Their clients may seek care at hospitals, which also deliver chemotherapy treatments; however, it's usually more expensive and the hospitals may not be equipped to handle the influx.
"If we treated the patients receiving the most expensive drugs, we'd be out of business in six months to a year," said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. "The drugs we're going to lose money on we're not going to administer right now."
After an emergency meeting Tuesday, Vacirca's clinics decided they would no longer see one-third of their 16,000 Medicare patients.
"A lot of us are in disbelief that this is happening," he said. "It's a choice between seeing these patients, and staying in business."
The Medicare cuts went into effect April 1.
The impact of the sequester on cancer treatment has only recently become clear, adding an unintended consequence to a budget process that was already controversial for its blind, across-the-board cuts.
Some who have been pushing the federal government to spend less on health care say this is not the right approach.
"I don't think there was an intention to disrupt care or move it into a more expensive setting," said Cathy Schoen, senior vice president of the Commonwealth Fund, which recently released a plan for cutting $2 trillion in health spending. "If that's the case, we're being a penny wise and a pound foolish with these cuts."
Legislators meant to partially shield Medicare from the sequester, limiting the program to a 2 percent reduction - a fraction of the cuts seen by other federal programs.
But oncologists say the cut is damaging for cancer patients because of the way those treatments are covered.
PART B, PART D
Medications for seniors are usually covered under the optional Medicare Part D, which includes large private insurers that are absorbing the cuts. But because cancer drugs must be administered by a physician, they are among a handful of medications paid for by Part B, which covers doctor visits.
The federal government typically pays oncologists in community clinics for the average sales price of a chemotherapy drug plus 6 percent to cover storing and administering it.
Oncologists argue that the 2 percent cut will have to come out of that 6 percent overhead.
"If you get cut on the service side, you can either absorb it or make do with fewer nurses," said Ted Okon, director of the Community Oncology Alliance, which advocates for hundreds of cancer clinics nationwide. "There isn't really wiggle room."
'CONGRESS HID IT'
Okon's group has sent letters to legislators urging them to exempt cancer drugs from the sequester or, as a backup, only shave 2 percent off the money they receive to administer the medications.
"Everyone is talking about the White House tours, but nobody is talking about this," said Diana Kuene, whose husband received the letter shortly after beginning treatment for lymphoma. "It seems like Congress tucked this in and hid it."
Kuene said that her husband was able to work out a way to continue his treatment and that the clinic is now deciding how to proceed on a "case-by-case basis." The clinic did not respond to a request for comment.
Doctors at the Charleston Cancer Center in North Carolina began telling patients weeks ago that they would soon need to seek treatment elsewhere.
"We don't sugarcoat things; we're cancer doctors," said Charles Holladay, a doctor at the clinic. "We tell them that if we don't go this course, it's just a matter of time before we go out of business."