less vulnerable to lobbies whose interests are on the other side of the table.