Corporate Compliance

OIG: Reimbursements for cancer drugs exceed cost

Compliance Monitor, October 26, 2005

The OIG has concluded that physician practices specializing in hematology, hematology/oncology, and medical oncology can generally purchase drugs for the treatment of cancer patients at less than reimbursement rates established under Medicare Part B.

The OIG reached this conclusion by estimating average prices paid by physician practices for 39 payment codes. The 39 codes constituted more than 94% of the $4.5 billion spent on Medicare-allowed drugs associated with these three specialties in 2004.

The OIG has recommended that Congress consider the results in any deliberations regarding Medicare Part B reimbursement methodology for drugs for the treatment of cancer patients. The Centers for Medicare & Medicaid Services stated that the report provides valuable information about the payment adequacy for Part B drugs used in cancer treatment.

The review focused on purchases made by physician practices during the first quarter of 2005 (January through March).

Because Medicare Part B reimburses physician practices for drugs based on payment codes, the OIG compared the reimbursement for selected payment codes with the purchase prices of the related drugs.

    Click here to read the audit report, "Adequacy of Medicare Part B Drug Reimbursement to Physician Practices for the Treatment of Cancer Patients," (A-06-05-00024) issued Sept. 26, 2005.

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