'Major Changes Ahead': Reimbursement Tips From ASCO 2016

Cary A. Presant, MD


July 12, 2016

The annual meeting of the American Society of Clinical Oncology (ASCO) is a milestone event during which previously embargoed results of important clinical trials are revealed. Many of these are practice-changing.

However, the annual meeting is increasingly a time when national leaders and government executives discuss the future of oncology and enlighten oncologists about what progress or problems have occurred in the preceding months. Perhaps even more than the science, these discussions will be truly practice-changing.

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Dr Cary Presant provides a brief summary of the major issues in reimbursement and practice management presented at ASCO 2016.

The ASCO Pre-conference on Economics

At the pre-ASCO session on Economics of Cancer Care, presentations focused on financial burdens on patients and the impact of patient bankruptcy, which is associated with shortened survival; the new ASCO practice survey results; and experience with shared savings models.

The first tip: Consider attending the economics pre-conference next year to help evaluate how well your practice has been adapting to the challenges posed by the changes in oncology. After 2 years of attending, I can assure you that many of your subsequent discussions and decisions throughout the year will use information from this conference. You can also develop relationships with experts, who have been faculty at the sessions, to get further personal help with your challenges.

MACRA and MIPS Are Your New Regulations for Payments

By law, every practice will be governed by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the Merit-Based Incentive Payment System (MIPS) beginning in 2017. These payer rules will apply to government-insured payments like Medicare, but elements will probably be adapted by private insurers as well. MACRA is the statue which requires practices either to be participating in MIPS to measure payment metrics, or to be in an alternative payment model (APM) such as bundled payments, an accountable care organization (ACO), or the Oncology Care Model (OCM) from the Centers for Medicare & Medicaid Services (CMS). MIPS combines Physician Quality Reporting System (PQRS), meaningful use, Quality and Resource Use Reports (QRUR) metrics, and clinical practice improvement documentation into one new score. Practices well above the mean score will receive a bonus, while practices well below the mean score will have reduced payments. The MACRA and MIPS programs, as discussed by Phillip Stella, MD, medical director of the Oncology Program at the St. Joseph Mercy Hospital Cancer Center in Ann Arbor, Michigan, should induce practices, oncologists, and administrators to immediately become aware of the metrics already being recorded on each physician and practice to determine what changes must be made. At several ASCO educational meetings, ASCO was urging participation in the ASCO Quality Oncology Practice Initiative (QOPI) and ASCO Patient-Centered Oncology Payment (PCOP) programs, but it is unclear if these programs will be accepted in part or at all by CMS as quality measures, or even as an APM for 2017. Proposed implementation rules for MACRA have just been published, and final rules are expected in November 2016 for implementation in 2017. So this year you should be continuously aware of what rules have been finalized so that you can decide how your practice will respond.

Tips on MACRA and MIPS: You should know your PQRS, meaningful use, and QRUR scores, so review to know how you are doing. If you are not able to improve your scores, perhaps merging with other practices or joining a hospital network or a university system could be considered to improve your performance and avoid reduced payments. Be sure to follow articles on Medscape and in oncology journals, and also get information through state oncology societies and ASCO to be fully prepared for the implementation requirements for MACRA. Robin Zon, MD, vice president and senior partner at Michiana Hematology-Oncology, PC in South Bend, Indiana, emphasized several important preparations that practices should make over the next months. Her suggestions were to participate in PQRS (the CMS quality reporting system), improve your meaningful use performance by having patients use your portal, reduce hospitalizations when possible, see when you can use generics in place of single-source drugs, code for all ICD-10 comorbidities in each patient so that CMS knows how complex your patients really are, and have a practice leadership team (physician, nurse, administrator, and medical assistant) to get ready for 2017.

Oncology Cost Savings

The cost of oncology care is very high. This is mostly driven by the costs of hospitalizations, emergency room visits, and end-of-life care, as well as by drugs. Finding opportunities to save costs, while generally important to all practices—the American College of Physicians has determined that all physicians should be making decisions as stewards of global healthcare costs—may be particularly important for practices participating in APMs where there are shared risk and savings arrangements.

Considerable healthcare savings may be realized by implementing early palliative care. Reviewing multiple randomized trials of early palliative care versus conventional care, Thomas J. Smith, MD, professor of oncology at Johns Hopkins University School of Medicine and director of palliative medicine for Johns Hopkins Medicine, noted that savings of 10%-25% ($200-$7000 per patient) have been realized. Early use of hospice reduced costs by $9000 per patient and extended survival by 29 days.

