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President Barack Obama walks off the stage to greet people in the audience after speaking about the Affordable Care Act during an event in the East Room of the White House in Washington, Thursday, July 18, 2013. Obama argued that his Affordable Care Act is holding insurance companies accountable and putting money back into the pockets of consumers. (AP Photo/Susan Walsh)

A health care work-around for Congress, but not cancer clinics

The Obama administration has released a rule to pay for congressional health plans under Obamacare, showing flexibility critics say was denied cancer clinics under sequestration earlier this year.

Senate Republicans amended the Affordable Care Act to require members of Congress and their staff to purchase insurance on the Obamacare exchanges. Democrats accepted this change, but congressional staffer have been looking for a work-around to keep their health care costs from spiking under the law.

The Office of Personnel Management (OPM) released a proposed rule Wednesday which would allow the government to contribute to Obamacare premiums.

OPM Director of Planning and Policy Jon Foley said the new rule would “implement the administrative aspects” of Congress’ shift from the generous Federal Employees Health Benefits Program to Obamacare’s exchanges.

But the Obama administration was less accommodating when reports surfaced in April that its method of applying sequestration cuts to Medicare Part B drug reimbursements could bankrupt cancer clinics. The reduced funding made it difficult for these clinics to pay for expensive chemotherapy drugs and remain financially viable.

“If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York, told The Washington Post at the time. “The drugs we’re going to lose money on we’re not going to administer right now.”

The furor even led a bipartisan coalition of 124 congressmen to ask the Center for Medicare and Medicaid Services (CMS) to consider docking the cuts from only one part of the payments. Then acting CMS Administrator Marilyn Tavenner replied that there was nothing she could do.

In both cases, the Obama administration’s interpretation of the law is open to question. OPM may not have the power or flexibility to interpret the law as they are planning to. David M. Erner told The New York Times, “I do not think members of Congress and their staff can get funds for coverage in the exchanges under existing law.”

The sequestration cuts may also violate a law requiring that the government pay physicians for in-office drug treatments under Medicare Part B with a simple calculation: the estimated sales price of the drug plus 6 percent, to pay for storage and the possibility the drug is more expensive than the government expected.

CMS is taking the two percent off the top of this figure to comply with sequestration.

Alex Brill at conservative think tank the American Enterprise Institute concluded that this will amount to “a de facto” reimbursement policy of 4.3 percent, a “sneaky” victory, he told The Daily Caller News Foundation.

Brill told TheDCNF that in the Medicare sequester, “Democrats won a battle they have been waging against the drug industry and have effectively cut reimbursement for Part B drugs.”

Lawmakers asked Tavenner to “ensure a potential sequester cut is applied to just the 6 percent service payment and not to the underlying fixed drug cost.”

Texas Republican Rep. Michael Burgess questioned whether Tavenner could authorize these cuts and demanded that CMS “explain the legal authority it used in applying sequestration to Medicare Part B drug reimbursement in the oncology space since the Medicare Modernization Act of 2003 determines that reimbursement in statute.”

Burgess called CMS’ interpretation “a seemingly basic misunderstanding of math” and asked “why CMS did not take the impact to patients and health care providers into account in exercising available flexibility.” Tavenner told the lawmakers that because the sequester did not explicitly exempt Medicare Part B drug payments, she had no other options.

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