Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them. “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 that 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 sequester was not supposed to directly effect Medicare and Medicaid beneficiaries. In terms of benefits, that's pretty much true, but there's one very cruel exception: cancer treatments. The treatments are covered under Part B of Medicare instead of other drugs which are in Part D. That's because physicians have to administer them directly, and the two percent sequester cuts apply to Part B. The cuts, coupled with the extremely high cost of chemotherapy drugs, means community cancer clinics are turning away thousands of cancer patients.The alternative, receiving treatments at hospitals, will ironically cost Medicare more: "One study from actuarial firm Milliman found that chemotherapy delivered in a hospital setting costs the federal government an average of $6,500 more annually than care delivered in a community clinic." Patients getting treatment at hospitals will be hit harder as well, an average of $650 more out-of-pocket for the patient, than receiving treatment in a community clinic. There's also a question of whether hospitals can absorb so many patients. That same study found that 66 percent of Medicare cancer patients get care at community clinics.

The Community Oncology Alliance, which advocates for cancer clinics, has written to members of Congress asking for legislation to either exempt cancer drugs from the sequester, or take the two percent off reimbursements physicians get to administer the treatments instead of the drugs themselves. They'd probably have as much luck getting PhRMA to give them a cut rate on the drugs as they will with the House Republicans. Cutting off treatment for tens of thousands of cancer patients isn't going to bother them a bit.

Also see jpmassar's diary for more discussion.