A study presented by Mark W. Knestrick, Jr. MD, PharmD, a recent graduate of the West Virginia School of Medicine Hematology/Oncology Fellowship Program, showed that using physician orders for the scope of treatment (POST) during end-of-life care increased hospice use to 54% from 27% and reduced in-hospital deaths to 11% from 30% when compared with standard advanced directives. In abstract 6505, Marcus Neubauer, MD, director of oncology services at McKesson Specialty Health in Seattle, Washington, showed that in practices that used value-based NCCN pathways, there was 84% adherence to pathways, 93% patient satisfaction, and a 57% increased use of hospice. Of note, he observed reduced spending by 20% in chemotherapy costs, by 15% in inpatient care, and by 18.5% overall compared with benchmark costs derived from administrative claims data in a matched cohort. Also, in abstract 6507, Manali I. Patel, MD, an assistant professor of medicine at the Palo Alto Veterans Affairs Health Care System, demonstrated that using lay health workers to help patients navigate the Veterans Affairs health system resulted in cost savings of $11,000 (9%) per patient and increased use of hospice 40% (vs 23% without navigation), with equal survival.

Cost savings tips: If you are in a shared-risk APM or if you want to reduce your MIPS and QRUR metrics, consider using value-based pathways and implementing palliative care and/or hospice early in your patients. Always monitor your hospital utilization, because not only are costs high, but patients also usually prefer care at home.

Drug Costs

Costs for oncology chemotherapy treatments in the United States are very high. In abstract LBA6500 Daniel Goldstein, MD, an adjunct assistant professor at Emory University in Atlanta and a senior physician at Davidoff Cancer Center in Petah Tikva, Israel, showed that in the United States, the retail price of patented drugs was $8694 per month, compared with $654 for generic drugs.

Managing and using such high-cost drugs has been an important part of oncology practice. While the margins gained by oncologists have helped to pay for the costs of complex oncology care, these margins may be disappearing.

The impacts of sequestration and proposed ASP reductions in payment may be devastating for practices.

The impacts of sequestration and proposed average sales price (ASP) reductions in payment may be devastating for practices by pushing more oncology drugs "under water" and necessitating consideration of alternate sites of administration (eg, hospital outpatient departments) or alternative treatment plans. Ron Kline, MD, a medical officer with the Center for Medicare & Medicaid Innovation at CMS, presented further details on the OCM, which has accepted many practices across the country in the competition to participate. The OCM will be tabulating the use of all healthcare costs, which of course includes high-cost drugs and which will be an obstacle to receiving shared savings.

Tips: In every practice, monitor the monthly costs of drugs which are used to clarify which drugs are under water. Consider alternative treatments that can produce equal patient outcomes at lower cost, and consider alternative delivery methods (hospital outpatient departments or specialty pharmacies).

Value of Oncology Care and Pharmaceuticals

Because healthcare payments are increasingly focused on value purchasing, many groups are examining value calculation in oncology, including ASCO. According to the ASCO value equation, as discussed by Lowell Schnipper, MD, PhD, chief of hematology/oncology at Beth Israel Deaconess Medical Center in Boston, who chaired ASCO's Value in Cancer Care Task Force, net health benefit is calculated on the basis of clinical benefit (80% of the benefit as measured by phase 3 studies of survival, progression-free survival, and response; plus a bonus for extended survival; plus a bonus for symptom control; minus a penalty for grade 3 or 4 toxicity). This is divided by the costs to the system and the patient. Examples were provided.

However, in the ASCO calculations, no corrections are made for the perceived value to the individual patient, which varies widely (adjuvant therapy–treated patients may value individual therapies differently from palliative therapy–treated patients). Also, the ASCO model is not the only model for value; ESMO, NCCN, ICER, and Memorial Sloan Kettering's DrugAbacus are others. Oncologists cannot at present know how insurers and health systems will respond to these innovative value determinations, but value likely will affect which treatments are available for our patients and how we and our profession will be viewed by patients and the public.

Value-of-care tips: Follow value publications in the oncology journals. Be sure to carefully consider toxicities in choosing palliative regimens and to control toxicities in all patients, but in adjuvant therapies in particular, because some of those toxicities can be lifelong.


As emphasized at ASCO 2016, now is the time for all oncologists, regardless of their practice site (solo, group, hospital, or academic center) to be aware of the huge changes taking place in practice mergers and acquisitions, payment for services and drugs, practice metrics, and patient outcomes. Consider attending ASCO meetings not only for science but also for business discussions. Use Medscape, state society meetings, networks, journals, and consultants to help you manage these changes, or the changes may dramatically threaten your practice's existence or your professional satisfaction.

The opinions expressed are those of Dr Cary Presant and do not reflect the opinions of City of Hope or any other organization.


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