Evidence-Based Oncology
February 2015
Volume 21
Issue SP3

Reality Meets ASCO's Policy Statement on Medicaid Reform


Recently, the American Society of Clinical Oncology (ASCO) published a policy statement on Medicaid reform. The verbatim principles guiding the ASCO Medicaid statement are as follows:

1. No individual diagnosed with cancer should be without health insurance that guarantees access to high-quality cancer care delivered by a cancer specialist.

2. Patients with cancer who have Medicaid should receive the same timely and high-quality cancer care as patients with private insurance.

3. Medicaid payments should be sufficient to ensure that Medicaid patients can have access to quality cancer care.

4. Patients with cancer who have Medicaid should not face insurance barriers to clinical trial participation.1

On the surface, these principles are admirable. Certainly in this country, especially with world- renowned cancer institutions, no person with cancer should go untreated. Americans of all means should have access to high-quality, accessible, and affordable cancer care. The problem is that the specific ASCO policy recommendations look great on paper but seem unrealistic when one considers their likely implementation and political challenges.


Before focusing on specific aspects of the ASCO policy recommendations, it’s important to note a glaring shortcoming of the ASCO approach to Medicaid reform: failure to at least mention education on cancer prevention. Although one recommendation calls for removal of barriers to “cancer screening and diagnostic follow-up,” which would presumably help in detecting earlystage new or recurrent cancers, prevention has not been addressed. Obviously, in view of estimates that half of cancer cases are preventable,2 we need a more focused, more realistic effort at prevention education. Although not very beneficial for those who need treatment now, the lack of a forward-looking approach to preventing cancer will overwhelm us. We need a fair balance between cancer’s demand and supply sides—in other words, we must look for unique, innovative ways of lowering the demand for cancer care by reducing the number of new cases rather than focus all our efforts on treatment (the supply side). It is vital that we introduce into the Medicaid program, as well as into all other sources of insurance, education on the personal health responsibility of current beneficiaries, their children, and the generations to come. Admittedly, this is a longer-term fix, but one that must be incorporated into Medicaid reform, because the demand for cancer care services will outstrip the supply of cancer care—especially high-quality, affordable, and accessible cancer care.


I believe that Medicaid is the “fool’s gold” of the Affordable Care Act (ACA). The Obama administration can tout the fact that the Act has led to the insuring of more people, but a significant portion of those are insured under the Medicaid expansion program. The problem, which is inherent in several of the ASCO policy recommendations, is that Medicaid is an insurance program crippled by bad economics. In order to maintain the current program, much less expand it (the first ASCO policy recommendation), its cost needs to be reduced. While there will be additional financial pressure going forward with Medicaid expansion, that reduction is currently being achieved in 2 fundamental ways. First is the reimbursement cut for providers, which is why ASCO recommends raising Medicaid rates to match reimbursement rates provided by Medicare. Second, to regulate the cost of care for cancer patients, access to certain treatments, such as oral cancer drugs, is being restricted via formularies and by higher patient co-payments. Another ASCO recommendation is to ensure access to oral and supportive care medications by containing patients’ out-of-pocket expenses and exempting cancer and supportive therapies from patient cost sharing, such as preventive and hospice care services.

The only way to expand Medicaid, or even simply sustain it, is to cut costs by reducing what providers are paid for treating patients covered by Medicaid and restrict the type of cancer care patients receive under Medicaid. The ASCO recommendation of raising Medicaid provider reimbursement to match that of Medicare is not a solution, because Medicare is following the downward spiral of Medicaid. Community oncology practices, where the majority of cancer care is still provided, are buckling under the ratcheting down of Medicare payment rates, made worse in 2013 by the Medicare sequestration payment cut. Many community oncology practices struggle as they treat Medicaid patients at unrealistically low reimbursement rates, but the same is becoming true with Medicare patients. As reported by our organization, the Community Oncology Alliance, 331 community oncology practices have closed treatment facilities over the past 8 years, primarily in rural areas, and 544 practices have merged or financially affiliated with hospitals over the same time period.3 The end result of this shifting landscape of cancer care is issues with access to care for patients and higher costs associated with hospital-based cancer care. It is ironic that this shifting landscape has aggravated the Medicaid problem.

Although many of the ASCO recommendations are, superficially, paper fixes to the Medicaid problem, they are simply dead on arrival. That is because it would be up to Congress to find the funding to increase Medicaid payment rates for cancer care, eliminate patient cost sharing, and provide other services such as cancer screening and genetic testing. The reality is that the new Republican-controlled Congress is dealing with a strategy of limiting or curtailing the ACA, not fueling the expansion of Medicaid. Additionally, the way the Congressional Budget Office (CBO) “scores,” or economically forecasts, the impact of legislation is amazingly antiquated and myopic. CBO simply looks at costs and not at how higher costs—such as increasing Medicaid payment rates—may actually lead to lower expenditures for Medicaid patients over time. Although some in the current Congress want CBO to introduce so-called “dynamic scoring” in the legislative process, it is not yet a reality.


