With Congress working hard to reduce the federal deficit, funding for essential state services is no longer secure. For Washington seniors who depend on Medicare, the consequences of cost-cutting measures could prove deadly.
At particular risk are those seniors who require specialty drugs covered under Medicare Part B – such as chemotherapy or treatments for multiple sclerosis – that must be administered by a physician.
Under Part B, doctors are reimbursed for in-office treatments at the average sales price of the medication plus an additional 6 percent to cover overhead costs and the additional expenses associated with the drugs.
The recent sequestration cuts have already essentially reduced that add-on to just 4 percent. And now, still facing fiscal challenges, Congress may consider lowering reimbursement rates even further. We can’t allow our leaders to balance the budget on the backs of our most vulnerable citizens.
Even before these cuts, physicians were coping with narrow operating margins when treating Part B patients. A 2007 study by the Medicare Payment Advisory Commission stated that these margins were “slim,” and noted that doctors could not purchase certain drugs for less than the average sales price plus 6 percent reimbursement amount.
Additional cuts to Part B drug reimbursements will make treating Medicare beneficiaries even less financially viable. To stay in business, many doctors will be forced to limit the number of Medicare patients they take. Some will opt out of the program altogether. Clinics may have to close their doors – especially those in rural and underserved communities. Patients will have fewer care options, potentially leading to longer waiting times before they’re treated or difficulty finding treatment options near their homes.
In small communities, the local doctor is often the only resource available for medical care. Yet the supply of doctors in our state is already well below the national average. The problem is most acute in rural Eastern Washington.
More Part B cuts will compound the crisis and further jeopardize access to care. According to the Washington State Hospital Association, the sequester’s cuts to Medicare may ultimately cost Washington some 16,000 health care jobs by 2021. It’s not just workers in the industry who will be losing out, however. It’s the patients they won’t be caring for.
Community cancer clinics are already feeling the pinch. A study by the Community Oncology Alliance (COA) has found that in the past six years, around 290 oncology clinics have closed nationwide, and another 400 are struggling financially.
Cancer patients turned away from local clinics will likely have to travel to seek care at hospitals – and those hospitals may not have the capacity to accommodate them.
Hospital care is also more expensive. A study from Milliman, a nationally recognized actuarial firm, found that Medicare’s costs were an average of $600 more per month for cancer patients treated at a hospital outpatient center than in a physician’s office. The government’s share amounts to an extra $6,500 per patient per year. Reducing seniors’ access to care in doctors’ offices and clinics will actually end up costing the government more money.
Sequestration is an indiscriminate tool for controlling costs and already impacting all Medicare providers and reimbursement for Part B drugs. Yet now, some lawmakers are proposing deeper cuts to Medicare Part B drugs.
Fortunately, Rep. Dave Reichert, R-Wash., has been working with the Washington State Grange on this issue. Instead of supporting misguided reductions that will exacerbate dangerous trends, Reichert has dedicated himself to the health and well-being of his constituents. Here in the Evergreen State, we appreciate his resistance to further Part B cuts.
The town doctor is a vital access point for many rural seniors. Creating a larger gap between Medicare payment rates and the cost of delivering care will only drive more doctors out of business and hurt already underserved communities. Lawmakers in the nation’s capital must protect our seniors from being turned away when they most need access to care.
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