Really, really interesting article on this topic in MedPage Today (written by doctors).
First of all, the historical perspective going back nearly 150 years is fascinating...it helps to understand how things evolved to the way that they are today.
But more to today's topic, I'll simply use copy/paste some key parts.
Jumping into the middle of the article:
Congress attempted to fix the problem with passage of the Medicare Modernization Act (MMA) in 2003.
The new law did not take away physician’s ability to buy chemotherapy drugs, administer them in-office or bill for them. However, it did alter the reimbursement structure.
To bridge the gap between the price physicians pay for drugs and the pay they collect, the MMA developed a reimbursement model based on average sales price (ASP), plus a 6 percent markup and administrative fee.
As part of this legislation, manufacturers are required to report a drug’s ASP to the Centers of Medicare and Medicaid Services (CMS) quarterly to substantiate reimbursements.
This change did not address the problem.
Oncologists maintained their income by altering their practice patterns.
As the reimbursement for established medications decreased, oncologists have chosen to use progressively more expensive chemotherapy drugs with increased frequency of treatment. That’s because under the fee-for-service reimbursement model, each new treatment equals another payment.
It’s difficult, if not impossible, to prove this shift is directly motivated by personal financial gain. But it’s also hard to deny the financial gain that resulted.
Impossible to prove; hard to deny.
www.kevinmd.com/blog/2014/08/oncologist-pay-chemotherapy-buy-bill-needs-stop.html