Differences in Spending on Provider-Administered Chemotherapy by Site of Care in Medicare

OBJECTIVES: To compare Medicare spending on provider-administered chemotherapy in hospital outpatient departments (HOPDs) and physician offices after controlling for cancer type. STUDY DESIGN: Secondary data analysis. METHODS: We used 2010-2013 claims data for a random sample of Medicare fee-for-service beneficiaries who had cancer and received chemotherapy services either in physician offices or in HOPDs. We constructed 2 spending measures: (1) spending on chemotherapy drugs and (2) spending on chemotherapy administration. Each spending measure was the allowed payment, which includes both Medicare reimbursement and patient out-of-pocket spending. We compared the spending measures in the 2 care settings using regression analysis to control for certain patient risk factors including cancer type. We also compared the number of chemotherapy and administration claims per beneficiary and spending per claim by cancer type to understand differences in utilization patterns in the 2 care settings. RESULTS: Risk-adjusted chemotherapy drug spending per beneficiary was $2451 lower in HOPDs compared with physician offices. Risk-adjusted chemotherapy administration spending was $322 higher in HOPDs than in physician offices. Patients in physician offices received chemotherapy drugs more frequently than those in HOPDs. However, the chemotherapy spending per claim line was higher in HOPDs than physician offices. CONCLUSIONS: Chemotherapy drug spending per Medicare beneficiary was lower in HOPDs than in physician offices, driven by less frequent use of chemotherapy in HOPDs. As the site of provider-administered chemotherapy shifts from physician offices to HOPDs, continuing assessment of cancer care spending by site of care is necessary.