The Plight of the Community Oncology Medicare Patient

Introduction

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (hereinafter referred to as “the MMA”) was enacted into legislation in 2003 for the purpose of decreasing Medicare expenses because of existing and ever-increasing Medicare budgetary shortfalls. In decreasing Medicare expenses, the MMA specifically targeted oncology pharmaceutical reimbursement by imposing reductions on physician reimbursement by tens of billions of dollars. The initial billion dollar reductions were supposed to take place over a period of five years. However, what actually occurred was these reductions taking place in year one with even more reductions taking place in years two through five.

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While not all agree, the implementation of these reductions has directly affected accessibility and quality of care in oncology for the Medicare patient primarily in the community oncology arena. Examples of which include, oncologists opting for early retirement, the closing of rural oncology practices, and larger regional practices closing their outreach clinics. These closings force cancer patients to commute in upwards of 90 miles to over 120 miles away from their homes, often times multiple days a week, for cancer treatment. Furthermore, community oncologists must choose regimens that avoid financial loss, and not necessarily those that are the most effective, or the least toxic for the patient. Many of these physicians simply cannot accept Medicare patients who do not also have secondary insurance because of these reimbursement shortfalls. Where do these patients go? Many go without care, obtain treatment too late because they are shuffled around, and/or are relegated to indigent care clinics.

The MMA therefore has succeeded in saving Medicare money, but in doing so has failed to provide adequate care to those to whom they are responsible. So, other than community oncologists, who really cares? Organizations like the AARP are suspiciously silent on the matter, cancer patients themselves are faced with the prospect of dying and are therefore not likely to become actively involved in ensuring they receive the care and the treatments they deserve, and physicians are hesitant to join together to effectuate legislative change for fear of violating antitrust regulations. With a new presidential administration and changes in the House and the Senate oncologists and their Medicare patients are hopeful that positive change will be forthcoming.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003: Purpose and Intent, Generally

On December 8, 2003, President George W. Bush signed into legislation the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.1 The MMA produced the largest overhaul to the Medicare program since its inception in 1965.2 According to the MMA its purpose is to:

…[t]o provide for a voluntary program for prescription drug coverage under the Medicare Program, to modernize the Medicare Program, to amend the Internal Revenue Code of 1986 to allow a deduction to individuals for amounts contributed to health savings security accounts and health savings accounts, to provide for the disposition of unused health benefits in cafeteria plans and flexible spending arrangements, and for other purposes.3

President Bush, when signing the MMA, reiterated the original purpose of Medicare, implemented under Lyndon Johnson, as the commitment of the nation to provide affordable healthcare to the nation’s elders. The MMA, President Bush claimed, honors this commitment by extending Medicare coverage to include optional prescription drug coverage, which was not previously covered. This, he touted, would extend “modern medical care” to the nation’s much deserving seniors.4 What President Bush failed to state, what Medicare has not been proclaiming to its beneficiaries, and what the media has not been reporting, is that while the MMA may extend to optional outpatient prescription drug benefits, it also severely constricts and compromises Medicare recipients’ access to quality community oncology cancer care.

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The Medicare Prescription Drug, Improvement and Modernization Act of 2003: Purpose and Intent with Respect to Community Oncology Care

A. What is “community oncology care”?

In short, “community oncology care” is all cancer care provided outside of the university setting. Eighty-four percent of all Americans with cancer seek treatment in community cancer clinics.5 Presently, cancer affects one out of every two families, and every day about 1500 people die from some sort of cancer. One out of every two men and one out of every three women will be diagnosed with some form of cancer in their lifetime; this is about 40% of the American population.6 Of Americans over 65 years old, 21% are cancer patients,7 the majority of which require treatment in the community oncology care setting. Because of the MMA, many of these seniors’ cancer treatment regimens and accessibility to care are being jeopardized.

B. Medicare reimbursement before 2003

Before the MMA, Medicare reimbursed physicians for chemotherapy drug purchases at 95% of the Average Wholesale Price (AWP). The AWP is the wholesale price paid by the physician to the distributor. During this time, oncologists were able to purchase many chemotherapy drugs far below the wholesale rate, which allowed oncologists to realize a relatively substantial profit margin. This profit margin, in turn, allowed oncologists to offset bathe d patient debt, as well as to offset Medicare under-reimbursement of the costs associated with pharmaceutical procurement, storage, and drug administration. Additionally, this allowed physicians to spend quality one on one time with their Medicare patients and families rendering treatment planning, case management, and patient and family counseling, despite the fact that Medicare did not reimburse for these services.8 Medicare, strained by their budgetary shortfalls, and believing oncologists were making too much money, targeted community oncologists for drastic reimbursement reductions.

C. Reductions in chemotherapy reimbursement

1. The MMA Sections 303 and 304

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Failing to take into consideration that the profit margins oncologists were able to realize on drug acquisitions were being utilized to cover Medicare non-reimbursable and under-reimbursed services, some members of Congress were convinced that oncologists were being significantly over-reimbursed to the detriment of the Medicare program. To curtail that “over-payment,” and align reimbursement more closely with actual drug acquisition costs, Part B Sections 303 and 304 were added to the MMA. Sections 303 and 304 of the MMA drastically amended the Medicare reimbursement structure for infusion drugs and biologicals.9 Chemotherapy drugs fall into this classification, and accordingly oncology care at the community level, and particularly in underserved and rural areas were the most affected, with their Medicare patients being the indirect recipient of these changes.

These two sections of Part B essentially provided for the reduction in reimbursement from the previous 95% of the AWP to 85% of AWP beginning in 2004. This was a relatively insignificant reduction, and oncologists were still able to purchase many drugs below wholesale rates. In 2005, however, the reimbursement methodology was significantly altered. Instead of paying a percentage of the wholesale rate (the rate oncologists purchased from distributors), the reimbursement was changed to be a percentage of the Manufacturer’s Reported Average Sales Price (ASP).10 This is the rate at which the pharmaceutical manufacturers sell to their distributors. The chosen rate was determined to be 106% of the ASP, more commonly referred to as ASP+6%. The ASP is defined as “the weighted average of all non-federal sales to wholesalers and is net of chargebacks, discounts, rebates, and other benefits tied to the purchase of the drug product, whether it is paid to the wholesaler or the retailer.”11 Under the MMA, pharmaceutical manufacturers are required, every quarter, to report their average sales prices on the drugs for that quarter. Medicare, in turn, takes that report and bases its physician reimbursement on it at 106% the following quarter. Beginning at the end of the last quarter in 2004, the pharmaceutical manufacturers reported their average sale prices to their distributors, and in the first quarter of 2005, Medicare began reimbursing oncologists at 106% of those average prices.12 This formula was implemented with apparent disregard to the interim mark-up on the pharmaceutical manufacturers’ price lists by the distributors.

