Consolidated Payments for Oncology Care: A Patient-Centered Model. Jeffery Ward, MD Swedish Cancer Institute Chair, ASCO Payment Reform Workgroup

Transcription

1 Consolidated Payments for Oncology Care: A Patient-Centered Model Jeffery Ward, MD Swedish Cancer Institute Chair, ASCO Payment Reform Workgroup

2 ASCO s Clinical Practice Committee Payment Reform Workgroup Anupama Acheson, MD John Cox, DO Michael Diaz, MD Omar Eton, MD James Frame, MD Karen Hagerty, MD Denis Hammond, MD Dan Hayes, MD John Hennessy Andrew Hertler, MD Don Moran Roscoe Morton, MD Ray Page, DO Kavita Patel, MD Charles Penley, MD Blase Polite, MD Christian Thomas, MD Jeffery Ward, MD Robin Zon, MD Dan Zuckerman, MD 2

3 Potential Approaches to Sustainable, Long-Lasting Payment Reform in Oncology The Quality Oncology Practice Initiative (QOPI) Value Based Pathways Episodes of Care/Bundle Payments Care Coordination/Patient-Centered Medical Oncology Home A Chemotherapy Management Fee that gets Oncology out of the Drug Concession 3

4 Why A New Model? More is not always better Cost of care unsustainable Sustainable Growth Rate (SGR) legislation Policymakers attention 4

5 FFS Medicine: A Barrier to Personalized Care Antiquated reimbursement system that only pays for care when it involves physician touches and infusion of Drugs. Only pays for some services, failing to reimburse at all for other essential services provided in oncology offices and clinics. It fails to reward decision making that brings greater quality, efficacy, or value to the care equation. Incentivizes inefficiency and overuse of the most expensive services to maximize reimbursed services. 5

6 Why the Renewed Focus on SGR? $8,000 $9,000 Total Health Expenditure per Capita, U.S. and Selected Countries, $7,538 $8,000 $7,000 The Rollercoaster $7,662 Per Capita Per Capita Spending Spending - USD - PPP PPP Adjusted Adjusted Dec 19, $7, : Congress freezes rates for two months $6,000 March 2, 2010: CMS holds claims April 15, 2010: CMS advises physicians to hold claims June $6,000 25, 2010: Congress delays cut until November 30 $5,003 $5,000 Nov 30, 2010: Congress freezes rates for one month $4,627 Dec 15, 2010: President signs bill for one-year delay to 25 percent cut Feb 17, $5, : Congress delays cut with 10-month patch Feb 22, 2012: Congress delays until Jan of 2013 Jan 1, 2013: Congress delays for one year $2,729 $2,870 $2,902 $3,129 $3,353 $3,470 $3,677 $3,696 $3,970 $4,063 $4,079 $4,810 $4,000 $3,737 $4,491 $4,290 $3,995 $4,033 $4,045 $4,000 $3,000 $3,456* $3,476 $3,560 $3,345 The Score $3,011 $3,220 $3,000 $2,000 The SGR Fix $2,477 is on sale $2,507* Score recently reduced from $350 billion to $139 billion $2,000 $1,000 $1,000 $0 $0 Source: Organization for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (databasehttp:// (Accessed on 3 September 2014). * 2011 stats provided 6

7 Total Na(onal Health Expenditure, Select Calendar Years Source: CMS Data Compendium, 2011 Edition. Table II.9. Available at DataCompendium/2011_Data_Compendium.html 7

8 Costs of Cancer Care Rising Faster than Overall Healthcare Cancer Drugs Cumula(ve % Increase Healthcare Cancer Medical US GDP Source: Blue Cross Blue Shield Association 8

9 Why the Renewed Focus on SGR? The Rollercoaster Dec 19, 2009: Congress freezes rates for two months March 2, 2010: CMS holds claims April 15, 2010: CMS advises physicians to hold claims June 25, 2010: Congress delays cut until November 30 Nov 30, 2010: Congress freezes rates for one month Dec 15, 2010: President signs bill for one-year delay to 25 percent cut Feb 17, 2011: Congress delays cut with 10-month patch Feb 22, 2012: Congress delays until Jan of 2013 Jan 1, 2013: Congress delays for one year Jan 1, 2014 Congress passed 3 month bridge to work on Consensus Bill The Score The SGR Fix is on sale Score recently reduced from $350 billion to $139 billion 9

