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Cuts to Medicare are driving Utah cancer clinics to turn away patients and refer them instead to hospitals for treatment.

Oncologists say the cuts, ordered April 1 under the recent budget sequester, reduced what Medicare pays them for expensive chemotherapy drugs, making it impossible for them to administer the drugs and stay afloat.

"We're being pushed off the cliff," said Richard Frame, a medical oncologist and partner at Utah Cancer Specialists. "Inconvenient is not the right word for it. It's tragic when you have patients you've been treating in your office and now all of a sudden you have to arrange to have them treated elsewhere."

Utah Cancer has referred 10 Medicare patients to hospitals and has identified 100 more for possible transfer.

It's the state's largest oncology group, logging about 7,500 patient visits a month across its eight clinics in Salt Lake, Davis, Tooele and Utah counties. About 40 percent of its patients are on Medicare, the government insurance program for retirees.

Frame says the disruptions could delay care for those who can't land hospital appointments right away or who will have to drive long distances multiple times a week for their chemo treatments.

"It just takes patients away from their doctors," Frame said. "It means more phone calls to track and monitor patients, and getting other doctors involved who probably don't know the patient as well."

It also may end up costing Medicare more.

Hospital-delivered chemotherapy costs an average of 24 percent more than treatment done in a doctor's office, according to a survey of claims from 2008 to 2010 by Avalere Health, an industry consultant.

"There's no question, hospitals are a more expensive model for care," said John Sweetenham, the new medical director at Huntsman Cancer Institute.

Huntsman has ample room to take on new patients, but capacity could become a problem if community oncology groups fold, said Sweetenham. "Community oncologists do a great deal of the day-to-day, less sophisticated oncology care."

Utah Cancer, the oncology provider for the state's largest hospital chain, Intermountain Healthcare, says it treats 65 percent of the state's chemo patients.

"This is not something that should be happening to our sickest and elderly," said the group's business manager Christy McGowan.

Medicare's share of the sequester's across-the-board spending cuts was just 2 percent and affects all Medicare providers.

But they hit oncologists especially hard because their payment is tied to the chemo drugs they deliver.

Medicare reimburses a flat amount for drugs, the average sales price plus 6 percent. And because oncologists generally can't negotiate for the same discounts on drugs that hospitals get, the margins are tight, said McGowan. "We don't get anywhere near average sales price. Even prior to sequestration, we had some drugs that cost us more than what Medicare pays for, but we made it work. Now we're under water on about 35 percent of the drugs."

Wagering Congress will soon broker a better budget deal, Utah Cancer is taking the hit for some patients.

"If we can come within $300 of our costs," McGowan said, "we'll consider seeing them."

But a 2 percent loss on chemo treatments that cost tens of thousands of dollars adds up fast. "These aren't nickel and dime losses," she said.

Some doctors in the practice, she added, have said they'd rather go out of business than turn away patients. But if that happens, McGowan wonders, "Where will all these patients go?"

Twitter: @kirstendstewart

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