Return of Rule Nixing Delivery of Rx Drugs to Medicare Patients Drawing Docs’ Ire

Community oncologists are up in arms about a little-known consequence of the end of the COVID-19 public health emergency (PHE): the return of a rule barring them from mailing or home-delivering chemotherapy drugs to their Medicare patients.

The rule comes from a nine-page Frequently Asked Questions (FAQ) document published in September 2021 on the federal law against physician self-referral, commonly known as the “Stark law” after its sponsor, former representative Fortney H. “Pete” Stark (D-Calif.). The Stark law bars physicians from referring Medicare patients to labs or services in which the physician has a financial self-interest.

The law exempts certain items, such as intravenous drugs, that are furnished to the patient in the physician’s office. The last question in the document asks about drugs, devices, or other items furnished to patients outside the physician’s office building. “The ‘location requirement’ requires that the patient receive the item in the physician’s office,” the Centers for Medicare & Medicaid Services (CMS) says in its response.

Satisfying the ‘Location Requirement’

“The ‘location requirement’ would not be satisfied if a patient receives an item by mail outside the physician’s office, as it would not be dispensed to the patient in the office,” the FAQ continued. “This is true regardless of whether Medicare coverage and payment rules would permit the supplier to mail the item to the patient and bill the Medicare program for the item.”

But the rule — which also applies to oral chemotherapy drugs — was suspended during the COVID PHE, which ended on May 11. A month before the PHE drew to a close, the Community Oncology Alliance (COA) wrote to HHS Secretary Xavier Becerra asking him to rescind that portion of the FAQ.

“CMS, which has been unresponsive to this issue brought to it by Congress and other medical specialties, puts medical practices in an untenable position,” COA president Miriam Atkins, MD, and COA executive director Ted Okon wrote in the April 4 letter.

“Worse yet, it is endangering the lives of the oldest and sickest Americans, especially those in rural areas, who often cannot get to the medical practice to personally pick up their drugs, either due to complications of their illness or not having access to transportation,” the letter continued. “We are especially concerned that those patients without regular access to transportation will be disadvantaged and could face disruptions in their cancer treatments. This CMS decision will most likely worsen health disparities in cancer care given that those with the least means of affording transportation will be the most impacted.”

‘Bizarre’

“The only word to describe it is bizarre,” Okon said in a phone interview. “Why did it come up when it came up? And how can you think about this being a Stark violation? Now, if indeed CMS believes that is a Stark violation, this is so important that it should have rulemaking” instead of just putting it into an FAQ without any stakeholder buy-in, he said.

“It also comes at a time when President Biden issued an executive order on modernizing the rulemaking process and making sure that stakeholders who are impacted have a say in what that proposed rule is,” Okon added. “Well, this is a classic example.” It’s also not financially lucrative for oncology practices, because it costs them money to send the medications via mail or UPS, or have them delivered via courier, he said.

Yen Nguyen, executive director of pharmacy at Oncology Consultants, a practice with 22 oncologists and 20 nurse practitioners in the Houston area, said in a phone interview that the rule would hit some patients especially hard.

“If our patients can’t drive in to pick up their medications, or if we can’t deliver medications to patients, we have to send the prescription out to a specialty pharmacy,” she explained. But specialty pharmacies typically fill prescriptions for 3 months at a time, while “we fill 1 month at a time, because cancer treatment changes all the time.”

This can result in a lot of wasted medication, she continued. For example, the cancer drug ibrutinib (Imbruvica) “costs about $20,000 per month, or $60,000 for 3 months,” said Nguyen. “If the patient progresses after the first month, you have a wastage of $40,000 … The catastrophic wastage of Medicare money is immense.”

Before the FAQ, “we were able to help the patient by sending drugs via a courier,” Nguyen said, adding that the Stark law came out when most chemotherapy drugs were given intravenously and oral drugs were less common. With an oral medication, “how do you define what is the [location] of dispensing? Does the dispensing occur when the pharmacy dispenses the medication in the doctor’s office? Or is defined as when the courier hands a prescription to the patient?”

“I’ve been wondering: at what dinner did CMS sit down with specialty pharmacy to come out with this?” she said.

Congress Members Concerned

Rep. Diana Harshbarger (R-Tenn.), a member of the House Energy & Commerce Health Subcommittee, brought up the issue during a March 29 committee hearing on the HHS budget. The rule “is extremely disruptive to cancer care,” she said to Becerra. “Do I have your commitment to work with me and other concerned members in Congress to resolve this issue?”

“Absolutely; you have my commitment,” he replied.

A spokesman for Rep. Harshbarger confirmed that the congresswoman — along with 53 other Republican and Democratic members of Congress — sent a letter to CMS on the topic, which Harshbarger had said during the hearing that she would do. But the agency said there was nothing that could be done, the spokesman said.

“It is incredibly disappointing that CMS will not make concessions to provide relief to cancer patients,” Harshbarger said in an email to MedPage Today. “In the past, CMS has provided for flexibility to ensure patients receive care, yet does not believe it is appropriate to take action in this instance. My colleagues and I will explore legislative options to make sure that patients have access to life-saving treatment.”

Asked to comment on the issue, a CMS spokesperson said in an email that “CMS is committed to ensuring beneficiaries’ access to their prescription drugs, and we do not anticipate any access issues in returning to the longstanding policy that was in place before the COVID-19 PHE. CMS will closely monitor patient complaints to watch for any issues affecting patient access.”

The “longstanding policy” is the one that requires outpatient clinicians to deliver all drugs and services to patients in the clinician’s office in order to be reimbursed by Medicare.

Now that the PHE has ended, “physician practices that wish to mail or deliver Part D drugs to beneficiaries’ homes would need to satisfy all requirements of an applicable exception to the physician self-referral law other than the in-office ancillary services exception. Any changes to the regulatory exceptions to the physician self-referral law would need to be made through notice and comment rulemaking.” The spokesperson did not specify what those requirements are.

Despite the waiver coming to an end, “Medicare beneficiaries will still be able to get the outpatient prescription drugs they need through their Part D plans’ networks of mail-order and other pharmacies,” the CMS spokesperson wrote. “The Medicare Part D program is robust, and Part D sponsors must have a contracted pharmacy network consisting of retail pharmacies sufficient to ensure that beneficiaries enrolled in Part D plans have convenient access to network pharmacies.”