Practice Manager Insider

ASCO to Feds: Consider Peer-Reviewed Literature in Off-Label Coverage

The American Society of Clinical Oncology (ASCO) is urging the Department of Health and Human Services (DHHS) to require that Medicare and other insurers consider articles in peer-reviewed journals when determining coverage of medications for off-label uses. In a statement published in a recent issue of the Journal of Clinical Oncology, ASCO notes that cancer patients experience problems with access to off-label therapies that represent the standard of care because insurers refuse to cover them. “Medicare contractors are routinely ignoring significant reports of clinical benefit from off-label uses of cancer drugs reported in peer-reviewed journals,” the ASCO statement asserted. Such coverage denials occur with Medicare, Medicaid, managed care, and other private health insurers, ASCO said.

The law requires Medicare and Medicaid to cover off-label uses supported by approved drug compendia. Most states also require such reimbursement. ASCO cited a few problems with the current system, and offered solutions.

• State law does not apply to health insurance self-funded by employers as such plans are protected by the Employee Retirement Income Security Act (ERISA). ASCO urged federal legislation to remove this exemption and make all private plans subject to the same requirement as Medicare.
• “Concerns have been expressed” about the speed with which approved drug compendia update based upon new evidence. ASCO urged DHHS to augment the list of qualified compendia if the currently approved one do not update quickly enough. The Center for Medicare & Medicaid Services (CMS) has received requests to increase the number of approved compendia, and the Medicare Coverage Advisory Committee (MCAC) recommended characteristics of any new compendia added in April.
• ASCO also suggested that DHHS identify peer-reviewed journals for carriers to use in determining coverage, as allowed by statute. It asked that DHHS work with the cancer community to develop the list of approved journals. ASCO urged that DHHS use its authority to require contractors to consider peer-reviewed literature as well as compendia, and to consider high-quality Phase II trials as sufficient evidence to justify reimbursement.

How the CAP Vendor Proposes to Fix CAP

The CEO of the sole specialty pharmacy vendor for the Medicare Part B Competitive Acquisition Program (CAP) testified at the July 13 hearing of the House Ways and Means Subcommittee on Health hearing about how to address problems that may account for the very low participation in the program. Only 307 physicians had signed up as of July 10, of whom 18 are medical oncologists.

Richard Friedman, CEO of BioScrip, spent much of his oral testimony summarizing issues with CAP and how to address them. He listed the following barriers and proposed solutions:

• Lack of on-site inventory → Supply physicians’ offices with limited inventory for emergencies


• Must ship to site of drug administration → Permit shipments to multiple locations designated by MDs


• Added MD billing requirements → MDs bill for administrative fee only


• Patient copay concerns → Enable MDs to support copay for beneficiaries on a case-by case basis


• Physician need for education about CAP → Allow MD open enrollment

Only 18 Oncologists Signed Up for CAP?

The recent House Ways and Means Subcommittee on Health hearing about Medicare Part B reimbursement offered a window into the early days of the Competitive Acquisition Program (CAP). This is because the CEO of the specialty medication distribution firm BioScrip, the sole CAP vendor, testified at the hearing. The CAP is a voluntary program that offers physicians the option of obtaining Part B drugs from vendors selected in a competitive bidding process, rather than buying and billing these drugs under the average sales price (ASP) system. Enrollment was extended until June 30 and the program began on July 1.

Some figures in the cancer care community have expressed skepticism about whether oncologists would sign up for the CAP. This view appears to have been well founded. Only 18 medical oncologists had signed up for CAP as of July 10, according to written testimony submitted by Richard Friedman, CEO of BioScrip. A total of 307 physicians in all specialties have registered, he said. Specialties with the largest concentrations of signups are ophthalmology (77) and allergy/immunology (69). However, oncology accounts for the largest share of Part B allowed charges.

Friedman mentioned the need to address issues with the CAP and to educate physicians about the program’s benefits. Testimony from two oncology representatives highlights the daunting nature of those tasks. Joseph S. Bailes, MD, of the American Society of Clinical Oncology (ASCO) mentioned that oncologists may avoid the CAP because CAP vendors can cut off access to drugs for patients who fail to pay their coinsurance within 45 days. Frederick M. Schnell, MD, president of the Community Oncology Alliance, characterized CAP in this way: “The oncology community at large (views) CAP as an untried and untested experiment. We will not expose our patients to the risks it presents. CAP will force the creation of individual patient inventories, increase the likelihood of treatment errors and delays, and place new and unreimbursed administrative burdens on our clinics.”

COA, ASCO Testify at House Subcommittee Hearing on Part B

Representatives of the Community Oncology Alliance (COA) and the American Society of Clinical Oncology (ASCO) were among those that testified about problems with the current system of Part B reimbursement at a hearing held by the House Ways and Means Subcommittee on Health. Written testimony submitted by those who testified at the July 13 hearing, along with a transcript of the session, is available at the COA website.

Frederick M. Schnell, MD, president of COA, testified that services reimbursement has decreased by more than 20% from 2003 to 2006. This is because demonstration projects and transition increases have expired, and new CPT codes for 2006 have been devalued.  He cited findings about problems with access to care from the organization’s survey (summarized in a July 13 Practice Manager Insider posting), and concluded that, “Community cancer clinics cannot operate when reimbursement continues to be ratcheted down while operating costs are increased by at least 4% per year.”  Some patients go untreated, he told the committee, “…because clinics cannot afford to provide treatment that is reimbursed less than cost.”