Needless to say, the 6% reimbursement to oncologists is generally marginalized by, not only the distributors’ shares but also by the 2% prompt pay discount that is built into the 6% reimbursement. The prompt pay discount is the discount the distributor receives from the manufacturers for remitting their payments promptly (however each manufacturer defines “prompt”). Because this discount is “built” into the 6%, oncologists are in actuality not truly being reimbursed at ASP+6%. Additionally, the lag-time between the manufacturers’ end-of-quarter reporting and Medicare’s next-quarter reimbursements creates a supply and demand cycle that routinely leaves the oncologists under-reimbursed on most drugs by 30% to 60%. Essentially, what is occurring is that when the manufacturers increase their drug prices, after the reported quarter but before the next quarter, and then the distributors also increase their prices, which they would need to do to achieve a profit, by the time the drugs are sold to the oncologists, the costs to the oncologists are more than Medicare will reimburse. “Put bluntly, Medicare has positioned itself to force community oncology physicians to subsidize Medicare with the difference in reimbursement for potentially six months, sometimes longer.”13 Community oncology care providers are not in a financial position to subsidize their Medicare patients’ care.

In a half-hearted attempt to ease the transition between the AWP and ASP reimbursement methodologies, for the year 2005 only, Medicare increased payment for the actual administration of cancer drugs by 32%.14 Additionally, Medicare provided nominal reimbursement for physicians who participated in the 2005 and 2006 Demonstration Projects. The 2005 Demonstration Project addressed certain aspects of quality cancer care by evaluating the side effects of chemotherapy and adherence to clinical guidelines. The 2006 Demonstration Project evaluated physician services relative to various visit levels, the purpose of patient visits, the state of patients’ diseases, and physicians’ adherence to clinical practice guidelines as established by the American Society of Clinical Oncologists (ASCO) and the National Comprehensive Cancer Network (NCCN), with the focus centering on thirteen different disease types.15 Both of these Demonstration Projects expired at the end of their respective years, leaving community oncologists scrambling to exists within the restraints of ASP +6%.

2. The Medicare Improvement for Providers and Physicians Act of 2008

Beginning in 2009, physicians of all specialties were set to receive a 10.6% in Medicare reimbursement for physician services. To forestall this reduction Congress passed the Medicare Improvement for Providers and Patients Act of 2008 (the MIPPA). President Bush vetoed this legislation, but Congress successfully overrode the veto, in October 2008. The MIPPA, however, is only a temporary stopgap. In 2010, physicians will be faced with a 21% overall reduction in Medicare reimbursement for physician services, barring a significant overhaul to the Medicare program. Despite the stopgap of the MIPPA, community oncologists will still realize a 1% reduction in oncology services.16

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Adverse Effects on Community Oncology Care Providers and Their Medicare Cancer Patients

A. Community oncologists are being compromised by the MMA

The experience of the severe reduction in Medicare reimbursement for oncology care may be explained in part by the disparity between what was intended by Congress, and what has been implemented under the MMA.17 In 2003, the Congressional Budget Office projected that the modified reimbursement methodology would result in a total of $4.2 billion reductions in Medicare payments between 2004 and 2013. However, Price Waterhouse Coopers (PWC) estimated, based on actual current data that in actuality the reduction in Medicare reimbursement would be $14.7 billion for the same time period. 18 PWC’s estimations appear to be consistent with the Medicare reduction in reimbursement experienced by oncologists. Since the MMA’s implementation in 2004, many community oncologists have experienced a 30% to 60% loss on many of the pharmaceuticals required to provide quality chemotherapy treatment, a 25% reduction in drug administration services, and zero reimbursements for costs associated with patient and family counseling, treatment planning, pharmacy facilities, etc.19

The Medicare Payment Advisory Commission, (MedPac), an independent Congressional agency established to advise Congress on the plethora of issues that affect Medicare, reported in January 2006, that at the beginning of 2005 it appeared as though [oncology] practices were still able to acquire pharmaceuticals at prices below Medicare’s reimbursement rate.20 MedPac failed to qualify this finding with the fact that during 2005 participating physicians were being compensated for the 2005 Demonstration Projects, as well as the drug administration reimbursement increase of 35%. At the same time, however, MedPac reported that oncology practices were spending more time “shopping” and comparing drug company prices, and then making acquisition decisions based on those comparisons, reducing the amount of drug inventory they kept on hand at any one time. Because the distributors change their drug prices nearly daily, many community oncology practices are forced to comparison shop and purchase only what they know they will need the following week.21 MedPac noted that many oncology practices reduced staff and/or staff hours and benefits, and were outsourcing certain tasks. Finally, MedPAC reported that many Medicare patients who did not also have supplemental coverage were being redirected to hospitals for chemotherapy treatment and that some oncologists reported the possibility of losing their rural satellite offices. This ultimately would require those rural Medicare cancer patients to either obtain treatment at the hospital or commute to larger metropolitan areas for their cancer care.22

Since MedPac’s 2005 report, the effects of the MMA have continued to take a toll on many community oncologists, particularly those in private practice, and those in underserved and rural areas. According to a 2008 study conducted by National Analysts Worldwide, “74% of oncologists believe the rising costs [of cancer care] will eventually exceed society’s collective ability to pay for optimal oncology care.”23 The study found that oncologists are currently and increasingly taking patients’ insurance coverage, or lack thereof, into consideration when making treatment option presentations. Presently, about 44% of Medicare cancer patients, as compared to about 35% of those patients with private health insurance, are having conversations with their oncologist dealing directly with treatment options that are, or are not, fully reimbursable by Medicare, or the private insurer, as the case may be.24 Economic concerns are natural, considering the cost of cancer care. For example, in 2006 Avastin, a common chemotherapy infusion cancer drug cost as much as $50,000.00 a year.25 Oncologists are expected to bear the financial burden fronting the costs of drugs like Avastin, and then somehow absorb the losses incurred on the back end due to under-reimbursement, and bad debt incurred by the patient’s inability to pay for their co-insurance.26

