Fresno cancer doctor: As of Jan. 1, Medicare will cut its payments for crucial drugs

Starting Jan. 1, as per a recent directive from the federal Centers for Medicare & Medicaid Services (CMS), Medicare patients with serious medical conditions will see a dramatic change in their care.

Anyone who gets any medical treatment often immediately becomes aware of the high cost of health care in the U.S., particularly the staggeringly high cost of drugs. As a practicing oncologist I am very close to the problem. The prices of drugs are high, and keep rising every year — stressing the budgets of my patients, their families and of companies that buy health insurance for their employees.

In order to address this problem, in November the Trump administration released a nationwide, mandatory Most Favored Nations (MFN) model (also known as CMS-5528-IFC). The plan is to reduce the payments for the top 50 Medicare Part B drugs. In other words, Medicare is going to start paying less money to the providers, and does not touch the actual price they pay to get these drugs from pharmaceutical companies. The providing doctor, clinic or hospital will become responsible for paying for the difference in cost. This initiative is being presented as an “experiment,” albeit one that will run for a staggering seven-year duration. This is being implemented with just a six-week notice from the release of this plan on Nov. 27.

The payments will now be based on the cost of these drugs in other (mostly European) countries where the prices are much lower. The administration expects that the difference between the old and new payment will be borne by the medical provider (doctor, clinic, hospital). CMS acknowledges that this rule is financially ruinous to providers, and that many doctors will stop using these drugs, or send the patient “somewhere else” to get therapy. Since only a very few centers in the country have been exempted from this rule, most patients will have to travel hundreds of miles to get such therapy. Many patients will likely decide to forgo lifesaving cancer therapy.

Calculations made by CMS’s own actuaries (and published online) indicate that they estimate that 19% of patients will skip care completely. With CMS focusing solely on the expected benefit, i.e., savings, the fact that patients will forgo care is thought to be an acceptable side effect.

CMS expects that eventually drug companies will drop their prices. This may take years, if at all. In the meanwhile, providers of medical care will be forced to make treatment decisions based on financial considerations. Concern for using the most appropriate drug for the patient’s condition will now be secondary to cost concerns. While this plan effects patients with allergies, asthma, autoimmune diseases and several serious intestinal disorders, cancer patients will be hurt most (many of these 50 drugs are the latest and the most effective ones we have).

All through 2020, due to the pandemic, providers of medical care have been struggling to keep up with their patients’ needs. I have seen patients have their care delayed, miss cancer screenings and surgeries canceled. On top of this, when this measure is implemented, we will lose several years’ worth of gains in medical advances in an instant.

Medical practices like ours, and many professional medical organizations, have been in discussions with Medicare for many years about payment reforms. Our goal has always been that any payment reform should reduce drug costs, and at the same time increase access, and reduce the out-of-pocket expenses. This MFN plan achieves none of these goals.

The MNF plan is a dangerous and knee-jerk proposal that has been introduced without adequate thought to the safety and well being of patient care. It will dramatically reduce access to care.

This story was originally published December 18, 2020 at 6:00 AM.