Cancer Drug “Quality Care” Demo Cushioning Reimbursement Change – ASCO

The Centers for Medicare & Medicaid Services' "quality care" demonstration project has taken pressure off oncologists facing lower reimbursement for Part B drugs, American Society of Clinical Oncology President David Johnson said Feb. 15.

The onset of drug reimbursement based on average sales price plus 6% "has been softened somewhat by the quality care demo," Johnson declared during a briefing in Washington, D.C.

The ASCO president stressed that "it's still early, so the impact is hard to know," and he stated that some practices, regardless of their size, report experiencing difficulty purchasing drugs.

Johnson's relatively positive assessment confirms initial reports from industry that the Part B market remains intact thanks in large part to the CMS demo (¹ (Also see "CMS Offers “Quickest Fix” To “Authorized” Generics, CEO Coury Says" - Pink Sheet, 3 Feb, 2005.), p. 13).

Under the Medicare Modernization Act, the basis for reimbursement to providers for administering Part B-covered drugs switched to ASP from average wholesale price on Jan. 1, 2005.

The change was opposed by oncologists, who argued that corresponding increases in practice payments would not offset the reduction in drug reimbursement.

CMS estimated in the 2005 Physician Fee Schedule that paying doctors 106% of ASP would reduce their Medicare drug revenues by 13% overall; the decrease in oncology payments in 2005 was projected to total $800 mil. (² (Also see "Medicare Part B Demo, Coding Changes Will Stabilize Oncology Rx Market" - Pink Sheet, 8 Nov, 2004.), p. 18).

The quality care demo, however, restores a substantial portion of that payment cut; CMS earmarked $300 mil. for the program in 2005.

Any physician prescribing drugs under Part B is eligible to receive payments of $130 per patient for reporting patients' assessments of pain, nausea, fatigue and vomiting correlated with chemotherapy.

In contrast to the assessment of the quality care demo, the briefing offered a less sanguine appraisal of the oral replacement drug demo, in which oral oncology drugs are available through Part B (³ (Also see "CMS Will Recruit Oral Rx Demo Project Enrollees Through Pharmacies" - Pink Sheet, 13 Sep, 2004.), p. 19).

National Coalition for Cancer Survivorship President Ellen Stovall called the demo a disappointment, stating that many beneficiaries have instead opted to remain with patient assistance plans.