An article released in the Los Angeles Times on November 8, 2008, reported that physicians in California, Nevada, and Hawaii, are owed millions of dollars by Medicare.27 For example, Dr. Tim Ganey, an oncologist with a specialty clinic in California is owed over $750,000.00 in unpaid Medicare claims. This has caused cash-flow problems to the point where the pharmaceutical companies are refusing to deliver to him. As a result, Dr. Ganey is faced with the choice of taking out additional personal loans or sending his Medicare patients to the hospital. Other physicians feeling the cash-flow crunch from Medicare’s reimbursement delays include other healthcare specialties, such as cardiologists, family practitioners, surgeons, etc. The Los Angeles Times reported that oncologists and other physicians with a high population of Medicare patients are defaulting on rents, downsizing, and even closing their offices until they get paid. Representative Henry Waxman (D-Beverly Hills) lamented, “[T]he delay in payments threatens to compromise [Medicare] patient care and provider solvency.” It is anticipated that the delays in reimbursement will be resolved by the end of 2008. 28

The Community Oncology Alliance (COA), the leading advocate for community oncology care providers and their Medicare cancer patients, has received adverse reports from “over 175 [oncology] clinics in 37 states.”29 Oncologists are reporting that the changes in Medicare’s reimbursement for chemotherapy drugs are having negative impacts on their ability to provide quality cancer care. Some oncology practices have reduced staff, benefits, ancillary services, and office space, while others have been forced to close their doors. As many as 73% of oncologists, to date, in private practice are sending increasing numbers of their Medicare patients to hospitals to receive IV therapies that are under-reimbursed.30 Consequently, many hospitals are simply not set up to treat cancer patients. Lacking qualified nursing staff, appropriate infusion facilities, or the desire to shoulder the liability and financial burden, some community hospitals refuse to assist the community oncologist or their patients. Sending patients elsewhere for treatment compromises the patient’s care and “…results in disjointed care that leads to mistakes, duplication, and inferior treatment…[particularly for them] 25% of the nation’s Medicare cancer patients with no or inadequate secondary insurance.”31 Additionally, treatment in the hospitals places additional burdens on Medicare cancer patients because oftentimes traveling to the nearest accepting hospital is further away than their oncologist’s office.32 This burden may be extended to the Medicare patient’s family member(s), who take off from work to provide transportation assistance. Traveling to the nearest willing hospital may be the Medicare cancer patient’s only option. Approximately 28% of oncologists anticipate that they simply will not be able to financially afford to continue accepting Medicare patients who do not have supplemental coverage.33 “I don’t know of any community oncologist in private practice that is still accepting Medicare patients who do not also have supplemental coverage,”34 one Louisiana oncologist reflected.

Until recently, many oncologists anticipated being able to cover the losses incurred by treating Medicare patients by seeing a certain number of patients with private insurance coverage, because traditionally, private insurance companies based their reimbursement structure on “established price lists that were discounted off of the AWP.”35 However, private insurance companies are beginning to trend towards using Medicare’s reimbursement methodologies as the basis by which they set their reimbursement rates. This will in effect serve only to “further exacerbate patients’ access to quality cancer care,”36 expanding the problem from just Medicare cancer patients to all cancer patients regardless of the insurance coverage type.

While there are those oncologists who have closed their doors and opted for early retirements, or a different career path altogether, there are others who cannot afford to retire yet, or who do not feel qualified to do anything else. Many of these oncologists have sought refuge in larger medical groups located in more populated areas. The number of oncologists in larger practices and/or group settings has increased in just the past few years. Larger practice groups may be able to facilitate increased patient flow, but seeing more patients is not the solution to oncologists’ economic dilemma. Increasing the number of patients an oncologist sees in a day necessitates decreased individualized face time with their cancer patients.37 Further compounding the problem of decreased patient/physician interaction time is the increasing administrative demands on the doctor. Sixty-nine percent of oncologists complain that the burden of seeking pre-authorization further restricts the time they can spend with their patients.38

Increased patient volume does not allow oncologists to provide the level of care that their cancer patients deserve; nor does a revolving door of patients necessarily yield higher profits. In its Third Annual Office-Based Oncology Benchmarking Survey, Onmark, “a national group purchasing organization for community-based oncology practices, and a McKesson Specialty company,”39 revealed that oncologists, for the second year in a row, are seeing more cancer patients, but the profits generated declined per oncologist. John Akscin, the vice president of government relations for McKesson Specialty, stated,

Prior to Medicare’s move to base reimbursement amounts on average sales price (ASP) rather than average wholesale price (AWP), many oncologists could shift dollars, as necessary, to pay for care and materials that were not otherwise covered. With the new reimbursement structure, physicians must pay more attention to their business, seeking to streamline operations, leverage the use of technology and improve efficiency – all while ensuring quality patient care.40

It may well be that many oncologists will continue to see an increase in patient volume when they would prefer to spend more time with each patient, ensuring needs are met and focusing on providing quality care. The population of baby boomers are aging and with them an increased incidence of cancer. At the same time, the number of fellows completing training to become medical oncologists is decreasing, and over half of current practicing oncologists are over 50 years old. It is projected that by the year 2020 the shortfall of oncologists will be between 2,550 and 4,880 by 2020, while the demand for oncology care visits will have increased by about 50%.41

The current Medicare reimbursement structure implemented under the MMA fails to incentivize physicians to provide quality cancer care to rural and underserved areas or to provide individualized patient care. Instead, oncologists are incentivized to leave outer-lying communities for more populated metropolises and develop a revolving door of patient volume. These incentives compromise accessibility to quality cancer for Medicare patients. Further, the MMA reimbursement structure dictates sub-optimal treatment regimens by making it financially impossible for oncologists to procure and administer the best drugs necessary to provide quality care. Therefore, the MMA reimbursement structure imposed on oncologists serves to compromise oncologists’ ability to provide accessible, quality cancer care in the community oncology setting.

