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Before the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003, Medicare reimbursed physicians for chemotherapy drugs at rates that greatly exceeded physicians' costs for those drugs. We examined the effect of physician reimbursement on chemotherapy treatment of Medicare beneficiaries older than age sixty-five with metastatic lung, breast, colorectal, or other gastrointestinal cancers between 1995 and 1998 (9,357 patients). A physician's decision to administer chemotherapy to metastatic cancer patients was not measurably affected by higher reimbursement. Providers who were more generously reimbursed, however, prescribed more-costly chemotherapy regimens to metastatic breast, colorectal, and lung cancer patients.
Jacobson et al. (Wed,) studied this question.