Transcript Oncology Reimbursement Past, Present and Future

Oncology Reimbursement
Past, Present and Future
Association of
Northern California Oncologists
Medical Oncology Association
of Southern California
Welcome & Introduction
Peter Paul Yu, MD
ANCO President
Steven Tucker, MD
MOASC President
Forthcoming ANCO Events
• ANCO Audio Conference:
Managed Care Contracting in an ASP World
Wednesday, July 13th, 12PM
• ANCO 2005 Annual Meeting
Tenaya Lodge at Yosemite
October 14-16th
Acknowledgment of Support
Sponsors
AMGEN • APP/Abraxis Oncology
Bayer Oncology/Onyx Pharmaceuticals • Berlex Laboratories
Genentech BioOncology
International Oncology Network/Oncology Supply • MGI Pharma
Millennium • Novartis Oncology
Oncology Therapeutics Network/Onmark
Exhibtors
AstraZeneca • biogenIDEC • Bristol-Myers Squibb Oncology
Celgene • Enzon Pharmaceuticals • Lilly Oncology
National Oncology Alliance
OrthoBiotech/Tibotec Therapeutics • OSI Pharmaceuticals
Pfizer Oncology • Sanofi Aventis Oncology
Schering-Plough Oncology • US Oncology
Oncology Reimbursement
Past, Present and Future
Dean Gesme MD FACP FACPE
Past Chair, ASCO Clinical Practice Committee
Past Chair, National Coalition for Cancer Survivorship
Managing Partner, Iowa Cancer Care
Eleanor Roosevelt
Do something every day
that scares you!
Ground Rules
All Theories are wrong
but some are useful.
Doctors are men who
prescribe medicine of
which they know little, to
cure diseases of which they
know less, to human being
of which they know nothing.
Voltaire 1694-1778
What Health Professionals
and Patients Want
Quality Care
What Payers Want
Cost Control
Value Equation
Value =
Quality
Price
Everywhere the old order
changes, and happy are those
who can change with it
Sir William Osler
System Change
Transactional
Transformational
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Transactional Change
-- incremental
-- negotiated
-- political
-- imposed
Transformational Change
-- altered paradigm
-- shift in values
-- reform in beliefs
Cost Control is
Transactional
Quality Improvement
is Transformational
“Transformed means that
when times are tough, we
invest more in quality”
Charles Buck
– retired GE executive
Transformational
Change Process
Vision
Strategy
Trust
Tactics
Tests/Trials
Implementation
Physicians and Trust
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Only the best and brightest are chosen
Thus, you are the best
Others may not be as good
Thus, others may make mistakes
You will be responsible for all mistakes
affecting your patients
Therefore, others can not be trusted
Teams include others and therefore can not
be trusted
Transformational Change
Vision
Strategy
Trust
Tactics
Tests/Trials
Implementation
What We Say We Want
Patient-centric care
 Pay for Performance
 Improved Quality
 Improved Outcomes
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What We Will Pay For
Process-centric care
 Pay for procedures
 Piecework mentality
 Identical Pay for Best or Worst
Care
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All theories are wrong
but some are useful
Oncology Reimbursement
History
 Current Situation
 Future Possibilities
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History
Surgery
- 1809 first elective surgery
- 1867 antisepsis --- Lister
- 1890 Halsted radical mastectomy
- 1896 oophorectomy for breast cancer
- 1913 American Society for Control of Cancer
- 1936 Women’s Field Army
- 1945 American Cancer Society founded
“There must be a final limit to the development
of manipulative surgery, the knife cannot
always have fresh fields for conquest and
although methods of practice may be modified
and varied and even improved to some extent,
it must be within a certain limit. That this limit
has nearly, if not quite, been reached will
appear evident if we reflect on the great
achievements of modern operative surgery.
Very little remains for the boldest to develop or
the most dexterous to perform.”
Sir John Erichsen
Lancet 1873
Surgery
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Endoscopies
Laparoscopies
Sentinel node evaluations
Stereotactic procedures
Enhanced diagnostics – CT, MRI, PET,
Ultrasound
RFA, cryoablative procedures
Nanotechnologies
Transplantation
Radiation Therapy
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3D computerized treatment planning
IMRT
Dynamic dose delivery techniques
Continuous RT
Stereotactic Radiosurgery
Intracavitary brachytherapies
Radioimmunoconjugates
Pay Per Procedure
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New procedures priced liberally
Procedure becomes quicker, safer, and
simpler with time
Eventually, commoditization occurs and
price falls
Procedure replaced by new technology
and again priced liberally at first
Chemotherapy
Reimbursement
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HISTORY
- 1946 Nitrogen mustard
- 1953 Aminopterin
- 1960s alkylators and antibiotics
- 1970s platinum compounds, BMTs
- 1980s taxanes, biotherapies, ABMT
- 1990s growth factors, anti-emetics
- 2000 targeted therapies
Drug Reimbursement
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60s through early 80s – inpatient care – cost
plus pricing
80s-2005 – AWP pricing methodology -evolution to outpatient care setting due to:
- improved anti-emetic regimens
- shorter drug infusions
- availability of skilled oncology nurses
- physician investment in infrastructure
Office Based Chemotherapy
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81.3% to 85.7% of chemotherapy given
in office setting in 1990s according to
National Centers for Health Statistics
(CDC)
Patient preference in most situations
98% office based chemotherapy in
many practices
Skilled personnel, specialized facilities
Drug Reimbursement
AWP pricing
- simple, published reference
- reproducible and verifiable
- subject to manipulation
leucovorin, lupron, generics
- controversial
- unsustainable
Oral Drugs
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Levamisole --- inexpensive veterinary
anti-helminthic product, repriced
aggressively for adjuvant colorectal
therapy.
