Friday, March 4, 2011

Is this double dipping? A new bipartisan House bill on oncology reimbursements

Here is another gem from the House of Representatives: a bipartisan bill to increase Medicare reimbursements to community oncology practices. While at first glance this seems like a reasonable idea, this detail is puzzling:
The so-called "prompt pay" legislation excludes certain discounts extended to wholesalers when calculating Medicare reimbursements and is strongly supported by oncologists.
Confused? Met too. Here is how I understand it. Many community oncology practices have set up infusion clinics, where they administer intravenous chemotherapy on site to their patients. To stock these infusion centers they deal with drug manufacturers and distributors to purchase the drugs at wholesale prices. The bigger the buy, the bigger the manufacturer discount. To the best of my knowledge these discounts are proprietary information, guarded like state secrets. Yet despite these discounts, the clinics charge Medicare a premium for the drugs themselves as well as for the service of administering. The way this legislation looks to me is that it will completely eliminate any reduction in reimbursement related to these discounts. Double dipping, anyone?

Now, I have many friends who are oncologists, and this is really not a slur against them. But these infusion clinics have always represented a cash cow for these practices. And who would not want to have a steady source of income to maintain a robust practice and have some money left over for a life? Again, this is not an indictment of community oncology practices. If, however, one takes an external perspective, this bill becomes something of an anathema to improving efficiency of healthcare delivery. If the reimbursement rates for administering these already exorbitantly expensive drugs improve further, will it not become even more difficult for an oncologist to tread the fine line of the conflict of interest between treatment only when it is in the patient's best interest and treatment for income optimization? Again, I want to point out that I am not singling out oncologists, as it is a part of the human condition to rationalize our selfish decisions by putting them in an altruistic light. And given the amount of uncertainty about who might respond to these drugs, it is easy to convince oneself that a trial of a therapy may be a reasonable idea, with the reimbursements providing a nudge in that direction.

A couple of quotes from the sponsors of the legislation are also worth reprinting:

"On any legislation today, you have to find a way to pay for it. And like any legislation, that's an issue with this one," Whitefield said. 

"But to be truthful, because of the oncologist groups and patient groups and others, we think that there may be some provisions in the healthcare bill that passed last year that we may be able to utilize some of those funds for this. All of it's about healthcare, and if we can convince people that this is more important than the others then we can do it."     
On any legislation today? You mean it has not always been like this? I guess we have all gotten used to credit as a life style, and now it is time to pay the piper.

Now, what about this: "Because of the oncologist groups and patients groups and others..."? Are they saying what I think they are saying? That because groups are likely to benefit are saying that this is vital, it is in fact vital? I also have to wonder who those "others" are. Hmmm, I wonder...

And this: "All of it's about healthcare, and if we can convince people that this is more important than others then we can do this." OK, so the statement is so grammatically abominable and non-sensical that I can interpret it any way I like. And it seems to me that they are implying that increasing these already hefty reimbursements is more important than stuff like paying for prenatal care and immunizations to the poor? And other essential services to the Medicare population? Well, if this is not the a poster child for why we need to be articulating the value of healthcare, I do not know what is.  


  1. It is so good to have you back in the blogosphere!

  2. more on profits in chemo drugs:1. 2.
    As always, thanks you very much for your blog posts