The proposed tax reform bill could have a devastating impact on cancer care, cautions the Community Oncology Alliance (COA).
The House Republican tax bill would trigger $136 billion in cuts from mandatory spending in 2018, including $25 billion from Medicare spending, if Congress is unable to figure out a way to offset its deficit increases.
A $25 billion cut to Medicare would drive many community oncology practices into bankruptcy, according to the COA. Nearly 8 million cancer patients received treatment at community oncology centers. If many of them close, the remaining providers would be unable to absorb that number of patients, so many cancer patients would lose all access to care, the organization warns.
"It's very clear what effect this may have, if we look at what the current sequester had done," said Ted Okon, executive director of the COA. "It is a slow lead that has caused community oncology practices to close treatment facilities as well as sell out to hospitals."
The current 2% sequester cut decreased payment for cancer drugs and other critical specialty therapies. "But now there is talk of doubling that to 4%," Okon told Medscape Medical News.
The Congressional Budget Office has warned that under the Statutory Pay-As-You-Go Act of 2010 (PAYGO), the 4% sequester cut to Medicare is required to offset the deficit increases triggered by the current tax bill, as reported by Medscape Medical News. Although the PAYGO sequestration doesn't reduce Medicare benefits to recipients, it does reduce payments to providers. A 4% reduction in payments would translate into a $25 billion cut.
But it could even be worse than that. "It is unclear, as there are different interpretations of this, if this is a 4% cut on top of the 2% or just 4%," said Okon. "So is it going to be a cumulative 6% cut or a 4% cut? Either way, this budget gimmick will be devastating."
Increased Medicare cuts will further reduce access to cancer care, particularly in rural communities, limit provider choice, and have the unintended consequence of increasing the federal deficit.
"If a 2% cut now has caused close to 100 treatment facilities to close and over 130 practices made up of multiple clinics to sell out to the hospitals, we are going to have a situation that is going to accelerate," he emphasized.
As cancer care is increasingly being pushed out of the community and into hospital settings, the cost of care escalates without any improvement in outcomes. A recent study showed that it cost almost 60% more ― $90,144 per year ― for a patient to receive chemotherapy in a hospital, and patients who received treatment in the hospital setting were more likely to visit the emergency department after treatment.
The COA points to a report from the actuarial firm Milliman that found that the consolidation of independent community cancer practices with hospitals cost Medicare and taxpayers $2 billion in 2014. Medicare beneficiaries were also affected by these consolidations ― the 20% copayment resulted in a $500 million increase in costs.
Already Squeezed
The community oncology sector has already been squeezed. The COA pointed out in its 2016 report that since 2008, community cancer clinic closings increased by 121%, and consolidation into hospitals increased by 172%.
During this period, 380 cancer clinics shut their doors, and 609 community cancer practices were acquired by hospitals or became affiliated with them.
In addition, almost 400 practices report that they are struggling to keep their head above water because of financial distress.
"There is also talk about extending the sequester to the end of the 10-year budget window to pay for the end-of-the-year package," said Okon. "It is very disconcerting to have this sequester, which is basically a blunt axe that hangs over Medicare. And this all stems from an unrelated issue like a tax bill."
"This isn't Chicken Little saying the sky is falling," he added. "If you look at the result of what has already happened and then double or triple the sequester ― it's going to devastate community oncology care."
The tax reform bill has been passed by the House of Representatives, but whetehr the bill passes ultimately depends on how well it will align with the Senate's version of the plan.
Medscape Medical News © 2017
Cite this: Tax Reform Bill Will Bankrupt Community Oncology Centers - Medscape - Nov 17, 2017.
Comments