H.R. 1392 Introduced to Correct ASP Problem

House Bill to Improve Accuracy of Medicare Reimbursement Introduced: Members of Congress Seek to Stem Growing Healthcare Coverage Shortfalls, Community Oncology Alliance Advocates for Swift Passage of Bill

WASHINGTON, March 10 /PRNewswire-USNewswire/ -- Representatives Gene Green (D-TX), Ed Whitfield (R-KY), Mike Ross (D-AR), Ed Towns (D-NY), Diana DeGette (D-CO), Mike Rogers (R-MI), Betty Sutton (D-OH), Bart Gordon (D-TN), Lee Terry (R-NE) and Ralph Hall (R-TX) today introduced H.R. 1392.

This bill will amend title XVIII of the Social Security Act to ensure more appropriate payment amounts for drugs and biologicals under Part B of the Medicare Program by excluding customary prompt pay discounts extended to wholesalers from the manufacturer's Average Sales Price (ASP). These discounts artificially reduce Medicare Part B drug reimbursement rates for community oncology clinics, jeopardizing the viability of these providers. The bill is a step forward in addressing problems with Medicare reimbursement for cancer drugs.

"This bipartisan bill is imperative for millions of Americans across the nation to have access to treatment at community oncology clinics and to the life-saving medications they need," said U.S. Rep. Gene Green (D-TX).

Excluding distributor prompt pay discounts from the ASP methodology is consistent with existing policy and will create greater uniformity among federal healthcare programs, as these terms already are excluded from the Medicaid Average Manufacturer Price (AMP) methodology.

The U.S. has the best cancer care delivery system in the world, in which 84 percent of Americans receive quality, compassionate care in community cancer clinics. However, the cancer care delivery system is now in first-stage crisis because Medicare has substantially cut payment for cancer drugs and essential services.

Community cancer clinics have had to close satellite facilities and cut staff. Smaller clinics are struggling to operate and more will close. Patients with insufficient or no insurance, especially seniors covered by Medicare, are increasingly being sent elsewhere for treatment and some patients are actually foregoing treatment. The crisis will deepen as demand for cancer care is now starting to exceed the supply of oncologists during the next 11 years, when we will be short an oncologist for every 1 in 3 cancer patients.

"This is a national problem that is affecting the delivery of cancer care treatment to our most vulnerable patients," said U.S. Representative Ed Whitfield (R-KY). "It is critical that we address this issue because these cuts to the Medicare reimbursements are having an adverse impact to physicians, related practitioners and their patients in all our communities."

"This bipartisan bill will help people with cancer receive treatment in their communities. It's important that we act now to help people who need these life-saving medications," said U.S. Representative Diana DeGette (D-CO), Vice Chair of the Committee on Energy and Commerce, which has jurisdiction over health care policy.

The problem not only centers on payments for cancer drugs, but also on essential services provided to cancer patients, such as treatment planning, which are not reimbursed by Medicare.

"On behalf of community oncology clinics, I thank Congressmen Green and Whitfield and their colleagues for their leadership. The introduction of this bill is a welcome and needed first step in supporting community cancer clinics," said Patrick Cobb, M.D., president of the Community Oncology Alliance (COA) and managing partner of Hematology-Oncology Centers of the Northern Rockies in Billings, Montana. "However, more has to be done because clinics provide cancer care to their patients that is not reimbursed by Medicare."

Healthcare Reform is Here!

Healthcare reform has already started. How fast it will move and how substantial the changes will be are questions that cannot be answered at this time. In part, the speed and magnitude will depend on the state of the economy. However, and it is worth repeating again, healthcare reform is underway.

The passage of the economic stimulus bill started the healthcare reform movement in earnest with 16% of a “stimulus” bill dedicated to healthcare. Perhaps most significantly was the $1.1 billion set aside to initiate comparative effectiveness research. The Senate version of the stimulus bill clarified the intent of this by referring to this as clinical comparative effectiveness research but the clinical reference was stripped out of the final bill signed into law. So, that is a pretty good indicator that cost effectiveness will be a part of the comparative equation. Additionally, the $17 billion allocated for incentive payments for physicians and hospitals to adopt health information technology is equally significant. The resolve to introduce health IT is such that medical providers not participating by 2015 will have to pay by being penalized by Medicare.

The next step is now the President’s budget, which was submitted late last week. There are several articles posted on the Community Oncology Alliance (COA) website detailing the healthcare portion of the budget. In summary, the budget proposes writing a $634 billion check as a down payment towards meaningful healthcare reform that will “bring down costs and expand coverage.” The $634 billion will be deposited in a healthcare reserve fund that will be financed half by new tax revenue and half by cuts to insurers, providers, and pharmaceutical companies. Of note are the following cuts:

• Eliminating the Medicare Advantage subsidy to insurers — $177 billion

• Changing payments to hospitals relating to readmissions, care coordination, and quality delivery — $38 billion

• Changing payments to home health agencies — $37 billion

• Expediting the approval of “biosimilars” (biotechnology drugs deemed to be biologically similar) — $9 billion

What the press generally did not report was the creation of “radiology benefit managers,” presumably to curb imaging utilization as was recommended to the Centers for Medicare & Medicaid Services (CMS) by the Government Accountability Office (GAO) in a June 2008 report to the Congress. Additionally, the budget includes a line item that proposes to motivate physicians to form “voluntary groups” to coordinate care.

The budget assumes that Congress will fix the broken physician fee schedule, which is scheduled to cut physician payments by 21% in 2010. However, the devil is in the details of exactly how Congress will address this problem.

Community oncology practices are now realizing increased payments for Evaluation and Management (E&M) services, which directly correlate to decreased drug administration service payments. That is why community oncology has to fight its own battles! 



On Thursday of this week there will be a summit at the White House dedicated to healthcare reform. It will be interesting to hear what comes out of this gathering of the President, his Administration, Members of Congress, and others. 



Yesterday, President Obama nominated Kansas Governor Kathleen Sebelius to serve as Secretary of Health and Human Services (HHS). President Obama also announced that he was nominating Nancy-Ann DeParle, Commissioner of the Department of Human Services in Tennessee, as the Director of the White House Office for Health Reform. These announcements are likely to speed up the pace of healthcare reform.