B. Unintended consequences trickle down to community oncology Medicare patients

The adverse effects of the MMA reimbursement modification imposed on oncologists have trickled down to community oncology Medicare patients resulting in additional unintended consequences to these patients, and they are the ones suffering the most.42 Plan B Medicare beneficiaries must pay a sliding scale monthly premium currently set between $96.40 and $238.40, depending on income, as well as meet a set annual deductible, currently set at approximately $131.00. These amounts are likely to increase in future years. Medicare beneficiaries who do not also have supplemental coverage must additionally pay a 20% co-insurance of the Medicare allowable costs for Part B services.43 For cancer patients, this means covering 20% of their cancer care, including the costs associated with their chemotherapy treatments.

The skyrocketing cost of cancer treatment combined with the out-of-pocket expenses and monthly premiums are causing some Medicare cancer patients to forego recommended cancer care. One such Medicare cancer patient, a resident of Connecticut, was undergoing treatment at the time the MMA went into effect. Before the MMA, Medicare reimbursements were sufficient to cover bad patient debt; this is no longer the case. Because this patient was unable to make her co-payments, she was costing her oncologist over $10,000.00 per year in bad patient debt. Consequently, her oncologist referred her to the local hospital for her continued chemotherapy treatment. Ultimately, the patient suffered complications necessitating hospitalization because the hospital nursing staff responsible for administering her chemotherapy was neither trained nor experienced in oncology, and failed to adhere to the patient’s oncologists’ office’s instructions.44 Another Connecticut resident Medicare patient diagnosed with cancer did not have supplemental insurance, and could not afford her 20% co-insurance. Medicare’s reimbursement of ASP+6% for chemotherapy was insufficient to cover the cost of her oncologist’s recommended treatment regimen. The oncologist referred her to the local hospital for the continuation of care, but because she believed that the nursing staff, who were neither trained nor experienced oncology, were not qualified to meet her needs, she refused to go and forewent her cancer treatment altogether.45

Medicare cancer patients such as these two Connecticut residents exist all over the nation and are having comparable experiences. Many are turned away because their oncologist cannot afford to subsidize their care, while others find that the local community oncologist has closed clinic doors for good. Situations such as these forces Medicare patients to choose between traveling as far away as 90 to 120 miles to the nearest treatment center, or foregoing care altogether. According to a Thompson Reuters’ online survey of 1,767 cancer patients, 25% of late-stage [cancer] patients earning under $40,000.00 annually are [foregoing] recommended cancer care.”46 These results are consistent with a 2006 study published in Cancer,47 a journal published for the American Cancer Society.

Likewise, Medicare cancer patients’ accessibility to optimal cancer care is undermined when oncologists are forced to make treatment decisions based on whether or not Medicare will reimburse for the treatment. For example, shortly after Medicare reduced reimbursement for male-hormone blocking drugs used to treat prostate cancer, the Cleveland Clinic conducted a study which showed that castration surgeries among Medicare prostate cancer patients increased, while the use of Lutenizing, a male-hormone blocking drug reduced dramatically.48 Through the adopted reimbursement structure, Medicare is dictating cancer care. In a letter written to his senator, Mr. Stan Klein, a prostate cancer survivor, advocating on behalf of the 2,000,000 men currently with prostate cancer and the 230,000 men who will be diagnosed with prostate cancer this year, argued that Medicare’s reimbursement reduction for male hormone-blocking force drugs strips the treatment decision-making away from the patient and his doctor while compromising the patient’s ability to obtain optimal treatment. Where Medicare prostate cancer patients are forced to choose between castration and cost-prohibitive injections, many men are instead choosing to forego “life-saving treatment and jeopardizing their lives” in the process.49 The MMA’s reimbursement structure de-incentivizes oncologists from treating Medicare cancer patients and encourages Medicare cancer patients to forego cancer care altogether.

C. Duke’s studies provide misleading results

Despite increasing reports from community oncologists and Medicare cancer patients that the MMA is increasingly compromising accessibility to quality cancer care, studies conducted by the Duke Clinical Research Institute suggest otherwise.

In September 2006, Duke Clinic researchers released a study that showed that “[cancer] patients do not perceive barriers to their access to chemotherapy” since the implementation of the MMA. The results of the study are based on 1,421 cancer patient internet survey responses. Of those surveyed, 684 patients received chemotherapy before the MMA was enacted, and 737 patients received chemotherapy after the MMA was implemented. Of the total 1,421 patients surveyed, approximately one-half were over 65 years old. 50 There are inherent flaws with this study, however. For one, Duke fails to indicate how many of the responders were Medicare beneficiaries. Second, there is no indication of how many of the responders received treatment in the community versus university settings, and how many responders resided in rural and underserved areas. This information is vital toperiod determine an accurate picture of the MMA’s impact. In conclusion, Duke researchers conceded that the survey results may be “confounded” by the reimbursements received from the 2005 and 2006 Demonstration Projects that were in effect at the time of the study, because the reimbursements provided to participating oncologists may have “masked” the true effects of the MMA reimbursement changes. Ultimately, Duke researchers recommended additional studies.51 Duke should be able to obtain a more accurate result now that the 2005 and 2005 Demonstration Projects have terminated and oncologists are feeling the full effects of the ASP+6% reimbursement structure. In the future, comparable studies should target the Medicare cancer population specifically, including those with and without supplemental coverage, as well as to compare the perception of cancer care differences between those Medicare patients receiving care in the community oncology setting, including the rural and underserved areas, versus those patients receiving cancer care in the university setting.

In July 2008, the Journal of the American Medical Association (JAMA) released a Duke Clinical Research Institute study, funded by the Global Access Project, which is a collaboration organized by the National Patient Advocate Foundation. In this study, researchers evaluated 5% of a national random sample of Medicare claims submitted between 2003 and 2006 to determine the MMA’s impact on cancer patient wait times and travel distances.52 Researchers estimated that cancer patient wait times (wait times being that period of time between actual diagnosis and beginning treatment) increased only by one or two days, except for those patients residing in rural areas, whose wait times appeared to increase by as much as five days. Patient travel distances, researchers estimated, appeared to have increased by only one or two miles. Researchers concluded that the nominal difference in wait time and travel distance was unlikely to have adverse effects on treatment outcomes, and therefore the MMA has had an insignificant impact on cancer care.53 Oncologists argue that this study is “fraught with flaws.”54 Although the results were released in 2008, the claims that were evaluated were submitted between 2003 and 2006. As previously indicated, the 2004 reimbursement rate was a nominal decrease from that of prior years, and would not have netted any significant adverse effects. While the reimbursement structure was considerably altered from the AWP to the ASP effective 2005, the “buffering” payments from the 2005 Demonstration Project and short-term increase in reimbursement of thirty-five (35%) for drug administration would color the results of the study. The same is true for 2006 where reimbursement was “buffered” by the 2006 Demonstration Project, although the effects of the cuts would begin to take effect in this year. Researchers did concede that actual adverse effects may only be ascertainable after a longer period had passed, and recommended continued monitoring. The results of this 2006 study were published in 2008 presenting a misleading picture of the actual adverse effects that the MMA has been having on oncology care since the conclusion of this study. It is disconcerting to hear Nancy Davenport-Ennis, President and CEO of the National Patient Advocacy Foundation (NPAF) in a press release disseminated in July 2008, state, “We applaud this study and its conclusions”55 because such support further undermines the true struggles community oncology Medicare patients and their oncologists have been facing.

