Medicare Compliance & Reimbursement

Oncologists should be able to afford the new, reduced payments for medications that take effect in January, claims the Government Accountability Office in a new report ("Medicare Chemotherapy Drugs: New Drug And Administration Fees Are Closer To Providers' Costs," GAO-05-142R). The GAO studied 16 drugs commonly billed by oncologists and found that Medicare payments would be 22 percent above oncologists' costs in 2004 and 6 percent above their costs in 2005.
 
The American Society for Clinical Oncology responded that a survey of its members found that payments would be only 4 percent above members' costs in 2005. And ASCO criticized the GAO study for failing to account for the severe variations in the acquisition cost for drugs among different providers.
 
The GAO insists that even though Medicare practice expense payments will drop overall in 2005, they'll cover "nearly as much or more of oncologists' costs than will payments for all services to all specialties." But ASCO responds that other specialties reap more of their revenues from payments for the physician work RVUs than oncologists, and thus other specialties can more easily stand to lose on practice expense payments.