10 Compromise Bill HR 4015/S 2000 Repeals SGR immediately Provides positive annual update of.5% for five years ( ) Streamlines current incentive payments into new system, the Merit-Based Incentive Payment System (MIPS) Creates process for quality measures Provides 5 percent incentive payment for physicians in Alternative Payment Models Provides funding for technical assistance to small practices of 15 or fewer professionals for performance improvement Elevates the role of QCDRs 10

11 But how do you pay for it? Policy has bi-partisan support Support of Committees Endorsed by physician community.score of 138+ billion.in an election year 11

12 What we hoped would happen 12

13 What actually happened 13

14 Consolidated Payments for Oncology Care: A Patient-Centered Model Monthly Payments Adjustments for Quality Measures Adjustments for Pathway Utilization Adjustments for Resource Utilization Rewards for Clinical Trial Participation 14

15 What About Drugs Reforming cancer care reimbursement is not complete as long as Buy n Bill remains Reform will need to account for impact on infrastructure that brings drugs to practices Delay in addressing ASP+6% is an acknowledgement of reality, not hypocrisy 15

16 Monthly Payments New Patient Treatment Month Non-Treatment Month Transition of Treatment 16

17 Current vs. Proposed Payments E&M (new patient) E&M (established patient) Consultations Chemotherapy administration therapeutic injections & hydration New patient Treatment month Active Monitoring Month Non-treatment month 6% of ASP+6% could be folded into treatment month payments once an alternative to buy and bill is developed and sufficiently tested. 17

18 Payment Levels New payments do not track directly with existing CPT codes they are intended to cover services that are not compensated today New aggregate revenue would be no less than aggregate amount of current revenue, for typical oncology practice Relative sizes of payments reflect relative amount of time and cost incurred 18

19 New Patient Payment Single payment Includes patient evaluation, treatment planning, patient education Diagnostic testing paid separately 19

20 Treatment Month Payments Single payment each month patient receives treatment (IV or oral) 4 Levels of payment based on a blending of patient and regimen complexity`- May receive both a treatment month payment and a new patient payment in the same month 20

21 Active Monitoring Month Payments For patients not receiving active anti-cancer therapy (e.g. treatment holiday or completion) 2 levels of payment Higher for months immediately following end of treatment Lower for patients on long-term monitoring 21

22 Transition of Treatment Payment Patient beginning new line of therapy or ending treatment with no further treatment planned Reflects time involved in treatment planning and patient education 22

23 Services and Payments for Stage III Colon Cancer TREATMENT REGIMEN Treatment Planning Infusion 1 Infusion 2 Infusion 3 Infusion 4 Infusion 5 Infusion 6 Infusion 7 Infusion 8 Infusion MONTHS CURRENT PAYMENT E&M Chemo Admin Chemo Admin E&M Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin Chemo Admin E&M E&M E&M Infusion 10 Infusion 11 Infusion 12 Surveillance PROPOSED PAYMENT 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP 6% ASP New Patien t Pmt Treatment Month Payment 6% of ASP 6% of ASP 6% of ASP 6% of ASP 6% of ASP 6% of ASP Treatment Month Payment Treatment Month Payment Treatment Month Payment Treatment Month Payment Treatment Month Payment TransiCon of Treatment Pmt Monitor Mo.Pmt Monitor Mo.Pmt Monitor Mo.Pmt 23