He suggested eliminating “prompt payment” discounts from calculation of the average sales price (ASP), removing the 6-month lag in ASP calculation (between price changes and their reflection in the ASP), creating payment codes for services that Medicare does not reimburse (eg, treatment planning, pharmacy facilities), and helping with bad debt remaining when patients cannot pay their 20% Medicare coinsurance. ASCO’s interim executive vice president Joseph S. Bailes, MD, concurred with most of these points.

COA is urging community oncology practices to submit written testimony about these issues. The subcommittee is accepting written testimony until July 27. Instructions about how to submit testimony are available on the subcommittee’s website.

CMS to Require More Data for Claims Payment

Providers sometimes will need to submit more patient data for claims payment so that the Centers for Medicare & Medicaid Services (CMS) can collect data for its Coverage with Evidence Development (CED) program. The revisions are part of changes to the National Coverage Determinations (NCDs). These modifications are now official, having been posted in draft form for comments on April 7, 2005. CMS made revisions based on public comments received before releasing this official CED guidance document.

The CED program generates data about the utilization and impact of the item or service so that Medicare can document the appropriateness of the item or service’s use, consider future coverage changes, and obtain clinical information to improve the evidence base upon which providers base their recommendations to patients. CED collects data in part to document outcomes of various services and items.

According to the official document, CMS may issue an NCD requiring that data be sent to a centralized database or registry. CMS also created 2 categories of CED – Coverage with Appropriateness Determination (CAD) and Coverage with Study Participation (CSP). A CAD is applicable when the item or service in question is deemed qualified for coverage but additional clinical data is needed to ensure that the item/service is provided appropriately. CSP allows coverage of certain items or services for which there is inadequate evidence to support reimbursement—if CMS determines that data-gathering in a clinical practice situation would yield important information about how the service or item affects beneficiaries’ health.

CMS already conditions Medicare coverage upon registry participation in 6 circumstances: PET for Alzheimer’s, PET for brain, cervical, ovarian, pancreatic, small-cell lung, and testicular cancers, implantable cardiodefibrillators, cochlear implants, an NIH colorectal cancer trial, and an NIH home oxygen trial. The CMS website lists more information about these requirements.

How Are Your Peers Coping With Medicare? COA Reports

Nearly 50% of practices submitting data to the Community Oncology Alliance (COA) reported sending at least 6 patients per week to a hospital for chemotherapy due to changes in Medicare reimbursement. This is one of several findings from data that COA has collected since February 2006.

COA posted a short survey on its website about 5 months ago and invited members to complete it weekly to document the impact of Medicare reimbursement policies on access to cancer care. A total of 139 practices in 37 states submitted responses at some point during the 5 months or so that data collection has occurred. Findings as of June 30 appear on the COA website and include the following:

• About 45% (62) of practices submitting data reported experience delays in scheduling patients for chemotherapy at other facilities.
• About 62% (86) of practices reported pre-certifying Part D medication; the others do not.
• About 37% (51) of practices reported patients being denied medication through Medicare Part D. Another 23% (32/139) are unsure; the rest report no denials.
• Most (86%; 119/139) practices have hospitals in their communities to which they can refer Medicare patients for chemotherapy. Practices in rural areas commonly do not have hospitals to which they can refer patients.
• Virtually all practices reporting to COA still accept Medicare patients (137/139). About 16% (23/139) do not accept Medicare patients without secondary or Medigap insurance.

CMS Proposes MD Fee Schedule Changes: Who are the New Winners and Losers?

The Centers for Medicare & Medicaid Services (CMS) has proposed changes in the relative value units (RVUs) affecting payment for physician services to Medicare beneficiaries. It also has put forth a revised method for calculating practice expenses. These changes are scheduled to take effect January 1, 2007.

The changes include a proposed increase in “evaluation and management” services reflecting time spent with patients. For example, the work component for RVUs associated with an intermediate office visit – the most commonly billed physician service – would increase by 37%.

The law requires a budget neutrality adjustment for Medicare if proposed changes exceed $20 million. The proposed work RVU changes alone would raise expenses by roughly $4 billion, according to CMS estimates. The agency therefore has suggested creating a budget neutrality adjuster applied to only the work RVUs. CMS has proposed a 4-year transition to the new practice expense RVUs.

What does this mean for physician practices? Practice Manager Insider board member Larry A. Oday explains, "the statutory constraint of budget neutrality puts CMS in a bind. Although CMS tries to be fair about the process, there are inevitably winners and losers. No other result is possible. If it is the right thing to do to increase payment for the E&M codes, why should other codes be cut to accommodate that?" Oday is also a partner in Vinson & Elkins LLP, a Washington-based law firm, and a former official at the Health Care Financing Administration.

How does oncology fare in this zero sum game? Oday analyzed the proposed rule for PMI readers. CMS projects that hematology/oncology that at full implementation of the changes in 2010, hem/onc’s reimbursement for work RVUs will rise by 3%. Its payment for practice expenses will fall by 1%. Overall, the combined impact of the proposed changes yields a net 2% increase, according to Oday.

Impact of work RVU changes for radiation oncology will result in a decrease of 2% but practice expense RVUs are expected to climb by 4%. This yields an estimated combined impact of +2%.

CMS is accepting comments about the proposals until August 21, 2006.