Medicare Payments for Cancer Drugs to Drop

Medicare payments for cancer drugs will decline next year but will still exceed what doctors pay for them, congressional investigators said Wednesday.

Cancer doctors and some patient advocates have said the Bush administration's planned cuts would imperil office-based chemotherapy treatments and force patients to travel to hospitals for their medicines.

But Medicare (search) payments for the drugs will exceed doctors' costs by 6 percent on average, while reimbursements for other services will be more than double, on average, what they were two years ago, the congressional Government Accountability Office (search) said.

The GAO study was based on 16 drugs that account for 75 percent of Medicare payments to cancer doctors.

The changed reimbursement, part of last year's Medicare prescription drug law, is an effort to address long-standing excess payments for the drugs and insufficient reimbursement for administering the medicines and other office expenses.

Medicare won't pay for most prescription medicines until 2006, but it covers the cost of intravenous chemotherapy and other treatments that must be dispensed by medical professionals.

GAO examined payments to cancer doctors in 2003, as well as projections for 2004 and 2005. It found a steep decline in payments for the medicines, but a significant increase in the reimbursement for administering them and other expenses.

Medicare chief Mark McClellan said the report confirmed administration assertions that payments would ensure "access to high-quality ambulatory cancer care."

Sen. Charles Grassley (search), R-Iowa, who requested the GAO study, said, "This report is good news for cancer patients and highlights the adequacy of payments to oncologists, both in drug payments and drug administration services."

The American Society of Clinical Oncology (search), which has opposed the changes, responded that the study was flawed and underreported some physician costs, GAO said.

Cancer specialists and patient advocates have asked Congress to essentially freeze payments at current levels until various agencies complete studies of the new pricing system, expected in 2006.