“Everywhere the old order changes, and happy are those who can change with it,” said Sir William Osler, a Canadian physician and one of the founders of the Johns Hopkins School of Medicine.1  The continually changing environment of modern oncology is no exception, and the mode of chemotherapy drug delivery has shifted from inpatient to outpatient settings.  Chemotherapy treatment that was once delivered only in hospital environments is now administered primarily in outpatient environments, such as the oncology office, outpatient hospital department, or patient’s home.  The shift occurred in the early 1990s driven by governmental financial restrictions that impacted delivery of care in favor of the outpatient setting in addition to the advantages of administration that was safe and easy, convenience, and patient comfort.2

The financial environment of the most recent decade, however, has seen reimbursement policies that have shifted as quickly as the sands of the desert. The cuts in reimbursement for outpatient therapy, while they have not yet moved cancer care back into the hospital setting, are impacting delivery of care.  The Medicare Prescription Drug Improvement and Modernization Act (MMA), first enacted in 2003 but not put into effect until January 2005, mandated significant cuts in payments for outpatient chemotherapies.3  Additional reductions in outpatient reimbursements were put into effect in 2010 by the Center for Medicare and Medicaid Services (CMS), which implemented cuts in payment levels for chemotherapy administration codes, according to Dr. Joseph S. Bailes, MD, ASCO immediate past chair of government relations.  The CMS has agreed to phase in, over a 4-year period from 2010 through 2013, cuts in reimbursement that result in an overall 1% reduction on payments for oncology.4

The changes in oncology chemotherapy reimbursement of the MMA 2003 were designed to address the significant inequities between payment rates for chemotherapy drugs, set at 95% of the average wholesale price, and actual drug costs that were 19% to 34% below the average wholesale price. At the same time, the majority of oncologists viewed themselves as inadequately reimbursed for the costs of administering the infusions.  With the 2003 to 2005 changes in the law, chemotherapy reimbursements were set at 1.06 times the average cost of the drugs, and oncologists were paid more for administration of the chemotherapy infusion.  What also occurred was that access to chemotherapy drugs for cancer patients increased.   In many cases the numbers of patients administered higher priced chemotherapy agents such as docetaxel (Taxotere®, Sanofi Aventis) actually went up.3 The alleviation of concern about patient access to treatment is supported by 2 previous studies.  One study showed that the changes did not have a major impact on patients, although problems in the elderly (above 65 years of age) still needed to be studied.5   In another study,  no significant changes in travel distance, or wait times were detected after implementation of the MMA 2003.6 

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The 2010 to 2013 cuts are across-the-board, but the 56% that Medicare pays for the delivery of chemotherapy will be reduced to 45%.7 One recent study of patients with metastatic lung cancer showed that the costs of outpatient chemotherapy, and other treatments from 2001 through 2006, exceeded the expenses of inpatient care. The finding that much of the $125,000 average total cost of treating this common type of cancer in the outpatient setting needs to be taken into account when allocating scarce resources, or designing appropriate medical interventions for a patient population.8