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GAO-05-142R 1 (2004-12-01)

handle is hein.gao/gaocrptaqpm0001 and id is 1 raw text is: SGAO A.. Accoutablity Ineriy Reliability United States Government Accountability Office Washington, DC 20548 December 1, 2004 The Honorable Joe Barton Chairman Committee on Energy and Commerce House of Representatives Subject: Medicare Chemotherapy Payments: New Drug and Administration Fees Are Closer to Providers' Costs Dear Mr. Chairman: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)' required the Secretary of the Department of Health and Human Services to change the payment rates for chemotherapy-related drugs and chemotherapy administration services. These changes followed reports that Medicare payments for chemotherapy-related drugs were much higher than physicians' costs to acquire them, and oncologists' assertions that drug overpayments were needed to compensate for inadequate payments for chemotherapy administration services.2 In addition, the Centers for Medicare & Medicaid Services (CMS) made changes in billing rules for chemotherapy administration services. However, oncologists have been concerned that even with these changes, Medicare payments may not cover the costs of providing chemotherapy services in 2005. To respond to your request that we review the adequacy of Medicare payments for chemotherapy-related drugs and chemotherapy administration services in 2004 and 2005, we assessed the changes in these payments and compared the payments to the estimated costs of providing these services. To estimate payments and costs for chemotherapy-related drugs, we selected 16 drugs billed by oncologists to Medicare that represented three quarters of Medicare 'Pub. L. No. 108-173, § 303, 117 Stat. 2066, 2233. 2See GAO, Medicare: Payments for Covered Outpatient Drugs Exceed Providers' Cost, 4AO-..O 1- 1 (Washington, D.C.: Sept. 21, 2001). 3For example, prior to 2004, oncologists were allowed to bill for the administration of only one chemotherapy drug per day by injection, referred to as push technique, regardless of the actual number of drugs administered. MMA required CMS to evaluate this policy and make changes as appropriate. CMS now allows oncologists to bill for each additional drug administered by push technique. See, Medicare Program; Changes to Medicare Payment for Drugs and Physician Fee Schedule Payments for Calendar Year 2004, 69 Fed. Reg. 1084 (2004) (to be codified at 42 C.F.R. parts 405 and 414). GAO-05-142R Medicare Payments to Oncologists

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