A recently released Medicare Payment Advisory Commission (MedPAC) report to Congress found that oncology practices considered 2005 Medicare payment changes significant, and detailed practices’ coping tactics. These findings come from a Congressionally mandated report evaluating the effect of changes in how Medicare pays for drugs administered by oncologists. Part of the commission’s efforts to compile the report included visiting community oncologists and hospital outpatient departments, and conducting focus groups with Medicare patients who received chemotherapy during the past year.
Oncologists and their office managers reported that some practices made the following changes to compensate for Medicare payment changes:
- Choosing drugs for treating chemotherapy side effects based on price
- Keeping smaller inventories of drugs on hand. This allows the practice to respond quickly to price changes and avoids tying up large sums of capital. They also took advantage of prompt pay discounts.
- Hiring financial advisers to work with patients and assess whether patients can pay out-of-pocket expenses. If patients have no supplemental insurance, the adviser determines whether the person qualifies for other assistance such as Medicaid or programs from pharmaceutical manufacturers. Practices may give patients a payment schedule for making copays.
- Replacing full-time employees with part-time employees
- Reducing employee health and pension benefits
- Replacing nurses with pharmacy techs
- Hiring employees to handle coding to free nurses for patient care
- Hiring a pharmacist to buy and mix drugs, and advise on drug purchases based on price and clinical effectiveness
- Purchasing positron emission tomography (PET) scanning for their offices and increasing imaging services
The report said that neither patients nor oncologists and office managers reported any decline in quality of care.
Board member analysis
This MedPAC report includes only partial Medicare claims data for 2005. Practice Manager Insider editorial board member Elaine L. Towle, CMPE, commented that “2006 is the real test” for payment changes instituted under the Medicare Prescription Drug Improvement and Modernization Act. She predicts a deteriorating situation this year, as the transitional add-on payment for drug administration services are no longer available and the 2006 demonstration project provides “much less money that the 2005 project.”
Towle, program director at Oncology Metrics, foresees significant shifting of services from offices to hospitals and access problems, as “hospitals may not accept additional chemotherapy patients.” Small practices who were unprepared for these changes are already struggling, she said. “We are already seeing consolidations and practice closures. Quality of care should not suffer, but quality of the patient and provider experience may.”
Elaine is right on. Real analysis and impact will not be known until the end of the second quarter of this year.
Posted by: Christian Downs | March 09, 2006 at 09:58 AM