Who Cares?

Despite the large portion of the population that has cancer, or can expect to have cancer, and despite the increasing Medicare population with cancer, this issue has not been given the media attention many believe it deserves. Consequently, until recently little has been done to address the problem through legislative advocacy.

A. Why aren’t community oncology Medicare patients advocating for change?

Should community oncology Medicare patients join together to effectuate legislative change, there is little doubt they would be effective. So why then aren’t they advocating for themselves? One oncologist threw his hands in the air with frustration saying that he has tried repeatedly to get his Medicare patients involved in the MMA issue, but that he just gets blank stares. “The sad truth of the matter is that Medicare cancer patients are overwhelmed with their disease process and the prospect of dying. Many simply do not have the physical, emotional, or psychological ability to call upon Congress and demand an immediate overhaul of the Medicare program.” 56 With the recent reports indicating the increasing numbers of cancer patients foregoing care, it appears as though cancer patients are succumbing to defeat and premature death.

B. Why don’t physicians join together and effectuate legislative change?

Physicians are not going to band together against Medicare to advocate for change, primarily for fear of violating antitrust laws. Under the Sherman Antitrust Act, “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States” is illegal.57 The purpose of antitrust laws is to promote competition. When physicians collude together to negotiate fees and reimbursements with insurers, they are no longer competing with each other. This horizontal, anti-competitive behavior may be deemed a violation of antitrust laws.58 What many physicians may not understand, however, is that the U.S. Constitution protects discussion and advocacy activities concerning legislatively established health care programs like Medicare. Antitrust violations are triggered when these discussions take place with private insurers.59 Unless physicians become actively and legislatively involved in this issue, change may not be immediately forthcoming.

C. Patient and Physicians Advocacy Organizations

There are advocacy organizations dedicated to influencing the legislature on behalf of both Medicare patients and physicians. For example, senior/patient-centered organizations include the National Foundation for Patient Advocacy, the American Cancer Center, and the AARP, to name a few. The adverse effects of the MMA on Medicare cancer patients is not an issue that has been widely embraced by these organizations, largely due to the lack of media coverage and awareness, and erroneous misleading studies such as those published by Duke does little to advance the problem to the forefront. Even so, the AARP, in particular, is one organization that has been instrumental in both advocating for, and more recently against the MMA, generating criticism along the way. Concerning oncology-specific physician advocacy organizations, both the American Society of Clinical Oncologists (ASCO) and the Community Oncology Alliance (COA) have been diligently working to influence legislators to effectuate change. It remains to be seen, however, the level of impact these advocacy organizations will have.

1. The AARP: Medicare Cancer Patient Supporter or Saboteur?

The “AARP is a nonprofit, nonpartisan membership organization for people age 50 and over.”60 As the largest lobbyist for America’s seniors, the AARP touts its mission as being “dedicated to enhancing the quality of life for all…to lead positive social change and deliver values to members through…advocacy and service.”61 One of its advocacy projects included supporting the MMA. According to the results of a two-day poll, the AARP claimed that 75% of its members agreed that the MMA would benefit the lower-income elderly, as well as those with cost-prohibitive prescription drug needs.62

According to a survey commissioned by the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), however, only 18% of AARP members supported the legislation, with 65% demanding that Congress “go back to work.”63 The same survey showed that only 16% of Medicare beneficiaries without prescription benefits supported the legislation.64 Why would the AARP falsify its poll? It may be because the ARRP stood to benefit from the passing of the MMA. Thirty percent of the organization’s income is derived from its insurance-related interest. Critics argued that the AARP’s close ties with the insurance and drug industries create a conflict of interest for its “member’s best interests” advocacy efforts. ”If there was a sublime definition of conflict of interest, it would be AARP from morning to night,” says Alan Simpson, former Republican Senator from Wyoming. At the time the MMA was under consideration, even then-Senate Minority Leader Tom Daschle, and House Minority Leader Nancy Pelosi, agreed that the MMA “[sold] out the interests of senior citizens…[and] undermined Medicare…in favor of drug and insurance companies.”65 Despite these criticisms and member complaints, the AARP defended its position and forged ahead in its agenda.

Five years later, it appears as though the AARP has changed its position on the matter 180 degrees. Concerning the recently passed Medicare Improvement for Providers and Patients Act of 2008 (which temporarily averts the 2009 scheduled 10% reduction in reimbursement for physician services), David Sloane, the AARP’s director of government relations stated, “[E]nactment of this legislation does little to protect millions of Medicare beneficiaries from higher monthly premiums and only temporarily averts the problems beneficiaries would face finding a physician if payment cuts take place.”66 The AARP joined physicians and others to successfully effectuate this legislation. Perhaps the AARP will maintain the course and advocate for a permanent solution as well.

2. The American Society of Clinical Oncologists

ASCO is a non-profit organization dedicated to providing oncology professionals of all specialties with advanced education, advocating for quality cancer care initiatives, and supporting clinical trials. Even before the implementation of the MMA, ASCO’s position was one of supporting the Congressional intent of more closely aligning physician drug reimbursement with actual physician drug acquisition costs. In so doing, ASCO seeks to cooperatively work with “CMS, Congress, and others in the cancer community on legislative or administrative policy solutions to the MMA to ensure that high-quality cancer treatment is available to all people dealing with cancer.”67 Primarily comprised of academicians whose focus is on research and clinical trials data, the realities of the adverse effects of the MMA on private practicing clinical oncologists eludes ASCO and arguably colors the organizations’ ability to effectively advocate. Accordingly, despite ASCO’s cooperative involvement in the legislative process on this issue, and despite Congress’ assurances that ASCO’s recommendations would be taken into consideration, no significant beneficial changes to the program have been made to date.

