Guest opinion: Part B cuts threaten rural communities

Nearly one million Washington seniors are enrolled in Medicare. This program serves an essential role in helping them afford the advanced drugs and medical treatments needed to fight disease and stay healthy.

Right now, however, some federal lawmakers are considering serious cuts to the program that could severely threaten the health and wealth of Washington’s seniors. 

Specifically, some are looking to squeeze more savings from Medicare Part B, the component of the program that covers sophisticated drugs requiring physician supervision. These treatments include injectable and infused drugs, such as chemotherapy. 

Under Part B, physicians purchase these complex drugs themselves. Then Medicare reimburses them according to a formula consisting of the average sales price of the drug and an administrative add-on covering associated costs like shipping and storage. Originally, that add-on was set at 6 percent.

This market driven structure has generated massive savings for Medicare and patients. The Congressional Budget Office estimated the program would save nearly $16 billion over 10 years with the formula. And several other reports have affirmed that the formula reduced Medicare spending growth. 

Earlier this year, thanks to across-the-board federal sequestration cuts, that Part B add-on of 6 percent was effectively dropped by two percentage points, to about 4 percent. Now, some in Congress want to pull back the rate even further.

Such a cut would devastate Washington seniors. 

Community-based cancer centers provide treatment to more than 80 percent of America’s cancer patients. But many are already struggling to stay in business. In fact, one report by the Community Oncology Alliance indicates about 290 oncology clinics have actually closed over the last six years, and another report by the American Society of Clinical Oncology (ASCO) found that a staggering 63 percent of small oncology clinics are likely to close operations, merge or sell in the next year.

Part B is a vital source of income for these clinics. An additional cut to the program’s payment rate for drugs will make it even harder for them to remain open, particularly those located in rural areas, which tend to face much higher fixed operational costs. Community physicians would be forced to turn away Medicare patients or shut down entirely. 

The disappearance of clinics would be particularly devastating to Washington. More than 65 percent of our state’s territory is considered rural. And an ASCO report found that rural communities are already underserved, with only 3 percent of oncologists located in rural areas.

Slashing Part B reimbursements would drive many community clinics out of business. And without access to local care, patients will be forced to travel great distances to receive Part B drug treatments in hospitals.

And at hospitals, Medicare and patients alike may face higher costs. A recent study from the Moran Company found that Medicare costs per day for chemotherapy treatments administered in a hospital were on average 24 to 40 percent higher than those administered in a physician’s office. But in many cases, the costs of delivering these services in the hospital setting are much higher. I have personally seen 300 percent cost increases for biologic medications delivered at hospitals.

Thankfully, Sens. Maria Cantwell and Patty Murray, along with Reps. Cathy McMorris Rodgers and Dave Reichert, are working hard to make sure that no further cuts are made to Part B. We need to support them in their efforts. If Part B payment rates are further diminished, community clinics will close, compromising care for many of Washington’s seniors and driving up long-term public insurance expenses.