Medicare is cutting critical cancer care funding — it’s time for Congress to step in

Over the past decade, hospital-driven acquisition of independent physician practices nationwide has been well-documented. According to one report, the pandemic accelerated this trend, with hospitals gobbling up over 3,200 physician practices in 2019 and 2020 alone, resulting in an 8 percent jump in the number of hospital-owned practices. This underscores the pressure independent physicians are facing as they navigate rising administrative and financial burdens.

Consolidation raises out-of-pocket costs for patients and increases costs to the overall health care system with no evidence of increased quality or efficiency. Policymakers say they want to lower health care costs, yet the Centers for Medicare & Medicaid Services (CMS) is once again pursuing policies that will exacerbate consolidation pressures.

Community cancer clinics offer tremendous value to patients, as they provide access to high quality care in the most cost-efficient setting, close to patients’ homes and support systems. Unfortunately, Medicare’s Physician Fee Schedule (PFS) Final Rule for 2023 is the latest in a wave of payment cuts that threaten to critically destabilize Americans’ community cancer practices. Physicians, including community oncologists, are currently facing an alarming 4.5 percent cut during one of the most economically turbulent times in recent history.

Oncology has one of the highest rates of consolidation, largely driven by payment disparities across different sites of service. This means that Medicare pays different rates for the exact same patient for the exact same service depending on whether the service is provided in the physician office setting or in the hospital outpatient setting, which is often more expensive. For example — because patient cost sharing is based on a percent of the total charge — a patient may pay twice as much for cancer treatment if they receive care in the hospital outpatient department instead of a physician’s office.

This payment disparity also creates a financial incentive for hospitals to acquire community oncology practices. According to the nonpartisan Medicare Payment Advisory Commission (MedPAC), “payment differences across settings encourage arrangements among providers—such as the consolidation of physician practices with hospitals—that result in care being billed at the payment rates of the provider with the highest rates, increasing program and beneficiary spending without meaningful changes in patient care.”

And yet, Medicare is slashing reimbursement to community oncologists at the same time it is increasing reimbursement to hospital outpatient departments. While physician practices are set to see a significant decrease due to the -4.5 percent cuts mentioned above, hospital outpatient departments are set to see a +3.8% increase from CMS in 2023. These cuts make no sense, neither from a fiscal or logical standpoint. Unless addressed by Congress before the end of this year, these cuts will be devastating to independent practices and predictably result in further hospital-driven consolidation.

Fortunately, Reps. Ami Bera, MD (D-Calif.) and Larry Bucshon, MD (R-Ind.) have introduced bipartisan legislation, which would go a long way toward stabilizing struggling practices and safeguarding cancer patients’ access to high value care. By blocking much of these cuts from coming into effect on Jan. 1, the Supporting Medicare Providers Act of 2022 (H.R. 8800) would extend a critical lifeline to physicians, including the community oncologists that thousands of Americans rely on for quality cancer care.

Congressional action has averted disaster before; lawmakers’ leadership is desperately needed again this year. It’s not too late for Congress to protect access to community cancer care. I urge Congress to quickly pass the Supporting Medicare Providers Act of 2022 so that America’s community cancer care providers can continue providing innovative, life-saving care to America’s cancer patients.

Marcus Neubauer, MD, is the chief medical officer of The US Oncology Network.