Practice Manager Insider

CMS Posts Second Quarter Medicare Part B ASPs, Provider Updates

The average sales price (ASP) used to calculate what Medicare pays providers for Part B drugs has been posted on the Centers for Medicare & Medicaid (CMS) website. The ASP is recalculated each quarter based on sales and price data from pharmaceutical manufacturers.

CMS reports that a comparison of the second quarter 2006 with prior quarters reveals that most drug prices have remained stable. For most of the higher volume drugs (36 out of the top 50), the payment amounts changed 2 percent or less, and for 32 of these drugs the change is about 1 percent.

Click here for a CMS page including multiple downloads, including the April 2006 ASP pricing file.

CMS also has posted second quarter provider updates. Click here for the page listing links to the updates.

Have Your Say about Medicare Coverage – Join the Medicare Coverage Advisory Committee

The Medicare Coverage Advisory Committee (MCAC) is looking for a few good members -- specifically, 50 members. MCAC advises the Centers for Medicare & Medicaid Services (CMS) about the adequacy of the scientific evidence used in determining whether certain medical items and services are reasonable and necessary under the Medicare statute. MCAC performs only an advisory function; final decisions rest with CMS.

MCAC members are chosen by the Secretary of the Department of Health and Human Services, or that person’s designee, from among authorities in several fields. These include administrative medicine, healthcare data, information management and analysis, patient advocacy, and healthcare economics, among other backgrounds. Persons involved in all clinical medicine specialties, medical ethics, epidemiology, biostatistics, and trial design methodology are also welcome.

The committee reviews and evaluates medical literature and other documents regarding products or services eligible for coverage or covered under Medicare. The positions will open as of December 2006. Three openings are for nonvoting consumer representatives, and four are intended for nonvoting industry representatives. Click here to learn more about the documentation required for nomination. Click here for more information about MCAC.

So, if you wish to influence coverage decisions, nominate yourself or urge someone you respect to seek membership! Nominations must be postmarked by April 23, 2006 and mailed to the following address:

Michelle Atkinson, Executive Secretary, Centers for Medicare and Medicaid Services, Central Building 01-09-06, 7500 Security Boulevard, Baltimore, MD 21244. Contact Ms Atkinson at Michelle.Atkinson@cms.hhs.gov, 410-786-2881.

Will NCCN’s Drug Compendium Become a Source for Off-Label Coverage Determinations?

The Medicare Coverage Advisory Committee is meeting tomorrow, March 30, to consider whether to add a third source of information regarding coverage for off-label uses of anticancer medications. Practice Manager Insider will follow up on this story next week.

The law allows three drug compendia to be used in determining the “medically accepted indication” of agents used off-label in chemotherapeutic regimens. One of these, American Medical Association Drug Evaluations, is no longer published. The National Comprehensive Cancer Network (NCCN) is seeking recognition for its publication, NCCN Drugs & Biologics Compendium™. This resource is based on NCCN recommendations and practice guidelines, as well as FDA-approved uses. The NCCN guidelines are already an accepted tool in the 2006 CMS oncology demonstration project.

The other two compendia approved as sources for off-label coverage determinations are American Hospital Formulary Service Drug Information, and United States Pharmacopeia Drug Information. The latter will cease publication under that name and continue under a new name.

MedPAC: Limiting Patient Cost Sharing “Merits Further Study”

A Medicare Payment Advisory Commission (MedPAC) report to Congress expressed concern about Medicare patients’ growing and unlimited out-of-pocket costs for drugs used in cancer therapy. The commission found no cases where beneficiaries could not obtain chemotherapy but did note that persons without supplemental insurance were more likely to receive chemotherapy in hospital outpatient departments rather than in their oncologist’s office. Some oncology practices surveyed by MedPAC had stopped office-based treatment of Medicare patients without supplemental insurance, sending them to hospital outpatient departments or safety net facilities. Oncology practices that MedPAC visited estimated that 5% to 20% of their Medicare patients lack supplemental coverage, according to this report.

Practices also recounted instances in which a patient refused treatment in order to avoid traveling to a hospital or leaving their family with debts for out-of-pocket medication expenses, the report said. Some patients told the commission that they were concerned about exceeding lifetime caps on their retiree coverage.

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.

MedPAC noted that unpaid patient out-of-pocket costs become bad debt. Medicare pays 70% of hospital bad debt but does not cover such costs to physician practices, the report said. It concluded that changing benefit design to limit cost-sharing liability for cancer patients and others with sizable health care expenses “merit(s) further study.”

“This is an important recognition by MedPAC of the bad debt issue faced by physician practices,” said Practice Manager Insider editorial board member Elaine L. Towle, CMPE. Oncology organizations, practices and lobbyists have presented this information to Congress and to the Center for Medicare and Medicaid Services in the past, noted Towle, program director at Oncology Metrics. “Having it acknowledged by MedPAC is satisfying, and sends an important message to Congress,” she added.

How Oncologists Have Adapted to Medicare Payment Changes: A View from MedPAC

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.”

