I am speaking on behalf of the American Society of Clinical Oncology. ASCO is the national organization representing physicians who specialize in the treatment of cancer, and our members, and our members’ patients, would potentially be significantly affected by the manner in which CMS implements the competitive acquisition system. 

ASCO’s members are extremely concerned about the proposed contractor system, which is a completely untested approach to cancer care for Medicare patients. It is essential that patient access and quality of care be preserved, and it is by no means clear that the system would be consistent with that objective. Moreover, although use of the contractor system is ostensibly voluntary, the alternative reimbursement system enacted in the Medicare Modernization Act may prove to be inadequate for many physicians. CMS’s priority should be to ensure that the care of elderly patients with cancer is not adversely affected by the recent changes in the law.

As we read the statute, the principal elements of the system as it would directly affect physicians and their patients are as follows: 

• On an annual basis, physicians would elect whether to receive their drugs from a Medicare contractor or, instead, continue to purchase them and submit claims for reimbursement as they do currently. 
  
  
• Physicians would order drugs from the contractor by writing a prescription for a patient. The prescription could cover drugs for a single treatment or for as much as an entire course of treatment. 
  
  
• The contractor would ship the drugs to the physician on a timely basis and, if necessary, on an emergency basis. 
  
  
• The contractor would bill Medicare for the drugs when dispensed but would not bill the patient for the deductible and coinsurance until the drugs had actually been administered. 
  
  
• Physicians would be required to notify the contractor when dispensed drugs were administered. 
  
  
• In the case of drugs that were dispensed but never administered, there would be an adjustment process in which Medicare would recover from the contractor the Medicare payments for drugs that were not administered. 
  
  
• In emergency situations, a physician could administer drugs from the physician’s own inventory and seek replacement product from the contractor.

We believe that the statute leaves unanswered a number of basic questions about operation of the contractor system. Until CMS resolves these questions, ASCO is unable to assess whether the system is compatible with quality patient care or even whether it is workable in practice. The issues requiring resolution include the following: 

• First, handling of inventory: If a physician orders the drugs for much or all of a patient’s entire course of therapy, as the statute permits, would the physician be required to keep each patient’s supply of drugs physically separate from the supplies for other patients? Or, alternatively, could a physician intermingle the inventory of all physician-purchased and contractor-dispensed drugs and take drugs from the inventory without having to ensure that the specific vial administered to a patient was the same vial that the contractor dispensed for that patient? If physical segregation of each patient’s drugs is required, the system is probably unworkable. 
  
  
• Second, ordering drugs: Since chemotherapy regimens and the use of supporting drugs must often be adjusted during a course of treatment, how much flexibility would a physician have in ordering drugs? For example, in ordering drugs for a course of treatment, could a physician order types and quantities of drugs that would accommodate possible adjustments? 
  
  
• Third, denied claims: The statute appears to place the contractor at financial risk for denied claims, including denials based on inappropriate off-label use of the drugs or lack of medical necessity. Is that a correct reading of the law? Will the contractors be permitted to refuse to fill prescriptions because they believe that Medicare may deny coverage? If so, would the physician or patient have any recourse? What type of information will the contractors be permitted to demand from a physician prior to filling a prescription? If a claim is denied, would the physician be required to assist the contractor in appealing the denial and, if so, would the physician be compensated? Would the physician be required to provide medical records to the contractor? Would physicians be subject to post-payment audits regarding the medical necessity of the drugs they prescribed, and, if so, what would be the consequences of adverse findings in such an audit? 
  
  
• Fourth, unused drug: The statute appears to contemplate that the contractor will refund payment for drugs that were dispensed to a physician but not administered to the patient. Would the contractor simply incur a financial loss in such a case? What would happen to the unused drug? Would the contractor or the Medicare program have any recourse against physicians who prescribed and received drugs that they did not subsequently administer? 
  
  
• Fifth, product integrity: In addition to complying with CMS's product integrity standards as required by the statute, would the contractor be legally responsible for any injury to patients caused by any mishandling or mislabeling of drugs? 
  
  
• Sixth, costs incurred by physicians: If a physician obtains drugs from a contractor, the physician will still incur procurement, storage space, inventory management, and other drug-related costs. Will there be a Medicare payment to cover these expenses? 
  
  
• Finally, unpaid coinsurance: Would there be reasonable limits on methods used by the contractor in pursuing payment of coinsurance by patients? Would contractors be permitted to cease dispensing drugs for patients who have not paid their coinsurance?

Thank you for the opportunity to present the issues that we have preliminarily identified. We look forward to continuing discussions with CMS about the proposed implementation of this program.