How is Sequestration Affecting Cancer Care Access?

May 2013

An April 3, 2013, article in the Washington Post reported that “cancer clinics are turning away thousands of Medicare patients” because of the budget sequester. The article was published one month after the sequester, or the automatic budget cuts required by the Balanced Budget Act, became effective. The Post article and subsequent news coverage triggered vigorous debate about the impact on oncologists and their patients of the two percent cut in Medicare payments. A news article in the Cancer Letter reached different conclusions from the Washington Post. Paul Goldberg reported in the Cancer Letter of April 26, 2013, that patient advocacy groups had not as of that date received complaints from cancer patients about interruptions in their care as a result of the sequester. In addition, he reported that the shift of patients from community practices to hospitals was a trend that was well underway in advance of the sequester.

Members of Congress reacted to news reports about the impact of sequestration on cancer physicians and patients by taking a range of actions. Representative Renee Ellmers (R-NC) introduced legislation – H.R. 1416, the Cancer Patient Protection Act of 2013 – that would exempt payments for drugs and biologicals that are physician-administered from the automatic 2 percent cuts that are required by budget sequestration. The legislation currently has 64 cosponsors.

A bipartisan group of Representatives who are members of the House Ways & Means and Energy & Commerce Committees have written to Marilyn Tavenner, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), requesting an assessment of the impact of the sequestration cuts on patient access to cancer care as well as a report regarding the flexibility that CMS possesses with regard to the implementation of the Medicare cuts required by sequestration.

The American Society of Clinical Oncology has undertaken a survey of its members to ascertain the impact of the sequester on cancer care access.

Cancer patient advocates have issued a statement on the sequestration cuts and their impact on access to care that recommends that any action to address Medicare payments for cancer care be a comprehensive payment reform effort that rewards cancer care planning and coordination and eliminates the inappropriate incentives of the current drug reimbursement system. NCCS joined its patient advocate colleagues in the statement of principles of Medicare cancer care payment reform.

NCI Director Varmus Addresses the Impact of the Sequester on Cancer Research

In a May 7, 2013, memo to the National Cancer Institute (NCI) community, NCI Director Harold Varmus announced that fiscal year 2013 funding for NCI will be $4.78 billion, or $293 million (5.8%) less than fiscal year 2012 funding. Dr. Varmus reported to the cancer community that, taking into account fixed costs, the sequester will result in these reductions: ongoing (non-competing) grants will be reduced by about 6%, centers and other research programs by 6.5%, and research and development contracts by 8.5%. The funding decisions at NCI will mean that slightly more than 1000 new and competing grants will be awarded in FY 2013, compared to 1100 in each of the past two years. The success rate of 13 to 14% for research applications will decline slightly as a result of the sequester.

Cancer research advocates have expressed concerns that the slowdown in the pace of new research awards will impede innovation in biomedical research and therapy development.

The day after the NCI announcement related to sequestration, the National Institutes of Health (NIH) published a notice defining the impact of sequestration on grant awards. The NIH notice states that inflation increases will not be granted in FY 2013 and grant award levels will also be reduced.