Doubling and Extending the Medicare Sequester Cut Will Backfire, Reducing Access to Cancer Care for Seniors and Fueling the Federal Deficit for Taxpayers

Sequester cuts to Medicare payments are a destructive and shortsighted budget gimmick that hurt cancer patients and ironically fuel the federal deficit”

— Ted Okon, executive director of COA

WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, November 16, 2017 — The Community Oncology Alliance (COA) is warning Congress that a new, increased sequester cut to Medicare payments will severely threaten community cancer providers and the nation’s cancer care delivery system. The Medicare sequester cut has already dealt a severe blow to community cancer care, and doubling and extending it will be catastrophic. This budget gimmick will further reduce access to cancer care for Medicare patients, particularly in rural communities, limit provider choice, and have the unintended consequence of actually increasing the federal deficit.

The Congressional Budget Office (CBO) has warned that “pay-as-you-go” rules require a 4% sequester cut to Medicare to offset the deficit increases triggered in the current tax bill. This would double the ongoing 2% sequester cut to Medicare payments implemented when Congress was unable to solve the nation’s budget deficit in 2011.

Policymakers in Washington should note that blunt budget cutting gimmicks like the sequester cut backfire. They have terrible unintended consequences and do more harm than good for patients and taxpayers. According to the 2016 Community Oncology Practice Impact Report, in the five years since the last Medicare sequester went into effect, 91 cancer treatment clinics have closed and 130 independent community cancer practices, typically comprised of multiple treatment sites, have been forced to merge into hospitals.

Community oncology practices are where the majority of Americans with cancer are treated. Closing them creates problems with access to cancer care and consolidation into more expensive hospital systems, driving up costs for seniors with limited mobility and fixed incomes, as well as all taxpayers who fund Medicare. The actuarial firm Milliman found that the consolidation of independent community cancer practices with hospitals cost Medicare and taxpayers $2 billion in 2014 alone. In addition, Medicare beneficiaries responsible for the 20% copayment saw their bills rise by $500 million in that same year.

“I have seen firsthand the devastating effect of the blunt axe of the sequester cut on community oncology practices and the patients we serve. Extending it would be a true death blow for many practices struggling to survive against expensive, predatory hospital systems,” said Jeff Vacirca, MD, president of COA and CEO of NY Cancer Specialists in Long Island, NY. “Millions of American’s battling cancer rely on our practices for high quality, affordable, cancer care close to home. I just don’t understand how Congress can threaten this.”

What has worsened the impact of the current 2% sequester cut is the prior Administration’s decision to apply the cut specifically to payment for cancer drugs and other critical specialty therapies. By doing so, the Administration illegally bypassed the Congress, which in 2003 set the reimbursement rate for Medicare Part B drugs in law. Unfortunately, the current Administration has not fixed this illegal and unconstitutional budget maneuver that has adversely impacted cancer care in this country and driven up costs.

“Sequester cuts to Medicare payments are a destructive and shortsighted budget gimmick that hurt cancer patients and ironically fuel the federal deficit,” said Ted Okon, executive director of COA. “It is beyond my comprehension how Congress keeps using the sequester when it has already hurt seniors with cancer. We need Congress and the Trump Administration to undo what is devastating community cancer care.”

Nicolas Ferreyros
Community Oncology Alliance
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