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Join Us in Combating Sequestration Cuts

Beginning on April 1st, the federal budget policy known as “sequestration” sharply cut Medicare reimbursement rates for critical cancer drugs. Most government agencies and programs are being cut by 2% across the board, but for community cancer clinics – where more than 75% of American cancer patients receive their treatment – the effective cuts in Medicare reimbursement rates could be nearly a third.

This situation is already affecting seniors across the country as community clinics are being forced to turn away patients or even consider closing their doors. If nothing is done, countless cancer patients could end up having to travel longer distances for their care, resulting in delays, added expenses, and personal hardship.

By The Numbers:

  • 80% - The percent of American cancer patients who receive community-based cancer care at local clinics and doctors’ offices.
  • 2% - How much funding sequestration is supposed to be cutting across-the-board from federal programs like Medicare
  • 28% - The actual, effective cut in the reimbursement rates paid to community cancer clinics from Medicare for the treatment services they provide.
  • 1,254 – The number of community cancer clinics that have already closed their doors or reported financial hardship over the past four and a half years.

What is Sequestration?

In the Budget Control Act of 2011, the President and the Congress created an automatic, across-the-board 2% spending cut – known as “sequestration” – that would go into effect if a new federal spending plan was not adopted by the Congress. The purpose of this bill was to create a so-called ‘poisoned pill’ that would force Washington to pass a compromise budget – but instead of compromising, the automatic cuts were allowed to happen.

How Does Sequestration Affect Cancer Patients?

Community cancer clinics treat approximately 80% of all Medicare cancer patients. They are reimbursed for their work according to a formula in which Medicare pays them 100% of the Average Sales Price of the cancer drugs (ASP) plus an additional 6% to pay for the treatment and services provided by the clinic. This formula is known as ASP+6%.

Under sequestration, the reimbursement rate will be cut down to ASP+4.3%. Drug prices are going to stay the same, meaning that community cancer centers have to absorb that entire reduction out of their operating budgets.

Faced with a cut of nearly 1/3, many community cancer clinics – which are already facing reductions in their Medicare payments – will have to limit treatment or close altogether.

Many patients prefer to receive cancer treatment in community clinics that are closer to their homes. Some live far away from hospitals, and travel for regular treatment can be difficult or even prohibitive. If community cancer centers close or limit their services, patients will have to travel farther for their care. For senior citizens or those who are already suffering from cancer or other conditions, this can be a severe hardship that leads to delays in treatment and higher travel expenses.

Why These Cuts May End Up Costing Taxpayers More

Cancer treatments like radiation and chemotherapy are delivered to patients at both hospitals and community-based cancer care outpatient clinics. Community clinics typically provide cancer care at a lower cost than hospitals – saving money for both patients and the Medicare system – and they are frequently closer to where patients live. This also allows hospitals to focus their space and resources on treating conditions that can’t be served in other settings.

If community cancer centers close, those patients could be forced to travel to more expensive settings, farther away from their homes, resulting in delays for patients and higher costs for the Medicare system.

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