Saving a Species
Oncology Reimbursement and
the Community Oncologist
Jeffery Ward, M.D.
Swedish Cancer Institute
Chair, ASCO Clinical Practice Committee
April 26, 2013
Is private practice oncology alone under threat?
Many hospitals are feeling the squeeze, as well
Who is the
Community Oncologist?
• Our current payment systems actually
fracture and often divide us.
• When we look at our changing practice
environment, we may all be community
oncologists.
• The solutions we seek must be applicable to
private practice, hospital practice,
academics.
It’s Unsustainable
Total Health Expenditure per Capita,
U.S. and Selected Countries, 2008
$8,000
$7,538
Per Capita Spending - PPP Adjusted
$7,000
$6,000
$5,003
$5,000
$4,627
$4,000
$3,000
$2,902
$2,729 $2,870
$3,129
$3,353 $3,470
$3,677 $3,696 $3,737
$3,970 $4,063 $4,079
$2,000
$1,000
$0
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en
(Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are
PPP adjusted.
National Health Expenditures per Capita, 19602010
NHE as a Share of GDP
5.2%
7.2%
9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.1% 16.2% 16.4% 16.8% 17.9% 17.9%
Notes: According to CMS, population is the U.S. Bureau of the Census resident-based population, less armed forces overseas and population of outlying
areas, plus the net undercount.
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at
http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2010; file nhegdp10.zip).
Total National Health Expenditure, Select Calendar Years
EVERYONE’S
HEALTHCARE COSTS
ARE RISING
Average Annual Worker and Employer Contributions to
Premiums and Total Premiums for Family Coverage,
1999-2011
$13,375*
$12,680*
$12,106*
$11,480*
$10,880*
$9,950*
$9,068*
$8,003*
$7,061*
$6,438*
$5,791
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.
$13,770*
$15,073*
Total Personal Health Care Expenditures, Percent of Current GDP
National Health Expenditures, Business vs. Government
National Health Expenditures, Percent of Total, Business vs. Government
Medicare Program Payments, 1967-2009, Parts A & B
Percent Distribution of Medicare Program Payments, by Type of Service: CY 1967 & 2009
If Everything’s so
Expensive, Why Pick
on Oncology?
CMS Benefit Payments by Major Program Service Categories, FY 2010
*Covered clinic services are included under Outpatient
Cost of Cancer Care
Cancer Drugs
Cancer Medical
Healthcare
GDP
But it’s not just the
drugs…
• CMS identified several of our
chemotherapy administration codes as
a “high value, high volume” service to
be reviewed at the RUC
• RAC audits of Level 5 E&M visits
Total Payments for Oncology Services, 2001-2002, 2008-2009 (standardized to 2010 dollars)
Data Source: 2001-2002, 2008-2009 Medicare 5% Standard Analytic Files
September 2011
2001-2002
Total Payments*
2008-2009
%
Total Payments*
Nominal % Difference
%
% 2008-2009 - % 2001-2002
Chemo Administration
$
723,624,824
1% $
1,376,917,867
2%
1%
Chemotherapy Drugs
$
8,871,087,462
17% $
10,894,902,437
18%
1%
Radiation Oncology
$
5,011,238,470
10% $
7,183,436,238
12%
3%
Evaluation & Management
$
1,590,332,030
3% $
1,688,870,974
3%
0%
Hospice
$
3,207,874,987
6% $
4,017,638,865
7%
1%
Laboratory Tests
$
1,392,626,234
3% $
1,846,244,238
3%
0%
Other (Physician, ASC, OP SAFs)
$
6,376,707,921
12% $
7,025,659,535
12%
0%
Other IP (IP stays without surgical procedure
codes)
$
2,276,925,461
4% $
1,776,314,709
3%
-1%
Imaging Services
$
2,275,491,172
4% $
3,755,857,585
6%
2%
Surgery (includes IP and Physician claims)
$
20,550,467,188
39% $
19,624,538,995
33%
-6%
Total
$
52,276,375,747
$
59,190,381,444
CMS Chief Eyes Oncology
Payment System…
Comments from Jonathan Blum, CMS Medicare
Director
December 10, 2012
•
•
•
•
CMS is considering new pay systems for oncology
services, including the way that expensive cancer
drugs are reimbursed under Part B.
