October 16, 2014
2 min read

Medicare reimbursement policy failed to significantly reduce chemotherapy cost

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The Medicare Prescription Drug, Improvement and Modernization Act of 2003, intended to slow the skyrocketing costs of drugs the federal government must pay for to treat Medicare patients, does not appear to have significantly affected the cost of chemotherapy, according to study results.

“Economists expected a sharp decline in the use of the most expensive drugs targeted by the law, because reimbursement to oncologists for these drugs was reduced, but that did not happen,” Mark C. Hornbrook, PhD, of Kaiser Permanente Northwest, said in a press release.

The Medicare Prescription Drug, Improvement and Modernization Act (MMA) reduced fee-for-service payments for outpatient chemotherapy. For example, reimbursement for a typical daily dose of paclitaxel declined from $1,245 to $135, according to background information provided by researchers.

Hornbrook and colleagues assessed how the MMA affected chemotherapy prescribing in fee-for-service settings compared with integrated health networks.

They assessed 5,831 chemotherapy regimens for 3,613 patients treated for colorectal cancer or lung cancer between 2003 and 2006.

The patient population was gathered from four geographic regions, seven health maintenance organizations and 15 VA Medical Centers. Researchers chronicled the number and timing of chemotherapy drugs administered based on medical record data through 15 months post-diagnosis.

Receipt of chemotherapy that included at least one drug for which Medicare reimbursement declined after implementation of the MMA served as the primary outcome.

Results showed the likelihood of receiving a drug affected by the MMA were lower in the post-MMA period (OR=0.73; 95% CI, 0.59-0.89).

Odds ratios differed based on cancer site: colorectal cancer, OR=0.65 (95% CI, 0.46-0.92); non–small cell lung cancer, OR=1.6 (95% CI, 1.09-2.35); and small cell lung cancer, OR=0.63 (95% CI, 0.34-1.16).

Patients treated in fee-for-service settings were less likely to receive regimens that included MMA-affected drugs (OR=0.73; 95% CI, 0.59-0.89). Researchers observed no differences in integrated health network settings after implementation of MMA (OR=1.01; 95% CI, 0.66-1.56).

Researchers found that patients with colorectal cancer were less likely to undergo a chemotherapy regimen that included an MMA-affected drug in both care settings in the post-MMA period. The investigators observed the opposite pattern for patients with NSCLC.

“Although the potential profitability from drugs may be an important driver of physician behavior in the [fee-for-service] system, other factors are also important,” Hornbrook and colleagues wrote. “The change in reimbursement after MMA passage appears to have had less of an impact on prescribing patterns in [fee-for-service] than the introduction of new drugs and clinical evidence as well as other factors driving adoption of new practice patterns.”

Disclosure: One researcher reports an employment/leadership position with and stock ownership in WellPoint.