Cancer clinics are turning away thousands of Medicare patients. Blame the sequester.

[Yo_Mama]

30. It's explained in the article

The cancer doctors have to pay money for the drugs up front. For Medicare patients, they are allowed 6% writeup on the drug. Their administration fees are very little.

Well, there is always some loss and wastage, and cutting their 6% margin by 2% is actually cutting their reimbursement more like 30%. But they still have overhead costs for these patients, so now they will have to either spend their own money to treat these patients, or stop treating them.

How long any particular clinic can continue really depends on how much of a bank loan they have to cover the interval between buying the drug and getting paid back by Medicare. Those loans cost money. If they are using their own money they can continue longer, and if they don't treat many Medicare patients they can continue a lot longer, even if they are losing money on those patients.

This is very sad, but remember that SGR was supposed to cut fees by not 2%, but by more than 27%. And when I tried to explain to DU'ers that this would result in denial of treatment to Medicare patients, the majority response was just to cuss out the doctors.

For what it's worth, future scheduled Medicare cuts aren't going to be sustainable for these clinics either. Some of the rural hospitals get special higher reimbursements, and they may be able to keep going with these treatments. But there isn't the capacity in urban hospitals to take over the clinic roles, and there isn't enough of a margin in Medicare to fund expansion in hospital treatment centers. And there have been proposals to cut some of the special provisions for rural hospitals.