Skin cancer and Medicare: Reducing cost can be costly to patients

Medicare begins denying reimbursement

A recent study says a Medicare policy designed to reduce the cost of treating a kind of skin lesion called actinic keratosis goes against good medical practice and increases patients’ risk of developing potentially fatal squamous cell carcinoma. Also, patients may well suffer adverse reactions to the topical treatment Medicare wants physicians to use for the condition. The study also evaluated how doctors treated other skin conditions for which minor surgery or other procedures are used.

To reduce its expenditures, Medicare has recently been making it more difficult for patients to receive some medical procedures by denying their physicians reimbursement. Removal of actinic keratoses during the patient’s first visit with liquid nitrogen, a surgical code, is now one of those procedures in some states. The policy is intended to lower the incidence of unnecessary procedures.

Steve Feldman, MD, associate professor of dermatology and director of the Westwood Squibb Center for Dermatology Research at Wake Forest University School of Medicine in Winston-Salem, NC, and others reported in the Journal of the American Academy of Dermatology1 that the majority of dermatologists choose to treat precancerous lesions by removing them on the patient’s first visit. In some states, Medicare will not reimburse physicians who remove lesions on the initial visit. Alan Fleischer, a co-author of the Westwood Squibb Center study, says though Medicare is not technically prohibiting doctors from removing lesions during the initial visit, it is usually not reimbursing doctors for doing so.

Researchers analyzed all initial visits for actinic keratoses in 1993-94. Though some doctors in the Feldman study used topical treatment in conjunction with surgical removal of the lesions, none elected to use the topical treatment alone.

Ken Gross, MD, clinical professor of dermatology at the University of California at San Diego, says while Medicare’s policy may be of some help to its pocketbook in the short run, in the long term it’s going to cost the government more money — and patients their health — because many of the patients who receive only topical treatment will develop squamous cell cancer. "One of the great advances in dermatologic care was the use of liquid nitrogen for removal of actinic keratoses, which are basically pre-cancerous lesions. By simply freezing these lesions with liquid nitrogen, the cure rate is in the high 90s."

Gross says Medicare "wants doctors to treat with 5-f.u. [fluorocil] cream, an antimetabolite that was serendipitously discovered because people who were put on this particular antimetabolite as chemotherapy suddenly began to clear their skin precancers." The antimetabolite was put into a cream formula, marketed under the name of Efudex, and appeared to work fairly well.

However, Gross says, "My experience over the years has been that many of these patients will recur within a relatively short time after 5-f.u.treatment. The treatment itself is quite difficult; the patients can be very uncomfortable and experience quite a bit of reaction." Gross does not use Efudex for actinic keratosis treatment in general, reserving the cream as an intense post-operative treatment for the surrounding skin following squamous cell tumor removal. "It’s well known that the cure rate for primary basal cell cancer of the skin with Mohs surgery is somewhat over 99%, but the cure rate for squamous cell is about 4% less. I think that the reason is that there are a lot of actinic keratoses, a lot of sun damage precancer, around the tumor. So, I use a very intense course of 5-f.u. around that area, and I can get away with it because it’s a small area."

In particularly sunny areas, 5-f.u. causes a more intense reaction, including increased irritation, scaling, itching, and inflammation because of greater exposure to sunlight. It takes four to six weeks to adequately treat patients with 5-f.u., and another three weeks for them to heal. The sunnier states like Florida, New Mexico, and Texas (in all of which Medicare has instituted this policy) have more actinic keratoses, so it naturally costs more money to treat them there.

According to Gross, the cancers that develop in actinic keratoses have a lessened tendency to metastasize to other parts of the body than do squamous cell tumors of the lips or mucosa. "If people stop treating actinic keratoses," says Gross, "we’re going to see an upswing in the number of squamous cell cancers, which is going to end up costing the government more money than treating the actinic keratoses would have. It seems illogical to me that you would allow a lesion that’s a precancer and has close to a 100% cure rate to continue, or force people to use a suboptimal treatment."


1. Feldman SR, Fleischer AB Jr., Williford PM, Jorizzo JL. Destructive procedures are the standard of care for treatment of actinic keratoses. J Am Acad Dermatol 1999; 40:43-47.