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US Oncology Reports 2009 Fourth Quarter and Year End Operating Results
Date:2/25/2010

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We believe it is not possible to estimate the full impact of the REMS (on EBITDA) as it relates to prescribing patterns, until the REMS is in effect.  We believe a possible impact of the REMS could be further significant reductions in ESA utilization.

In late 2009, The Centers for Medicare and Medicaid Services (CMS) announced payment rates for services to be furnished under the 2010 physician fee schedule.  Under the provisions, the current Sustainable Growth Rate ("SGR") formula for setting aggregate Physician Fee Schedule spending would reduce payment for physician services by 21.3%.  Historically, Congress has intervened and through the budgetary process provided funding to prevent significant cuts in reimbursement rates.  In December 2009, President Obama signed the Department of Defense Appropriations Act, 2010 (H.R. 3326) into law which delayed the payment reduction until March 1, 2010.  We expect additional legislation from Congress will be enacted and currently estimate the impact to 2010 EBITDA of changes to CMS policies and payment rates will be approximately $1 million to $2 million reduction to oncology services paid under the CMS Physician Fee Schedule.  If Congress fails to act and avert the scheduled 21.3% scheduled fee reduction, EBITDA could be reduced by approximately $10 million to $13 million.  However, we continue to expect that the Congress, in the long run, will act
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SOURCE US Oncology, Inc.
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