Build Back Better Act May Result in Practice Closure and Increase Cancer Care Costs for Independent Community Oncology Practices

The Build Back Better Act will result in a 42.9% cut in Medicare payments to independent oncology practices, which could result in increased costs leading to the closure of these practices and leaving patients to travel to more expensive hospitals, according to an independent analysis from the Community Oncology Alliance (COA).¹

The analysis investigated the current price negotiations between drug companies and the government that will be applied for top Medicare Part B drugs, a good number of which are used to treat patients with cancer. The new act would have oncologists and physicians receive lower payments, rather than drug manufacturers submitting a rebate to the government for lower negotiated drug prices. A number of practices currently rely on the payments in order to help to cover overhead costs, which are currently increasing because of inflation and shortages.

“When will Congress learn that pressuring providers by ratcheting down Medicare reimbursement has only led to consolidation and higher costs for patients. This isn’t hype—it’s fact-based by history. If Congress doesn’t fix this Build Back Better Act, Americans with cancer and other serious diseases are going to be shocked when their drug costs go up, not down,” Ted Okon, executive director of the COA, said in a press release.

Similar to prior proposals, the act would most significantly cause reductions in oncology and rheumatology practices.2 Specifically, medical oncology (42.9%), hematology/ oncology (41.3%), and rheumatology (48.5%) would suffer the worst reductions. Other reductions would take place for radiation oncology (39.7%), gynecology/oncology (39.3%), and hematology (38.4%).

The COA conducted an additional study indicating that hospitals were charging patients and insurers 3.8 times the acquisition price of oncology drugs to 340 hospitals.3 Additional data highlighted that hospitals may be charging cash-paying patients approximately the same costs as the median commercial prices—1.02 times. The study also found pricing inconsistencies between hospitals, with select drugs costing 2 times more than the median.

The COA is asking Congress utilize language within the new act, indicating that drug manufacturers will be responsible to directly refund the government excess costs above the maximum fair price. This change will help to ensure that independent physicians and community oncology practices are not put in unnecessary financial risk.

References

1. New analysis shows build back better act will result in 42.9% payment cuts to cancer providers. News Release. Community Oncology Alliance. November 19, 2021. Accessed November 22, 2021. https://bit.ly/3FEqNKA

2. Avalere. Part B drug negotiation under BBBA would reduce payments to providers. November 18, 2021. Accessed November 23, 2021. https://bit.ly/30UYpEZ

3. Community Oncology Alliance. Examining hospital price transparency, drug profits, and the 340B program. September 14, 2021. Accessed November 22, 2021. https://bit.ly/3HH5j1t