Among Cancer Doctors, a Medicare Revolt

By Gardiner Harris, the New York Times

March 11, 2004  

Years ago, doctors hospitalized cancer patients before giving them chemotherapy, so worried were they about the retching, dehydration and weight loss that the drugs could cause. Now, most doctors treat cancer patients in their offices, allowing them to return home quickly or even go to work.  

But the federal Medicare program is changing the way it pays cancer doctors, and some oncologists are so angry that, hoping to turn patients into lobbyists, they are warning patients that they face a return to hospitalization and nausea.

In Hartford , doctors in a practice called Oncology Associates wrote a letter recently to their patients saying that because of the new reimbursement system, patients might have to "switch to older medications."  

And though those drugs "may be more toxic or less convenient for you," the letter said, "we will be financially unable to give chemotherapy medications which cost us more than the reimbursement." To get proper care, patients might "have to be hospitalized," it added, though "this approach will likely not be usable due to the large number of patients and limited facilities."  

The doctors acknowledge that it would not be ethical to switch to more toxic therapies based on a change in reimbursement rates.

"But if Medicare makes it impossible to do what we've been doing, then I don't know what to do," said Dr. Robert Siegel of Oncology Associates.

Next year, their letter warns, they may refuse altogether to treat Medicare patients, who make up a large portion of those suffering from cancer.  

Similar letters are being delivered to patients around the country, according to oncologists, advocates for cancer patients and the American Society of Clinical Oncology, the nation's largest professional society of cancer doctors.

Medicare officials have denounced some of the letters as alarmist and untrue, saying that on balance, the changes in reimbursement this year - which lower payments for cancer drugs but raise payments for administering them - provide more money to oncologists.

"These letters seem to be scare tactics," said Leslie Norwalk, acting deputy administrator of the federal Centers for Medicare and Medicaid Services.  

Officials of the American Society of Clinical Oncology said that Medicare's payments to cancer doctors this year are about equal to those last year. "Essentially, I think it's correct to say that it's been a wash in the aggregate," said Deborah Kamin, senior director of cancer policy and clinical affairs at the society.  

Dr. Siegel said he and his partners had "thought long and hard about sending that letter."

"In the year leading up to this prescription drug bill," he said, "we had decided not to scare our patients. They are dealing with enough issues. But the truth of the matter is that we were just not listened to. There is this sense that you're just overpaid crybabies."

The doctors, he said, decided to write the letter so that patients could "become advocates for their own care." For now, Dr. Siegel said, "we have told our patients that we will continue to care for them."  

Bill Cohn, whose 70-year-old wife, Jan, is being treated for colon cancer at Dr. Siegel's clinic, said that the letter scared the two of them. They worried that Mrs. Cohn would not be able to get the drugs her doctor ordered, or that she would have to go to the hospital instead of a doctor's office nearer their home.

"Her getting cancer was a big enough blow," Mr. Cohn, 74, said. "Then it seemed like politics were working against us, too."

Doctors in many specialties complain that Medicare underpays them. The program sets prices for most aspects of care delivered by doctors and hospitals, and many say they have no choice but to accept what Medicare sends.  

Oncologists long avoided cuts forced on other specialists because the government allowed them to bill Medicare for cancer drugs in amounts that often far exceeded their actual costs. The system was widely criticized by watchdog groups; in a 2001 study, the General Accounting Office found that doctors were able to get discounts as high as 86 percent on some drugs.  

Some pharmaceutical companies even marketed drugs to doctors by emphasizing the profits to be made. TAP Pharmaceutical Products, a joint venture of Abbott Laboratories and Takeda Chemical Industries of Japan, agreed in 2001 to pay $885 million to settle federal charges that it conspired with doctors to bill the government for free samples of a cancer drug, Lupron.

Responding to insistent calls for change, Congress changed the reimbursement system late last year as part of the legislation creating a limited Medicare drug benefit. Lobbyists for oncologists, among others, opposed the changes - the lobbyists arguing that they would devastate cancer care.  

"We did not like the old system," Ms. Kamin of the American Society of Clinical Oncologists said, "even the perception that it set up inappropriate incentives we did not support. The question is: How do you change it so that you don't take resources out of the system so that you cripple the ability to deliver care?"

Some studies suggest that American oncologists overuse cancer drugs, particularly in the last months of patients' lives after the patients have failed to respond to other treatment. While oncologists say that some patients demand such care, advocates for cancer patients say that Medicare's reimbursement system encouraged overtreatment.

Musa Mayer, a breast cancer survivor and the author of several books on the subject, said, "If oncologists are making most of their money off the markup on drugs, then that favors the overuse of drugs."

This year, Medicare has lowered payments for drugs but more than doubled payments for office expenses. To come up with fair payments, Medicare officials are using surveys of practice expenses generated by Ms. Kamin's society. "We're using ASCO's own data," Ms. Norwalk, the Medicare official, said.  

While drug payments have fallen about 10 percent on average, reimbursements for administering drugs in oncology offices have doubled, Ms. Norwalk said. To ease the transition to a new system, Medicare is paying an additional 32 percent, or about $60 an hour, for office services.

"I want to pay the physician the right amount to keep the patient in the physician's office," Ms. Norwalk added, "and I'm sure that's what patients want."

Yet Dr. Peter D. Eisenberg, an oncologist in Greenbrae , Calif. , said that his 11-doctor practice laid off six people on Friday, including a full-time massage therapist and a social worker. The practice still has a human being answering every call instead of a machine; it has a full-time patient coordinator who spends hours scheduling care for each patient. Some of those services may have to be scaled back, which will inconvenience people, he said.

"We provided a Nordstrom level of care that was funded by these outrageous drug markups," Dr. Eisenberg said. "Now, reimbursements are going down to Kmart levels, and we can't provide the level of service our patients have become accustomed to."  

In Chico , Calif. , another oncologist, Dr. Jack Keech, wrote a letter to his patients in December warning that "some services that we have provided in our office in the past will no longer be available to you in our office." Dr. Keech said his letter is being used by the Association of Northern California Oncologists as a model for other cancer doctors.

The payment system will change again next year, when Medicare will base drug reimbursement on surveys of average drug sales prices. Ms. Norwalk said Medicare would soon publish the prices it expected to pay, and oncologists would have two months to comment on the figures before they became final. She marveled that some doctors were already complaining.

On average, oncologists made $310,371 in 2002, according to surveys by the Denver-based Medical Group Management Association. But Dr. Siegel of Oncology Associates said he foresaw disaster.

"I make a good living doing what I do, and I would not deny that there isn't some fat in the system that could potentially be cut," he said. "But in 2005 and 2006, they're not taking a scalpel to the system but a sledgehammer. They are going to destroy the integrity of this."

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