3. The Community Oncology Alliance

The COA is a relatively new non-profit organization established five years ago specifically to advocate on behalf of community oncology. The organization provides a political action committee (COA PAC), which is the only PAC “affiliated solely with independent community oncology.”68 As part of its legislative efforts, the COA provides an online user-friendly Legislative Action Center which allows anyone to locate his/her legislators and send an email via the site requesting action to be taken on relevant pending legislation. The COA has been instrumental in effectively advocating against reimbursement cuts, and maybe credited with securing some increase in reimbursement (such as in the reimbursements for the 2005 and 2006 Demonstration Projects), as well as having “increased awareness on Capitol Hill about the community cancer care delivery system.”69 The COA is currently engaging with Congress to push through legislation that would alleviate many of the adverse effects of the MMA on community oncologists and Medicare cancer patients.

Looking Ahead and Anticipating Change

With the recent change of the presidential administration, as well as numerous changes in both the House and Senate, the atmosphere is peaked for significant policy modifications. Those in the oncology arena are hopeful that favorable legislation is around the corner. At the same time, the current economic crisis threatens to stymie the budgetary infusion Medicare requires to get the Part B reimbursement structure back in line with physician drug acquisition costs.

A. The Community Cancer Care Preservation Act of 2007

In February 2007, Representative Arthur Davis (AL -7) and 89 cosponsors introduced The Community Cancer Care Preservation Act of 2007 (H.R. 1190). In July 2007, Senators Arlen Specter and Senator Bob Casey introduced the companion bill, S. 1750. The Act addresses the community oncology care reimbursement shortfalls that are compromising Medicare beneficiaries’ access to optimal cancer care. Specifically, the Act provides for reimbursement to be fair and reflective of actual physician acquisition costs, as well as to increase reimbursement for services previously under reimbursed or not reimbursed such as chemotherapy administration, drug storage and management, and treatment planning.70 “Cancer takes a great toll on our friends, family, and our nation,” said Specter in a July 2007 news release. “This legislation recognizes the vital services that oncologists provide through community cancer centers and gives them the assistance necessary to care for cancer patients, particularly those in rural areas,” concurred Casey. As of this date, this legislation has not been voted on.

B. H.R. 3011

On July 12, 2007, Representatives Town, Hall, and Whitfield introduced H.R. 3011 which seeks to amend Part B of the MMA to ensure adequate reimbursement for infusion drugs and biologicals. Under this Bill, reimbursement would be no less than the “widely available market price” for said drug(s) “to physicians after prompt pay discounts.”71 This Bill was sent to the Committee on Energy and Commerce and the Committee on Ways and Mean for consideration. The Bill instructed these changes to take effect on January 1, 2008, but that never occurred.

C. Letter from Members of Congress

While pertinent legislation such as H.R. 3011, and the Community Cancer Preservation Act of 2007 are hanging in the balance, Congressional awareness of the plight of community oncology Medicare patients is increasing. On July 28, 2008, members of Congress sent a letter to Congressional Leadership requesting that language be adopted to exclude prompt pay discounts from the current ASP+6% MMA reimbursement structure. Members of Congress stated that these discounts, which have been included in the ASP+6% reimbursement structure since 2005, “artificially reduces the payment amount to the [physician] and incentivizes inefficient distribution to [physicians’] offices.”72 The modification was requested to become effective in the next legislative session. It remains to be seen whether or not the request will be granted.

D. Projections under President-Elect Barak Obama

In his healthcare plan, President-Elect Obama provides a cancer agenda, that promises increased funding for cancer research, expanding clinical trials, providing accessible, affordable, and quality healthcare for all (via tax credits), eliminating cancer as an uninsurable pre-existing condition, and supporting evidence-based quality improvement interventions, such as pay for performance.73 Obama has also promised to open the doors to purchasing pharmaceuticals from other developed countries, such as Canada and Germany, where the drug prices are regulated by the government. Opening the doors for oncologists to purchase infusion drugs and biologicals from other countries would potentially theoretically obliterate the damage the MMA is doing to oncology care in America. Needless to say, the prospect is very encouraging, but much remains to be seen.

Conclusion

Medicare was originally implemented to ensure that America’s elderly healthcare needs. Sections 303 and 304 of the MMA undermine that purpose by undermining community oncology Medicare patients’ access to quality cancer care. Community oncology care providers are forced to make treatment decisions based on what is reimbursable, as opposed to what will provide an optimal outcome, lest oncologists go into debt and out of business. In the alternative, community oncologists are incentivized to develop a revolving door of patients spending as little time as possible with anyone patient. Medicare patients are dying prematurely due to inaccessibility to care, and/or the inability to cover their own cost of care, leading to increasing numbers of Medicare patients, to forego care altogether. The MMA, therefore, needs to be “re-modernized” to address the resulting adverse effects and embrace the original intent of Medicare.

Bibliography

  • 15 U.S.C. § 1
  • The Medicare Prescription Drug, Improvement and Modernization Act of 2003, PL 108 -173 (HR1) (2003).

The President’s Cancer Panel 2007-2008 Annual Report, Maximizing Our Nation’s Investment: Three Crucial Actions for America’s Health (2008)

Arlen Specter, News Release, Senators Specter and Casey Introduce Community Cancer Preservation Act (2007)

Congresswoman Nancy Johnson, Statement, House Committee on Ways and Means Health Subcommittee (2005)

The Medicare Payment Advisory Commission, Report to Congress: Effects of Medicare Payment Changes on Oncology Services (2006)

The Obama-Biden Plan to Combat Cancer. Web.

  • H.R. 3310, 110th Congress (2007)
  • Arizona v. Maricopa County Medical Society, 457 U.S. 332 (1982)
  • Alisa M. Shea, Lesley H. Curtis, Bradley G. Hammill, Lisa D. DiMartino, Amy P. Abernethy & Kevin A. Schulman, Association Between the Medicare Modernization Act of 2003 and Patient Wait Times and Travel Distance for Chemotherapy, 300 JAMA 2, 189-196 (2008).