24 Services and Payments for Stage IV Non-Small Cell Lung Cancer TREATMENT REGIMEN Treatment Planning 1 st Line Cycle 1 1 st Line Cycle 2 Response EvaluaCon 2 nd Line/Cycle1 2 nd Line/Cycle2 Response EvaluaCon 2 nd Line/Cycle nd Line/Cycle4 2ndLine/Cycle5 CURRENT PAYMENT Response EvaluaCon E&M Chemo Admin 6% Chemo Admin 6% E&M Chemo Admin 6% Chemo Admin 6% E&M Chemo Admin 6% Chemo Admin % 6 Chemo Admin 6% E&M PalliaCve Care E&M Hospice PROPOSED PAYMENT E&M New Patien t Pmt Treatment Month Payment Treatment Month Payment Transition of Treatment Pmt 6% of ASP 6% of ASP 6% of ASP 6% of ASP 6% of ASP 6% of ASP Treatment Month Payment Treatment Month Payment Treatment Month Payment Transition of Treatment Pmt Treatment Month Payment Monitor Mo.Pmt Monitor Mo.Pmt 24

25 Consolidated Payments for Oncology Care: A Patient-Centered Model Monthly Payments Adjustments for Quality Measures Adjustments for Pathway Utilization Adjustments for Resource Utilization Rewards for Clinical Trial Participation 25

26 Transition to New Payment System Transition of several years 1st year: loss of payment under new system compared to old system would be capped at 3%; revenue increase likewise capped at 3% 2nd & 3rd years: increase in permissible gain/loss 26

27 Payment Adjustments: Quality Measures Phase 1: Payments increased for practices collecting and submitting standard set of measures (amount of increase should at least cover costs of data collection) Phase 2: Payments increased for practices that meet minimum level of quality; payments reduced for practices that do not submit data Phase 3: Payments increased for practices that exceed minimum level of quality, larger increases for significantly higher scores; payments reduced for practices not meeting minimum quality thresholds 27

28 Payment Adjustments: Pathways Phase 1 Phase 2 Payment levels increased (per patient) if practice follows pathway, and adherence to pathway is at or above minimum expected level Payment levels reduced if pathway exists and practice doesn t use Medicare establishes a process for certifying pathways Payment levels increased for practices using certified pathways with adherence at or above minimum expected level Payments levels reduced if certified pathway exists and practice does not use it 28

29 Payment Adjustments: Resource Utilization Phase 1 Phase 2 Payment levels increased for practices that meet oncology medical home standards, OR Who have lower than average rates of avoidable ER visits and hospital admissions Payment levels increased for practices with lower than average rates of avoidable ER visits and hospital admissions Payment levels reduced for practices with significantly higher than average rates of avoidable ER visits and hospital admissions 29

30 Payment Adjustments: Clinical Trial Participation Practices receive higher Treatment Month and Non-Treatment Month payments for patients in clinical trials Intended to offset the additional time and costs associated with patient monitoring 30

31 Continued FFS Payments Laboratory tests Bone marrow biopsies Portable pumps Blood transfusions Bone Marrow Transplant Benign Hematology (list not all inclusive) 31

32 Let s Talk About the Drugs ASP + x Invoice and Management Fee Least Costly Alternative Bundling the Drugs The European Model Move Part B drugs to Part D Resurrect Competitive Acquisition Program Value Based Purchasing Algorithms 32

33 ASP+x: The Good Incentive to providers to seek the lowest price for a given drug Better than AWP Saved CMS $$, 800 M in first year alone Manufacturers are aware that purchasers of singlesource drugs paid under ASP+6 can only tolerate small increases in price, otherwise drug is underwater due to six month lag Competition amongst multi-source (generic) drugs drives prices down 33

34 ASP+x: The Bad Underwater drugs threaten private practice with dramatic movement to patients and/or docs to hospital based practice. Because after-market price increases for single-source drugs are limited, market introduction prices grow progressively more insane. The last 10 oncology drugs introduced to market cost ~$10,000/month or $100,000/year. The inability to respond to market forces without a drug going underwater, may be a contributing factor to the many drug shortages in the generic drug market. Buying power rules. Small practices lose. Drives consolidation and hospital acquisition of practices. It is a favorite target of politicians every time cutting costs in Medicare is discussed. 34