Expensive injectable cancer drugs are one of the
most difficult issues in addressing Medicare
spending in Part B….about 10 drugs account for a
disproportionately large portion of Part B spending.
But the payment system needs to be changed for all
oncology services, not just drugs, and the
replacement likely will be "global" in nature.
There is a growing sense in the agency, particularly
in the innovation center, that our oncology payment
system needs to be reformed.
Goal of Payment
Reform
By 2020, CMS will have in place a matrix
of payment systems that recognize and
respond to the diverse needs of practice
settings and the patients they serve; these
new payment systems will put health care
resources to their highest and best use,
emphasizing high quality patient care, care
coordination, evidence-based medicine, and
patient centeredness.
Guiding Principles of
Payment Reform
• Assure every cancer patient has access to
high quality, high value, evidence based
care.
• Protect patient needs and wishes through
shared decision-making with their
physicians.
• Further develop and uphold the practice
standards of the medical profession.
• Support system-wide reforms and
improvements that keep pace with the
evolution of the health care system.
The SGR Rollercoaster
•
Dec 19, 2009: Congress freezes rates for two months.
•
March 2, 2010:
•
April 15, 2010: CMS advises physicians to hold claims
•
June 25, 2010: Congress delays cut until November 30
•
Nov 30, 2010:
Congress freezes rates for one month
•
Dec 15, 2010:
President signs bill for one-year delay to 25 percent
cut.
•
Feb 17, 2011:
Congress delays cut with 10-month patch
•
Feb 22, 2012:
Congress delays until Jan of 2013
•
Jan 1, 2013:
Congress delays for one year
CMS holds claims.
Components of Comprehensive
Medical Oncology Payment
Reform
• The Quality Oncology Practice Initiative (QOPI)
• A Chemotherapy Management Fee that gets
Oncology out of the Drug Concession
• Value Based Pathways
• Episodes of Care/Bundle Payments
• Care Coordination/Patient-Centered Medical
Oncology Home
Table 1
Phased Approach
Element
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
QOPI
No negative
adjustment
Positive
adjustment for
participation
No negative
adjustment
Positive adjustment
for participation
Must meet performance
benchmarks for positive
adjustment; no negative
adjustment
Must meet higher
performance
benchmarks for
positive adjustment;
no negative
adjustment
Positive and negative adjustments
based on performance
benchmarks; increased positive
adjustment based on QOPI
certification
Management Fee
(Chemotherapy)
Practices choose to
opt-in (must also
participate in
QOPI); those who
do not opt-in
remain in current
ASP+6
environment
Management fee
grows at MEI (or
other suitable
index)
Management fee grows
at MEI (or other suitable
index)
Management fee
grows at MEI (or
other suitable index)
Management fee grows at
Medicare Economic Index (MEI)
(or other suitable index)
Pathways
Positive
adjustment for
participation
Positive adjustment
for participation
Must meet 70%
concordance for positive
adjustment
Must meet 80%
concordance for
positive adjustment
Must meet 80% concordance for
positive adjustment; negative
adjustment for those below
Episodes/Bundlin
g
Practices choose to
opt-in to colon
cancer bundle for
one year
Practices choose to
continue bundle or
opt out / Data
analysis from first
round of colon
cancer bundle
Second round of colon
bundle offering; breast
cancer bundle opened
Practices choose to
continue bundle(s) or
opt out/ Data analysis
from first round of
breast bundle, second
round of colon bundle
CMS determines, based on results,
continued offering of bundle(s)
Care
Coordination Fee
 PatientCentered Medical
Oncology Home
(based on NCQA
“specialty” home
criteria)
Practice receives
“care
coordination” fee
and begins to put
in place the basic
elements of a
PCMH
Practice receives
“care coordination”
fee and finalizes
basic elements of a
PCMH
Practice must achieve
Level I Recognition
from NCQA
Practice must achieve
Level II Recognition
from NCQA
Practice must achieve Level III
Recognition from NCQA (fullyfunctioning medical home); higher
adjustments for higher performers
(whether through NCQA criteria
or actual performance on ER
visits, hospitalizations)
Energy &Commerce and
