Practice Manager Insider

Are Private Payers Adopting ASP?

Most commercial insurers have not switched to Medicare’s average sales price (ASP) basis of reimbursement for physician-administered drugs, according to a report in the current issue of Oncology Now, a newsletter published by the Lash Group. Representatives of some physician practices attending local International Oncology Network (ION) conferences note that some payers are moving to ASP-based reimbursement—most commonly ASP plus 12%.

At least three Blue Cross and Blue Shield plans have adopted ASP, according to Oncology Now and Specialty Pharmacy News, Blue Cross and Blue Shield of Nebraska, Blue Cross and Blue Shield of Texas, and Anthem Blue Cross and Blue Shield of Colorado.

Elyse Freeman, RPh, PharmD, and director of private payer strategy at the Lash Group, recommends that practices analyze their costs in preparation for contract negotiations with payers – including treatment administration, pharmacy preparation, and related care management costs. It also is prudent to identify the basis of the payer’s fee schedule (eg, ASP, average wholesale price, etc.).

State Medicaid programs are starting to adopt Medicare’s ASP-plus-6% reimbursement policy, according to Oncology Now. Those who have moved to this formula include Alabama, Michigan, North Carolina, New Mexico, Ohio, Washington, Wisconsin, and West Virginia.

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.

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.

How Have Medicare Changes Affected Access to Care? Here’s a Chance to Help Find Out

Many have argued that Medicare changes will worsen cancer patients’ access to care in the community, outside of hospital and academic settings. The Community Oncology Alliance (COA) is attempting to document the impact and plans to present findings to members of Congress.

Community-based oncology practices can sign up on the COA website to participate in the data gathering. The 7-question form seeks information about whether a practice is referring out for chemotherapy due to Medicare changes, availability of chemotherapy administration facilities that do accept Medicare, whether patients have been denied medication through Medicare Part D, and whether a practice accepts Medicare patients at all. Practices are asked to specify the number of patients affected (eg, how many are referred for chemotherapy because of Medicare payment changes) and update this every week. Information will be used only in a statistical format.

About 60 practices have signed up to participate in the roughly 2.5 weeks that the link for signups has been available, said Kelli Barron, director of development and communications for COA.  COA intends to present the data to members of Congress next week. “We wanted to monitor what’s going on with the new Medicare rules,” she explained. “Everyone says it’s not working. Having hard data is a lot more effective.”

Besides quantifying the impact of Part D, the survey seeks information about changes due to the reimbursement of medications infused in the office as average sale price (ASP) plus 6% rather than average wholesale price (AWP). This long-discussed move took effect on January 1, 2006, Barron said.

Register for ASCO’s QOPI by February 15; Meet a Recertification Requirement

February 15 is the deadline to participate in the first of 2 elements of the ASCO Quality Oncology Practice Initiative (QOPI). This program involves a twice-yearly retrospective chart review using quality measures and data submitted through a secure ASCO website. QOPI was piloted in 2005; 2006 will be the first year that any ASCO member can sign up.

Participation has the benefit of satisfying the American Board of Internal Medicine (ABIM) 2006 practice performance improvement requirement for maintaining certification. QOPI is the only oncology-specific program approved to meet this requirement. Oncologists, internists, and most subspecialists certified in 1990 or later must complete a practice improvement module to maintain certification.

Oncologists using QOPI as part of recertifying would participate in the first QOPI chart review, set goals for performance improvement, and submit that information to an ABIM web page. Following the second QOPI data collection, participants report to ABIM about progress toward meeting their goals and experience with the process of implementation.