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Thalidomide --- banned in the 1960s.
Used for ENL in 1970s and 1980s.
Adapted and repriced in 2000.
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Gleevec, Iressa, Tarceva
ASP Methodology
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Untested
Fairness subject to question
Price to some will go up if it goes down
to others
Average price not available to all
Congressionally mandated
Unsustainable
Some feel the result of ASP will be de
facto drug price control
Drug Administration
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CMS uses AMA CPT coding for
reimbursing all physician services
Administration fees based on historical
charges and “practice expense” before
2005 as no “physician work” considered
Practice expense defined using “top
down” methodology ---average price per
hour for each specialty rather than
resource based
Drug Administration
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Drug administration relative values
supplemented in 2004 by 32% add-on
mandated by MMA
ASCO and other surveys suggest that
administration costs still severely
undervalued even with the add-on in
2004
2005 add-on decreases to 3%
Temporary codes for Medicare only
Temporary Codes
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New code for implanted port flush – minor effect
financially
Add physician work component to admin codes – AMA
RUC throws out physician survey data and uses lower
values similar to 2004
Unbundling of admin codes for 2005 – but practice
expense recalculated to factor in unbundling
CMS mandates payments for physician time spent
dealing with chemotherapy admin complications – but no
new codes and no consideration of special resources
Treatment planning and services provided relative to
chemo admin (patient teaching, phone calls, financial
counseling, psychosocial support) not separately
payable – AMA CPT Workgroup formed
Temporary Codes
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2005 temporary codes will be
incorporated in AMA published codes in
2006
Thus, 2005 will see private plans use
different codes than Medicare
Confusing and complicated for patients,
physicians and payers
Increased office overhead for billing
Americans always try to do
the right thing, after they
have tried every thing else.
Winston Churchill
Demonstration Project
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Patient-centric
Symptom management – quality of care
Fatigue, pain, nausea – simple scale
with minimal documentation
requirements
$130/patient/day for Medicare patients
receiving parenteral drugs in office
Economically will restore 30% – 60% of
overall reduction from 2004
MMA Changes for 2006
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Where will ASPs “land”?
Regression to the mean predicted for drug
prices
3% chemo administration add-on is eliminated
Competitive Acquisition Plan (MVI) – elective for
practices, details uncertain
 All drugs? Supportive care drugs?
 Safety
 Timeliness
 Drug denials
 Collection issues
 Costs of administration for practices
The moral test of government
is how it treats those who are
in the dawn of life, the
children, those who are in the
twilight of life, the elderly, and
those who are in the shadows
of life – the sick, the needy and
the handicapped.
Hubert H. Humphrey
The Future
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It’s difficult to make
predictions, especially about
the future.
Y Berra, C Stengel, S
Goldwyn, D Quayle, W
Rogers, M Twain, V
Gorge, G Marx, W
Allen, and many others
The Future
Transactional change
OR
Transformational change
Transactional Change
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Increase efficiency --- CMS’ recommendation to
physicians
IT/EMR – improved efficiency and ability to gather quality
data, BUT who will pay for it – value equation does not
favor this
Physician response – play by AMA/CMS rules ADD
PROCEDURES
CT, MRI, PET, Labs, daily or weekly chemotherapy
Change patient mix – reduce indigent care, reduce
Medicare exposure, refer poorly reimbursed cases to
hospitals
When elephants dance, the
chickens must be careful.
Asian proverb
Transformational Change
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Physicians paid for medical advice and
care services
Reasonable and equitable payment for
all expenses related to chemotherapy
services and management
Commitment to Quality assessment and
improvement
Trust and teamwork
Obstacles to Transformation
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Lack of trust
CMS commitment to AMA CPT process
Limited ability of CMS to spend on
transformational projects
Preoccupation with cost control
Private payers deferral to CMS payment
methodologies
Lack of techniques to define quality
Quality
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Pay for performance is certainly
acceptable --- but….
Requires uniform definition of
performance and validation of measures
Surrogates for performance may exist;
structure
process
Donebedian
outcomes
Structure
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Some payers offer a premium for
practices utilizing approved
Electronic Medical Records
technology
Process
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Data gathering and sharing
Computerized physician order entry
Electronic prescribing
Measures of access to care
Multidisciplinary coordination of care
Guidelines compliance
Enhanced services
 Patient education
 Psychosocial care
 Financial counseling
 Symptom management by oncology
nurses
Outcomes
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Response
Survival
Symptomatic improvement
Functionality
 Return to work
 Resumption of activities
COST ---- in its role in the
value equation
Physician Risk Acceptance for
Costs
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Prospective payments
Bundled charges
Episode treatment grouper
 Disease specific
 Age adjustments
 Stage adjustments
 Comorbidity adjustments
We have upped our quality,
so up yours.
Anonymous
What Will It Be?
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Transactional Change
 Incremental
 Negotiated
 Political
 Imposed
OR
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Transformational Change
 Vision
 Strategy
 Trust
 Tactics
 Tests/trials
 Implementation
Science is organized
knowledge. Wisdom is
organized life.
Immanuel Kant
Physicians must lead the
healthcare team for the benefits
of their patients. Payers must
be included as part of the
healthcare team. Together we
must work to maximize value
offered within our healthcare
system. This will require
transformational change.
These are my principles and if
you don’t like them, I have
others.
Groucho Marx