RWJF Content Alert - How Do Cuts in Medicare Reimbursement Affect Care?

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New Study Examines the Impact of the Medicare Modernization Act on Access to Cancer Chemotherapy Treatment

When the Medicare Modernization Act (MMA) mandated substantial reductions in payment rates for outpatient chemotherapy drugs in January 2005, many feared that the reductions would lead to a significant loss in access to quality treatment.

Contrary to initial concerns, however, a new study from the Changes in Health Care Financing & Organization (HCFO) project, funded by the Robert Wood Johnson Foundation, finds that the law’s reductions in payment rates for certain outpatient chemotherapy drugs did not reduce access. In fact, chemotherapy rates increased among lung cancer patients. Within one month of implementation of the new payment system, chemotherapy treatment increased 2.4 percentage points, and there were no significant changes in travel distance or wait times for those receiving treatment. The authors however note that physicians reacted by switching from dispensing the drugs that experienced the largest cuts in profitability, to other high-margin drugs, which may have offset some of the savings projected from passage of the legislation.

The study, published in this month’s issue of Health Affairs, is the first to assess whether MMA changed the access to quality care and likelihood that beneficiaries received chemotherapy treatment. The study concludes that payment reforms can have unintended consequences in how patients are treated and should be undertaken with caution.

Read the article.