35 ASP+6: The Ugly It is an incentive to use more expensive drugs Political Achilles heal for Oncology Providers Some studies show changes in prescriber behavior in response to changes in drug reimbursement, but not UHC demo project We are in desperate times. Desperate men and women do desperate things. 35

36 Invoice and a Management Fee All alternative acquisition price benchmarks: AWP, WAC, WAMP, AMP, NADAC all have similar failings to ASP Management Fee developed to = current 6% of ASP and tied to index of general healthcare costs; not tied to cost of drugs or wrvu Invoice reimbursement offers no Price Shopping incentive No six month lag = no disincentive to price increases High cost to billing and drug distribution infrastructure 36

37 Least Costly Alternative Worked for LHRH agonists Deemed illegal by the courts Championed by Peter Bach using metastatic NSCLC example MedPAC s baby Predicated on assumption there is a comparator How do you define more effective? Requires a lumping of disease states that is at odds with molecular diagnostics and personalized medicine 37

38 DRG for Drugs: Bundles Theoretical economists love it Big disincentive to use expensive drugs Big disincentive to treat at all Would require frequent recalculation for both drug price changes and entry of new drugs into market Underwater bundles Logistical nightmare as cancer becomes molecularly subdivided into thousands of diagnoses compounded by stage and line of therapy. 38

39 The European Model: Government Negotiated Drug Pricing Cede negotiating power to the Secretary of Health and Human Services Proven track record and a number of variations to model after Commercial Insurers could follow suit Should result in substantial price reductions and savings Could lead to stagnant investment in pharmaceutical innovation Un-American? Political viability and sustenance of this approach given current US Congress is not fathomable 39

40 Medicare Part B to D Political appeal given that it uses competitive market forces to drive down pricing Political appeal given Part D s popularity Some commercial markets are already turning to specialty pharmacies and white bagging Recent CBO report suggests Part D s market clout does not extend to branded drugs and unclear that PBM s and third party payers will wring savings out of single source oncologics Patient financial burden could prove an obstacle to cancer care 40

41 CAP: Why Didn t It Work Congress (Bill Thomas) built it on a shoestring budget Practices gave up drug margins and got nothing in return: At its peak only 1400 physicians and very few oncologists participated Predicated on competing vendors: Only BioScrip signed a contract, and withdrew after three years citing unacceptable short and long term profit risk Cost more than ASP+6: In part because CAP vendor s reimbursement was inflation adjusted, avoiding 6 month lag impact CMS shut it down after 42 months 41

42 CAP: Could It Work? The ethos and ecology of oncology practice is changing, such that CAP may be perceived quite differently than a decade ago It will require upfront investment to provide vendors with adequate reimbursement for administrative burdens and risk This upfront investment cannot come out of current oncology reimbursement and keep practices solvent Predicated on having faith that the investment will result in lower prices and ultimate savings 42

43 Value Based Algorithm First there was Choosing Wisely Now there is the ASCO Value in Cancer Care Task Force The society of oncologists, alarmed by the escalating prices of cancer medicines, is developing a scorecard to evaluate drugs based on their cost and value, as well as their efficacy and side effects. It is expected to be ready by this fall. (NYT 4/17/14) Any drug reimbursement model could be modulated to incorporate value based pricing 43

44 Closing Thought #1 FFS reimbursement and the role that it plays in the current US health care crisis is medicine s dark secret. FFS has been largely closeted and occasionally vigorously defended by physicians and the organizations that represent it; it is time to open the current model to scrutiny, recognize how incongruent it is to the future on cancer care, and replace it. 44

45 Closing Thought #2 The danger in failing to answer this call, or more particularly in choosing to stonewall change, is that other interested parties insurers, pharmaceutical companies, think tank health care economists, and hospital and primary care driven accountable care organizations will decide how oncology is to be valued and reimbursed. Only oncologists from all settings (private practice, community hospital based, and academic), have the necessary collective knowledge to build a reimbursement system that will allow for the promise of personalized cancer care. It is essential that we give the same attention to reforming the cancer care payment system that we do to developing new therapeutics. We are ready to do so. 45

46 QUESTIONS? 46