Oncology in the News: Reimbursement Sways Treatment Decision?

An analysis in the March-April issue of Health Affairs made the New York Times with the headline, “Pay Method Said to Sway Drug Choices of Oncologists”. Is this accurate?

The Health Affairs article examined the effect of physician reimbursement on choice of chemotherapy treatment for Medicare beneficiaries >65 years old (N = 9357) with various metastatic cancers. It covered a 3-year period (1995-1998) during which physicians were reimbursed based on the average wholesale price (AWP) for drugs administered in the office. The analysis concluded that the decision to administer chemotherapy was not influenced by higher reimbursement but that “providers who were more generously reimbursed…prescribed more-costly chemotherapy regimens to metastatic breast, colorectal, and lung cancer patients.” The New York Times article did not note that physicians are not currently reimbursed in this way.

The New York Times article creates a misleading impression, said Practice Manager Insider editorial board member Roberta L. Buell, MBA. The article “makes it seem that the only reason an antineoplastic agent is given is the drug profitability,” said Buell, vice president of P4 Healthcare, Sausalito, California. Based on her experience with drug hotlines, she said, “Oncology clinics everywhere work very hard to get patients who have no insurance or a non-covering diagnosis a supply of drug.  Sometimes this effort takes many hours of the clinic’s time. They make no money on this drug or the time spent trying to acquire it and, yet, the patient is treated. Most practices will go to great lengths to make sure a patient gets a novel agent regardless of profitability.”

The profit motive may enter “when two drugs are exactly alike and there is absolutely no difference in patient outcome,” Buell said. When the generic for paclitaxel became available, for example, it carried the same AWP as the branded version. “This was a corporate pricing move to generate clinic profits and was not a conscious decision by the provider. Yet, the provider absorbs the bad press, even though what they are doing is their prerogative in a free market economy,” she pointed out.

Another recent study has examined the impact of payer policies on physician treatment decisions and patient access to off-label therapies. This one was commissioned by the Association of Community Cancer Centers, the Biotechnology Industry Organization, and the Pharmaceutical Research and Manufacturers of America. It surveyed 28 oncologists and 12 oncology practice managers. Oncologists reported relying on peer-reviewed literature (89%), drug compendia (60%), drug manufacturer hotlines (25%), and case reports (25%) to make clinical decisions. Payer policies did influence whether decisions were carried out. About 54% said that Medicare non-coverage “frequently” or “very frequently” caused them to change their decision. The comparable figure for private payer policies was 28%.

Buell noted a systemic problem with drug pricing during the period covered by the Health Affairs study. “The RBRVS [resource-based relative value scale] pricing mechanism rewards procedural efficiency… but oncology is not procedure-based,” she said. For many years, drug profitability made up the difference between the RBRVS fee schedule and practice cost. Use of average sale price (ASP) and “better” coding for drug administration represent attempts to fix the problem of inadequate compensation for practice overhead. But so far, “these have not yet adequately done the job,” Buell concluded.

Comments

[PAWAN ARYA]

The reimbursement rates have not significantly changed the way the drugs are prescribed in Oncology Practices. However, the practice does have to look for better alternatives (in terms of reimbursements) for drugs where the reimbursement is below acquisition cost. One glaring example is Neulasta. Medicare payment for the drug is significantly below the acquisition cost. If the patient needs a shot, physician practice is in no position to provide stock drug unless is receiving substantial rebate, which may not always be the case.

[Alix McNamee]

I understand that some drug retailers have programs that allow a physician to predict whether a specific drug regimen is underwater or not. I have not used them. I do agree with the first commenter that Neulasta pricing is a disaster. We avoid the drug and use it only when a pt cannot possibly return to the clinic for multiple days.

[gpawelski]

Dr. Neil Love reported in a survey of breast cancer oncologists based in academic medical centers and community based, private practice medical oncologists. The former oncologists do not derive personal profit from the administration of infusion chemotherapy, the latter oncologists do derive personal profit from infusion chemotherapy, while deriving no profit from prescribing oral-dosed chemotherapy.

The results of the survey could not have been more clear-cut. For first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists (who are motivated to keep off-protocol patients out of their chemotherapy infusion rooms to reserve these rooms for on-protocol patients) prescribed an oral-dose drug (capecitabine), while only 13% prescribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel.

In contrast, among the commuity-based oncologists, only 18% prescribed the non-remunerative oral-dose drug (capecitabine), while 75% prescribed remunerative infusion drugs, and about 40% prescribed the expensive, highly remunerative drug docetaxel.

http://patternsofcare.com/2005/1/editor.htm (figure 37, volume 2, issue 1, 2005)

The existence of this profit motive in drug selection has been one of the major factors working against the individualization of cancer chemotherapy based on testing the cancer biology.

In the absence of cell culture assay testing, oncologists will continue to base their drug selections on reimbursement more than on any other single factor. Absent assay testing, they are free to choose the most remunerative therapy.

By utilizing cell culture assay tests, they do so either because they want to choose the treatment which is most likely to work or that is what their patients want. Afterall, even ASCO endorses "patient's treatment preferences." Either way, they are forced to consider information going beyond reimbursement.

There are patients who have progressive disease after first-line therapy, only to enjoy a dramatic benefit from second or even third line therapy, and these patients would have been much better served by receiving the most probable active treatment "the first time around."