Ways & Means Proposal
BRINGING MEDICARE REIMBURSEMENTS INTO
THE 21ST CENTURY
•
•
•
•
•
•
•
•
This proposal, modeled after reimbursement systems that are employed
widely in the private sector, improves upon Medicare’s outdated system by:
Fully repealing the SGR and eliminating the estimated 25 percent acrossthe-board rate cut in 2014 and any future rate cuts called for under the
SGR;
Establishing a period of predictable, statutorily-defined payment rates,
enabling physicians to prepare for and participate in payment reform;
Empowering physicians to determine the quality and efficiency measures
that are clinically meaningful for Medicare beneficiaries;
Rewarding physicians who deliver high-quality and efficient care rather than
continuing the current system that encourages volume and unnecessary
spending;
Requiring the Centers for Medicare & Medicaid Services (CMS) to provide
timely feedback and data to physicians, enabling physicians to make
adjustments to improve patient care and their assessed performance;
Providing reimbursement options – instead of the current one-size fits all
approach – that enable physicians to select the Medicare payment system
that best fits their practice; and
Engaging the physician community in efforts to improve, reform, and update
Medicare’s outdated physician reimbursement system.
QOPI Needs to Serve as the
Underpinning of any
Reimbursement System
QOPI - Strengths
•
•
•
•
•
•
•
“Buy in” from Community
Oncologist-Developed
Meaningful & Actionable Measures
Nimble, Quickly Updated
Tiered Participation
Adaptable
American Taxpayer Relief Act of 2012 paves
the way to use QOPI to satisfy PQRS
requirement
QOPI:
It Works
QOPI - Weaknesses
•
•
•
•
•
Paper-based
Manual abstraction
Resource intensive
Lacking value based measures
Lacking outcome measures
ASP+6: The Good
• Manufacturers are aware that
purchasers of single-source drugs paid
under ASP+6 can only tolerate small
increases in price, otherwise drug is
underwater
• Competition amongst multi-source
(generic) drugs drives prices down
Select Branded Part B IV Drugs, Price Increase 2005-2013
+43%
+28%
+49%
When Drugs Become Multi-Source (Generic Entry)
Source: CMS ASP Pricing Files, January 2005-2013
ASP+6: The Bad
• Because after-market price increases for singlesource drugs are limited, market introduction prices
grow progressively more insane.
• The last 10 oncology drugs introduced to market cost
~$10,000/month or $100,000/year.
• The inability to respond to market forces without a
drug going underwater, may be a contributing factor
to the many drug shortages in the generic drug
market.
• It is a favorite target of politicians every time cutting
costs in Medicare is discussed.
ASP + 6: More Bad
It can be summarized in one word: risk. Under BnB, the docs
take 100% of the risk and the supplier takes zero. Think of
the transaction; they sell you a drug and you pay for it. In fact,
the sooner you pay, the better deal you get. After that, they are
done and the drug is 100% your problem. The patients
doesn’t show up: your problem. They show up but are
medically unsuitable for treatment: your problem. The drug
is infused and the patient cannot make their co-pay: your
problem. The insurance company denies the claim: your
problem. ASP changes and you are underwater: your
problem. The distributors and Pharma have a perfect model:
they get paid and are out of the transaction on day 1, leaving
the doc to take on all- 100%- of the transaction risk. It’s one
of the most uneven business transactions on the planet. Yet
many docs fight to keep this model going. Amazing.
Anonymous ASCO CEO
ASP+6: The Ugly
Practices are
incentivized to
use more
expensive drugs
Studies show
changes in
prescriber
behavior in
response to
changes in drug
reimbursement
We are in
desperate times.
Desperate men
and women do
desperate things.
CMS Chief Eyes Oncology
Payment System…
Comments from Jonathan Blum, CMS
Medicare Director
December 10, 2012
Does the incentive structure that was created
in 2003 best serve these competing goals of
beneficiary access and value…Some have
suggested that the ASP plus 6 percent drives
physician behaviors in ways that might not
serve these two goals…I'm not sure what the
future holds and I'm not sure what the answer
is, but it's one that we're watching carefully.
