Cancer clinics across the country have begun turning away thousands of Medicare patients and blaming the sequester budget cuts.
Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.
Patients at these clinics would need to seek treatment elsewhere, but the only real alternatives are hospitals, which generally offer more expensive care and which may not be equipped to handle the influx.
"If we treated the patients receiving the most expensive drugs, we'd be out of business in six months to a year," said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. "The drugs we're going to lose money on, we're not going to administer right now."
After an emergency meeting Tuesday, Vacirca's clinics decided they would no longer see one-third of their 16,000 Medicare patients.
"A lot of us are in disbelief that this is happening," he said. "It's a choice between seeing these patients and staying in business."
The impact of the sequester on cancer treatment has only recently become clear, adding an unintended consequence to a budget process that was already controversial for its blind, across-the-board cuts.
Some who have been pushing the federal government to spend less on health care say this is not the right approach.
"I don't think there was an intention to disrupt care or move it into a more expensive setting," said Cathy Schoen, senior vice president of the Commonwealth Fund, which recently released a plan for cutting $2 trillion in health spending. "If that's the case, we're being a penny-wise and a pound-foolish with these cuts."
Legislators meant to partially shield Medicare from the sequester, limiting the program to a 2 percent reduction - a fraction of the cuts seen by other federal programs.
But oncologists say the cut is damaging for cancer patients because of the way those treatments are covered.
Medications for seniors are usually covered under the optional Medicare Part D, which includes large private insurers that are absorbing the cuts. But because cancer drugs must be administered by a physician, they are among a handful of medications paid for by Part B, which covers doctor visits.
The federal government typically pays oncologists in community clinics for the average sales price of a chemotherapy drug, plus 6 percent to cover the cost of storing and administering it.
Since oncologists cannot change the drug prices, they argue that the entire 2 percent cut will have to come out of that 6 percent overhead. That would make it akin to a double-digit pay cut.
"If you get cut on the service side, you can either absorb it or make do with fewer nurses," said Ted Okon, director of the Community Oncology Alliance, which advocates for hundreds of cancer clinics nationwide. "This is a drug that we're purchasing. The costs don't change, and you can't do without it. There isn't really wiggle room."
Okon's group has sent letters to legislators urging them to exempt cancer drugs from the sequester or, as a backup, only shave 2 percent off the money they receive to administer the medications.