Anne B. Clairborne, Matters of Antitrust: Professional Society Communication with Private Payors, 3 J. ONCOL. PRACT. 1, 15-17, (2007)

AARP, About AARP.

American Cancer Society, Cancer Facts and Figures, 2008 Special Section: Insurance and Cost Related Barriers to Healthcare.

American Society of Clinical Oncologists (ASCO), Frequently Asked Questions on the 2006 Demonstration Project.

American Society of Clinical Oncology (ASCO), Medicare and Quality Care.

Cancer Patients Refusing Care over High Costs, Study Finds, CHICAGO SUN TIMES, 2008.

Cary Presant, Family Health – Quality Cancer Care: Making Sure You Get It | Health News (2008)

Community Oncology Alliance (COA) Position Statement.

Community Oncology Alliance (COA), COA PAC 2008: Why is There a Need for a PAC in Community Oncology?

Community Oncology Alliance (COA), Mission Statement, available at (2008).

Community Oncology Alliance (COA), Thoughts from COA 2008.

Duke Clinical Research Institute, Duke University Medical Center, Report: The Medicare Modernization Act and Changes in Reimbursement for Outpatient Chemotherapy: Do Patients Perceive Changes in Access to Care? (2006)

Duke Comprehensive Cancer Center, Duke Clinical Research Institute, Medicare Modernization Act Did Not Change Chemotherapy as Feared (2007) Web.

Ed Edelson, Did Medicare Reimbursement Changes Affect Prostate Cancer Treatment? THE WASH. POST, 2008, Web.

Hopkins Bloomberg School of Public Health, Public Health News Center, Long History of Missed Opportunities Plague Medicare Prescription Drug Benefit (2004)

International Society for Pharmacoeconomic and Outcomes Research (ISPOR) Health Science Policy Council, Drug Cost in Pharmacoeconomic Studies (2005)

Jim Drinkard & William M. Welch, AARP Accused of Conflict of Interest Group Stands to Profit from Medicare Bill, USA TODAY, 2003.

Kaiser Daily Health Policy Report, Prescription Drugs | Wall Street Journal Examines How Costly Cancer Drugs Affect Physicians’ Treatment Decisions, (2008)

Katherine Yurica, News Intelligence Analysis, AARP Rigs It’s Own Poll, YURICA REPORT, 2003.

Kimi Yoshino, Tardy Medicare Reimbursements Are Hurting Doctors in California, Nevada, and Hawaii, LA TIMES.

Letter from Members of Congress to Congressional Leadership, (2008)

Liz Szabo, Prices Sour for Cancer Drugs, USA TODAY, 2006.

Melissa Evans, Physicians Face Closing Their Doors, CONTRA COSTA TIMES, 2008.

Minnesota Medicine, Medicare Cut Delayed for Six Months (2008)

Stan Klein, Cancer Survivor: Least Costly Alternative Not Good Enough for Cancer Patients, SOMERVILLE J.

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  • Press Release, 74% of Oncologists Predict Rising Costs Will Exceed Society’s Ability to Pay for Optimal Cancer Care, Shows New Study by National Analysts Worldwide Oncologists Look at Oncology: The Prognosis of US Cancer Care, INT’L BUS. TIMES, 2008.

Press Release, AFL-CIO, Older Voters Say Congress Should Reject Medicare Drugs Deal, Go Back to Work, New National Survey Shows.

Press Release, Association of Community Cancer Centers, Major Shortage of Oncologists Projected in the United States (2008)

Press Release, McKesson Specialty, Onmark 3rd Annual Benchmarking Survey Shows Community Oncology Practices Seeing More Patients, Making Less Profit Per Physician (2008).

Press Release, National Patient Advocate Foundation, Global Access Project (GAP) Study Examining Patients’ Access to Cancer Care Featured in the Journal of the American Medical Association (JAMA) (2008)

Press Release, National Patient Advocate Foundation, Global Access Project (GAP) Study Examining Patients’ Access to Cancer Care Featured in the Journal of the American Medical Association (JAMA) (2008)

Press Release, The White House, President George W. Bush, President Signs Medicare Legislation, (2003).

Press Release, Thompson Reuters Survey Finds Cancer Patients Foregoing Treatment Because of Costs. (2008)