MedPAC Recommendation: Don’t Pay for Demonstration Projects

The Medicare Payment Advisory Commission’s (MedPAC) recent report to Congress recommended that Congress and the Centers for Medicare & Medicaid Services (CMS) should use demonstration projects not to increase payments and make payment policy but to test innovations in health care. The report evaluated the effects of changes in how Medicare pays for drugs administered by oncologists. Panelists noted that the 2005 quality of life demonstration project added about $200 million in payment to providers. Many physicians reported to MedPAC that they did not believe that the 2005 demonstration project would improve quality of care or provide useful information, but noted that demonstration project payments enabled them to continue to care for Medicare patients.

Practice Manager Insider editorial board members Larry A. Oday and Elaine L. Towle, CMPE, concurred with this advice. “Payment for demonstration projects is good incentive for participation,” said Towle, program director at Oncology Metrics. But “the current Medicare payment system needs fundamental change, not year-to-year Band-Aids in the form of demonstration projects.”

Oday, a Washington-based health care attorney, had this comment regarding the demonstration projects: “CMS is abusing its authority. If it can [use its authority] to give money, it won’t hesitate to use it to take money away. Demos are, by definition, an experiment. They are not to be used for political pork barrel.”

MedPAC also recommended an exception to the Competitive Acquisition Program (CAP) oncology drug delivery rules for rural practices. Under the existing rule, drugs must be delivered to the site where the medications will be administered. Rural practices often administer drugs in satellite offices at which they cannot receive and mix medication. MedPAC recommended that CMS allow such practices to accept drug deliveries at their main offices so that they can participate in the CAP.

Towle predicted that this will have limited effect on CAP participation. “While I believe that very few medical oncologists will choose to participate in the CAP program, the recommendation regarding rural practice sites may influence this decision for some,” said Towle.

Series: MedPAC Issues Recommendations in a Report to Congress

Following a request by Congress to evaluate the effects of changes in how Medicare pays for drugs administered by oncologists, the Medicare Payment Advisory Commission (MedPAC) issued three recommendations in its recently released report. Practice Manager Insider will publish a series of posts about the report’s findings, along with comments and analysis from our distinguished editorial board of experts in the business of oncology. We look forward to reading your comments.

Budget Bill Caps Payment for Office-based Imaging as of 2007

A provision of the federal Deficit Reduction Act of 2005 limits reimbursement for imaging services performed in a physician office to the lesser of the hospital outpatient or the physician office payment schedule. This means that physician offices will be reimbursed at the hospital outpatient prospective payment system rate if that is less than the physician Medicare fee schedule payment, according to the Society for Nuclear Medicine. This applies to the technical (as opposed to the professional or interpretative) component of payment.

The change applies to molecular and nuclear imaging—including positron tomography, X-rays, ultrasounds, magnetic resonance imaging, computed tomography, and fluoroscopy—but excludes diagnostic and screening mammography, according to the bill. The Society of Nuclear Medicine opposes this provision. President Bush signed the Deficit Reduction Act on February 8, 2006 and it takes effect January 1, 2007.

CMS Approves PET Registry; Expands Medicare Coverage of PET

CMS approval opens the door to Medicare coverage of positron emission tomography (PET) scans for a much wider array of cancers and indications. Examples of newly covered indications for PET scanning include brain, cervical, ovarian, pancreatic, small cell lung, and testicular cancer. The start date for patient registration will be announced soon; CMS approval was a prerequisite for that.

The National Oncologic PET Registry (NOPR) was developed in response to a CMS proposal to expand PET coverage if the patient’s referring physician and the imaging provider submit data to a clinical registry. NOPR is that registry. The registry will assess the impact of PET with F-18 fluorodeoxyglucose (FDG-PET) on management of oncology patients. Once the project is activated, referring physicians will complete short surveys before and after the PET scans. The PET facility will electronically transmit the scans to the NOPR database. NOPR investigators will assess the effect of PET scans on referring physicians’ plans for patient management, and report findings to CMS. The American College of Radiology Imaging Network (ACRIN) Biostatistics Center at Brown University will provide data analysis support.

NOPR received input from, and is endorsed by, the American College of Radiology, the American Society of Clinical Oncology, and the Society for Nuclear Medicine. NOPR worked with CMS to develop the registry.

Genomic Health Says Medicare Will Cover Oncotype DX

Genomic Health’s Oncotype DX is a laboratory test that quantifies the likelihood of breast cancer recurrence in women with certain types of early-stage invasive breast cancer. The coverage decision covers women with node-negative breast cancer who have estrogen-receptor-positive tumors. The test must be used within 6 months of diagnosis. Intent to treat or not treat with adjuvant chemotherapy should be contingent, at least in part, on the test results. Coverage is scheduled to become effective for claims deriving from services performed on or after February 27, 2006.

The decision was issued by the National Heritage Insurance Company (NHIC), the contractor administering Medicare programs in California. Medicare bills for Oncotype DX are billed through NHIC because the test is conducted by Genomic Health in its Redwood City, CA, clinical reference laboratory.

Genomic Health announced on January 27 that the FDA has invited the firm to a meeting in order to discuss the regulatory status of the company’s technology. Oncotype DX entered the market in 2004. The FDA had indicated in December 2004 and in 2005 that it was evaluating whether Oncotype DX was subject to premarket regulatory review.