It's one that we're mindful of and it's striking
how much we're spending for a handful of
drugs that continue to grow.
One Alternative:
The Chemotherapy Management
Fee
• Uncouples reimbursement from drug prices, drugs
are a pass through, paid at acquisition price.
• Instead of a margin on drugs, pays a flat episodic fee
for pharmacy management during active
chemotherapy.
• Keeps practices “whole”; in aggregate,
reimbursement very similar to ASP+6.
• Paid outside of Part B cap on physician services just
as ASP+6 is today.
• Saves money by tying increases in reimbursement to
performance, quality, and inflation (MEI) not to
increasing drug prices.
Chemotherapy
Management Fee
• Can be calculated from CMS Actuarial Data
• Must be modeled and piloted in real practices that are
disparate in size, geography, and settings
• It should be applied to both IV and Oral chemotherapy
regimens
• There will be winners and losers, it is anticipated that
smaller and rural practices, most disadvantaged by the
current system will be winners.
• Practices should be allowed to opt in or stay with ASP
based reimbursement.
• A semblance of the current drug distribution
infrastructure, must be maintained.
• Downward pressure on drug prices must be maintained
or enhanced.
Value Based Pathways
Guidelines are not Pathways.
Pathways can reduce variability.
Good Pathways will, in the aggregate, reduce costs.
ASCO will not develop pathways, there are already
7 commercial pathways in the market and
NCCN/USON have announced a partnership to
develop a new and comprehensive set of pathways.
• ASCO can consider developing criteria by which
pathways can become Medicare certified.
• Physicians should only have to use one set of
certified pathways.
• Optimal pathway adherence is not yet established,
but it is not 100%.
•
•
•
•
Episodes of Care/
Bundled Payments
• Already exist: DRG, APC, Dialysis
• UHC demo in Oncology – still waiting…
• In 2009, ASCO proposed a colon cancer
bundle demo to CMS and CMMI. In 2011
it was updated and resubmitted.
• Bundled permutations can include: drug or
no drug, aggregated monthly payments,
disease and stage specific payments,
supportive care, hospital utilization,
imaging,…
Episode Based Payment (an
example)
• Episode-based payment: specified condition, defined period of
time, single payment
• Bundles drugs and administration
• Payment based on average cost of caring for all patients with that
condition
• Theorized savings:
– Physician as discretionary purchaser, choosing between
effective alternatives based in part on cost; introduces an
incentive for providers to select lower-price regimens
(assuming equal efficacy)
– Suppliers ultimately reduce prices through competition
• Expensive new innovator drugs granted “pass through” status
initially
• Existence of treatment guidelines make monitoring appropriate
treatment/quality feasible
The Patient Centered
Medical (Oncology) Home
• Complete coordination of care, including
survivorship and hand-off back to PCP
• Use of pathways
• Aggressive pre-emptive symptom management
• Extensive use of proactive telephone contact
• Continuous flow of information back to PCP via
EHR
• Savings from decreased utilization of expensive
services, i.e. ER visits and hospitalizations
• Model and resultant savings highly HIT dependent
NCQA’s PCMH
“Standards”
(Primary
Care)
NCQA: Won’t You Be My Neighbor?
the “PCMH-light”
Reimbursement in a PCMH
(or neighborhood)
• Fee-for-service doesn’t work
• Options:
– Gain sharing
– Shared savings
– Bundled payments/episodes of care
– Additional payment for care
coordination, and eventually, health
outcomes?
We Need to Engage…as
Providers, AS Leaders
• If Oncology Care Payment Reform is to be successful, it
must be provider driven and led.
• Payment Reform must follow values and principles that
keep us true to our mission and oath as cancer care
providers.
• We will not be pleased if we wait for Congress, CMS,
Insurers, Pharma, and Primary Care to design it for us.
• ASCO, COA, ACCC: They cannot do it alone.
• Engagement means: Engage with your representatives
in D.C. and in Olympia. Engage with National and State
Societies. Engage with your hospitals and clinics.
Engage with your colleagues in Primary Care and other
specialties. Engage with your patients.