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Oncologists sue Health and Human Services Secretary Azar over Part B drug payment cuts

The cuts have forced the closure or acquisition of numerous independent cancer clinics and upped the cost to Medicare and its beneficiaries.

Susan Morse, Senior Editor

The Community Oncology Alliance has brought a lawsuit to stop the government from continuing the 2 percent sequestration cuts to Part B drugs that it says has resulted in Medicare and cancer patients paying more money and the closure or acquisition by hospitals of numerous independent outpatient cancer clinics.

The group representing oncologists brought the civil action  Thursday against the Office of Management and Budget, its director Mick Mulvaney, the Department of Health and Human Services and Secretary Alex Azar, in U.S. District Court in Washington, D.C.

Starting in April 2013, the government has applied a 2 percent cut to reimbursement for payment of Part B drugs, including oncology drugs, due to sequestration. Sequestration has been extended, most recently by the Bipartisan Budget Act of 2018.

The cuts have closed the doors of estimated 135 community cancer clinics, the lawsuit said. Another 190 have been acquired by hospitals.

Over the last decade, 1,653 community oncology clinics and practices have closed, been acquired, undergone corporate mergers or have reported that they are struggling financially, according to the lawsuit. 

"Hospitals continue to acquire physician-owned clinics and shut down the least profitable, particularly in rural areas," Attorney Alan Freeman said in the lawsuit.

This combined with the Part B's 340B program that favors hospitals represents a "double whammy," he said.

More than 60 percent of cancer patients in the United States rely solely on Medicare, and prior to the sequestration, more than 80 percent were treated in community-based settings, according to the lawsuit. But the lower reimbursement for cancer drugs caused a shift from the primary treatment in community practices to the more expensive hospital setting.

This has resulted in more expensive reimbursement by Medicare - $2 billion in 2014 alone - and an increase of $500 million in copayments from Medicare beneficiaries.

The drug reimbursement cuts are unconstitutional because they  violate the separation of powers doctrine, the lawsuit said. The Medicare Modernization Act of 2003 provides a formula for which Medicare Part B outpatient providers and suppliers are to be reimbursed. Sequestration has effectively amended the Act, which is a constitutional violation.

"This unconstitutional practice must be stopped or else community and rural oncology practices will continue to close and cancer patients will continue to suffer," Freeman said.

The oncologists want a declaratory judgement and a permanent injunction that the cuts by the government are unconstitutional and that the sequestration to Medicare Part B drugs is invalid.

Legislators, including former members of Congress Tom Price, who later became HHS secretary, and Mick Mulvaney, have long been asking the government to stop the Part B cuts.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com