One of the intriguing ASCO recommendations is actually separate, in a way, from the Medicaid program. It is interesting that changes years ago to the Medicaid program dealing with the requirement of pharmaceutical manufactures to provide best pricing on their drugs gave birth to the 340B drug discount program. The original intent, clearly, was to ensure that patients who were in need but did not qualify for Medicaid did not fall through the “treatment cracks.” The 340B program provided safety net hospitals, community health clinics, and other specific providers with deep discounts on pharmaceuticals. The numbers indicating how much the program has grown since its inception are staggering, especially among the roughly one-third of hospitals in this country that are eligible for 340B discounts, which translates into upwards of 100% net profit margins on expensive cancer drugs. The problem is that whereas community health clinics, Ryan White HIV/AIDS grantees, and other critical access providers have strict requirements to associate 340B drug discounts with patients in need, hospitals do not.

ASCO recommends that the 340B program be changed so that it is used for its original intent: “To incentivize care for the uninsured and underinsured and Medicaid patients, regardless of care settings.” That is intriguing because a possible solution to the Medicaid problem is to to create a safety net by fixing the 340B program rather than expand a broken program. This would require that the benefits of the 340B program be more directly associated with patients in need of cancer drugs than with hospitals. Regardless of where patients in need are treated—community cancer clinics or outpatient hospital facilities—they would have access to 340B discounted drugs, which would also lower patient cost sharing. In its current state, patients derive no financial benefit from the 340B program, and, in fact, as cancer care moves to the hospital setting, numerous studies indicate increased patient costs.

Hospitals that are good stewards of the 340B program, and recognize uninsured and underinsured cancer patients in need, would presumably welcome changes to the critical 340B program to strengthen it and ensure its economic viability. However, the reality is that institutions that derive financial benefit from the hugely profitable 340B program will fight this intriguing ASCO recommendation.


ASCO provides a series of specific recommendations relating to introducing medical homes into the Medicaid program for cancer care. Once again, most of these are meant to simply increase reimbursement for important aspects of cancer care. Although well intended, they are not grounded in the reality of the current Congressional and federal budgeting and legislative process. However, I believe there is merit in introducing the oncology medical home into the fabric of the Medicaid program. Community oncology practices, alongside private insurance payers, have been developing and implementing oncology medical home pilots with early results that are very promising—improving the quality of cancer care while lowering costs. Barbara L. McAneny, MD, has been very successful with the first Medicare-related oncology medical home (OMH), the COME Home project, which is funded by a federal grant from the Centers for Medicare & Medicaid Innovation (CMMI). Recently, US Representative Cathy McMorris Rogers (R-WA) sent out a draft of legislation that would create a national OMH demonstration project or Medicare.4 This is in addition to the currently circulating conceptual outline from CMMI about an oncology payment reform project that is, in reality, an OMH. There is no reason why the OMH concept cannot be incorporated into Medicaid in order to enhance the quality of care while managing costs. What it will take is for state Medicaid programs to think out of the box, just as private payers and now Medicare are doing, to effectively tackle payment challenges in cancer care.


I believe that any serious reform to Medicaid with respect to cancer care must be grounded in the reality of today’s political environment in Washington. Simply recommending increases in provider payments and patient benefits, while a policy I strongly agree with, is unrealistic, especially while calling for an expansion of Medicaid. However, it will take innovative approaches to Medicaid, such as introducing the OMH to save the program and make it viable for cancer patients. Additionally, preventing cancer patients in need from falling through the treatment cracks by looking outside the Medicaid program to make the 340B program a true patient safety net, regardless of where cancer patients are treated, is a very promising ASCO policy recommendation.


Ted Okon is the executive director of Community Oncology Alliance.

1. Polite BN, Griggs JJ, Moy B, et al. American Society of Clinical Oncology policy statement on Medicaid reform. J Clin Oncol. 2014;32(36):4162-4167.

2. Stewart BW, Wild CP, eds. World Cancer Report 2014. Lyon, France: International Agency for Research on Cancer; 2014. Accessed January 20, 2015.

3. The changing landscape of cancer care. Community oncology practice impact report. Community Oncology Alliance website. http://www.communityoncology. org/pdfs/Community_Oncology_Practice_Impact_Report_10-21-14F.pdf. Published October 21, 2014. Accessed January 20, 2015.

4. Discussion draft on establishing an oncology medical home project under Medicare. Community Oncology Alliance website. Home_Discussion_Draft_12-9-14.pdf. Accessed January 20, 2015.

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