Cuts to cancer clinics put new pressure on Obama administration

The Obama administration is about to face a deluge of intense, bipartisan pressure to reverse Medicare cuts that are threatening cancer patients’ access to treatment.

About 50 congressional offices, from both parties, have already offered to lobby the administration over cuts to cancer treatment clinics. The cuts, first reported by The Washington Post, were imposed this week as part of the automatic spending reductions known as sequestration.

“What you would hope is this would sort of wake up the administration ... that at least the administration would step back and see what they’re really doing,” said Ted Okon, director of the Community Oncology Alliance.

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Cancer clinics, many of them in rural areas, have already begun turning away new Medicare patients because of unexpected sequestration cuts. Some clinics could be forced to close their doors altogether if the cuts are not reversed quickly, Okon said.

The White House and Republicans have traded shots for months over who is to blame for the sequester. But the administration is squarely in the hot seat over the cuts to cancer clinics, because the clinics say the administration has the power to save them.

“This is not cutting off another White House tour or even, God forbid, furloughing people, which is bad enough,” Okon said. “We’re talking about a serious situation that you’re not able to reverse.”

The clock is ticking, as the full severity of the cuts will become apparent in about two weeks, when clinics get paid for the claims they’ve submitted.

Okon says clinics will be “hit between the eyes” once that happens, and will begin to question how long they can stay in business.

That makes pressure on the administration even more important. Even a strongly bipartisan, fast-tracked bill probably couldn’t get through Congress fast enough to save cancer clinics from closing, Okon said.

“The problem with a bill is ... we’re in a crisis mode,” he said.

Okon said roughly 50 congressional offices had reached out to offer their support by Thursday afternoon, less than 24 hours after the Post’s report was published. One lawmaker called directly, offering to take the lead on a letter to the administration. 

The support has been bipartisan, Okon said.

“There’s a lot of members that are really supportive on this issue,” he said.

The cut caught both clinics and congressional offices off guard this week — in part because of the longstanding assumption that sequestration wouldn’t actually happen, and also because of the surprising way its Medicare cuts were applied.

Medicare pays cancer clinics based on the cost of the drugs they use. It pays the average sales price of the drugs, plus an additional 6 percent to cover operational costs.

Sequestration included an across-the-board 2 percent cut to Medicare. When the Medicare agency applied that cut to cancer clinics, it cut from the entire payment, not just the 6 percent reserved for their own costs.

No one thought sequestration’s cuts would be applied to the underlying cost of drugs, Okon said.

“There’s a lot of people out there, members and staff, who really didn’t believe it would be applied to the drug side ... so frankly there are a fair number of people out there who are shocked.”

He doesn’t believe the automatic cuts were supposed to apply to drugs, and is asking lawmakers to push the Medicare agency to pull back the cut altogether, or at least scale it back so it only applies to payments for clinics’ operational costs.

Okon said the cuts came as a surprise in part because of poor communication from the administration. 

“We’re hoping that cooler heads prevail here. It’s a little distressing. I understand that no one thought sequestration was going to get implemented, but any time there’s a pay cut, there’s a rulemaking” with opportunities for public comment, Okon said.

But that process didn’t apply to the cuts under sequestration.

“The extent of the knowledge on this was a three- or four-paragraph e-mail that came from (Medicare),” he said.

When his group or lawmakers asked for details from Medicare, the agency sent them to the White House budget office, he said.

“It’s crazy. It’s unworkable,” Okon said.