Footnotes

  1. The Medicare Prescription Drug, Improvement and Modernization Act of 2003, PL 108 -173 (HR1) (2003).
  2. Wikipedia, Medicare Prescription Drug, Improvement, and Modernization Act,(2008). See also Hopkins Bloomberg School of Public Health, Public Health News Center, Long History of Missed Opportunities Plague Medicare Prescription Drug Benefit (2004)
  3. The Medicare Prescription Drug, Improvement and Modernization Act of 2003, PL 108 -173 (HR1) (2003).
  4. Press Release, The White House, President George W. Bush, President Signs Medicare Legislation, (2003).
  5. Community Oncology Alliance (COA) Position Statement.
  6. The President’s Cancer Panel 2007-2008 Annual Report, Maximizing Our Nation’s Investment: Three Crucial Actions for America’s Health (2008).
  7. Cary Presant, Family Health – Quality Cancer Care: Making Sure You Get It | Health News (2008)
  8.  Community Oncology Alliance (COA) Position Statement.
  9. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, PL 108-173 (HR1) (2003).
  10. Alisa M. Shea et al., Association between the Medicare Modernization Act of 2003 and Patient Wait Times and Travel Distance for Chemotherapy, 300 JAMA 2, 189-196 (2008).
  11. International Society for Pharmacoeconomic and Outcomes Research (ISPOR) Health Science Policy Council, Drug Cost in Pharmacoeconomic Studies (2005)
  12.  Id.
  13.  Interview with Dr. Henry J. Goolsby, III, The Lake Charles Surgical and Medical Clinic Oncology Department (2008).
  14.  Community Oncology Alliance (COA) Position Statement.
  15. American Society of Clinical Oncologists (ASCO), Frequently Asked Questions on the 2006 Demonstration Project.
  16. Community Oncology Alliance (COA), Thoughts from COA 2008.
  17. Community Oncology Alliance (COA) Position Statement.
  18. Id.
  19.  Id.
  20. The Medicare Payment Advisory Commission, Report to Congress: Effects of Medicare Payment Changes on Oncology Services (2006)
  21. Interview with Dr. Henry J. Goolsby, III, The Lake Charles Surgical and Medical Clinic Oncology Department (2008).
  22. The Medicare Payment Advisory Commission, Report to Congress: Effects of Medicare Payment Changes on Oncology Services (2006)
  23. Press Release, 74% of Oncologists Predict Rising Costs Will Exceed Society’s Ability to Pay for Optimal Cancer Care, Shows New Study by National Analysts Worldwide Oncologists Look at Oncology: The Prognosis of US Cancer Care, Int’l Bus. Times, 2008.
  24. Id.
  25. Liz Szabo, Prices Sour for Cancer Drugs, USA Today, 2006.
  26. Kaiser Daily Health Policy Report, Prescription Drugs | Wall Street Journal Examines How Costly Cancer Drugs Affect Physicians’ Treatment Decisions, (2008)
  27. Kimi Yoshino, Tardy Medicare Reimbursements Are Hurting Doctors in California, Nevada, and Hawaii, LA Times, 2008.
  28. Id.
  29. Community Oncology Alliance (COA) Position Statement.
  30. Press Release, 74% of Oncologists Predict Rising Costs Will Exceed Society’s Ability to Pay for Optimal Cancer Care, Shows New Study by National Analysts Worldwide Oncologists Look at Oncology: The Prognosis of US Cancer Care, Int’l Bus. Times, 2008.
  31.  Community Oncology Alliance (COA) Position Statement.
  32. Press Release, 74% of Oncologists Predict Rising Costs Will Exceed Society’s Ability to Pay for Optimal Cancer Care, Shows New Study by National Analysts Worldwide Oncologists Look at Oncology: The Prognosis of US Cancer Care, Int. Bus. Times, 2008.
  33. Id.
  34. Interview with Dr. Henry J. Goolsby, III, The Lake Charles Surgical and Medical Clinic Oncology Department (2008).
  35.  Community Oncology Alliance (COA) Position Statement.
  36.  Id.
  37. Melissa Evans, Physicians Face Closing Their Doors, Contra Costa Times, 2008.
  38. Press Release, 74% of Oncologists Predict Rising Costs Will Exceed Society’s Ability to Pay for Optimal Cancer Care, Shows New Study by National Analysts Worldwide Oncologists Look at Oncology: The Prognosis of US Cancer Care, Int’l Bus. Times, 2008.
  39. Press Release, McKesson Specialty, Onmark 3rd Annual Benchmarking Survey Shows Community Oncology Practices Seeing More Patients, Making Less Profit Per Physician (2008)
  40. Id.
  41. Press Release, Association of Community Cancer Centers, Major Shortage of Oncologists Projected in the United States (2008)
  42. The President’s Cancer Panel 2007-2008 Annual Report, Maximizing Our Nation’s Investment: Three Crucial Actions for America’s Health (2008)
  43. American Cancer Society, Cancer Facts and Figures, 2008 Special Section: Insurance and Cost Related Barriers to Healthcare.
  44. Congresswoman Nancy Johnson, Statement, House Committee on Ways and Means Health Subcommittee (2005).
  45. Id.
  46. Press Release, Thompson Reuters Survey Finds Cancer Patients Foregoing Treatment Because of Costs. (2008)
  47. Cancer Patients Refusing Care over High Costs, Study Finds, Chicago Sun Times, 2008.
  48. Ed Edelson, Did Medicare Reimbursement Changes Affect Prostate Cancer Treatment? The Wash. Post, 2008
  49. Stan Klein, Cancer Survivor: Least Costly Alternative Not Good Enough for Cancer Patients, Somerville J., 2008.
  50. Duke Comprehensive Cancer Center, Duke Clinical Research Institute, Medicare Modernization Act Did Not Change Chemotherapy as Feared (2007)
  51. Duke Clinical Research Institute, Duke University Medical Center, Report: The Medicare Modernization Act and Changes in Reimbursement for Outpatient Chemotherapy: Do Patients Perceive Changes in Access to Care? (2006).
  52. Alisa M. Shea et al., Association between the Medicare Modernization Act of 2003 and Patient Wait Times and Travel Distance for Chemotherapy, 300 JAMA 2, 189-196 (2008).
  53.  Press Release, National Patient Advocate Foundation, Global Access Project (GAP) Study Examining Patients’ Access to Cancer Care Featured in the Journal of the American Medical Association (JAMA) (2008)
  54. Interview with Dr. Henry J. Goolsby, III, The Lake Charles Surgical and Medical Clinic Oncology Department (2008).
  55. Press Release, National Patient Advocate Foundation, Global Access Project (GAP) Study Examining Patients’ Access to Cancer Care Featured in the Journal of the American Medical Association (JAMA) (2008)
  56. Interview with Dr. Henry J. Goolsby, III, The Lake Charles Surgical and Medical Clinic Oncology Department (2008).
  57. 15 U.S.C. § 1
  58. Arizona v. Maricopa County Medical Society, 457 U.S. 332 (1982).
  59. Anne B. Clairborne, Matters of Antitrust: Professional Society Communication with Private Payors, 3 J. Oncol. Pract. 1, 15-17, (2007)
  60. AARP, About AARP.
  61. Id.
  62. Katherine Yurica, News Intelligence Analysis, AARP Rigs It’s Own Poll, Yurica Report, 2003. See also Press Release, AFL-CIO, Older Voters Say Congress Should Reject Medicare Drugs Deal, Go Back to Work, New National Survey Shows.
  63. Id.
  64. Id.
  65. Jim Drinkard & William M. Welch, AARP Accused of Conflict of Interest Group Stands to Profit from Medicare Bill, USA Today, 2003.
  66. Minnesota Medicine, Medicare Cut Delayed for Six Months (2008).
  67. American Society of Clinical Oncology (ASCO), Medicare and Quality Care.
  68. Community Oncology Alliance (COA), COA PAC 2008: Why is There a Need for a PAC in Community Oncology?
  69. Community Oncology Alliance (COA), Mission Statement, available at (2008).
  70. Arlen Specter, News Release, Senators Specter and Casey Introduce Community Cancer Preservation Act (2007).
  71. H.R. 3310, 110th Congress (2007).
  72. Letter from Members of Congress to Congressional Leadership, (2008).
  73. The Obama-Biden Plan to Combat Cancer.

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