Reimbursement and Managed Care News: June 2007

By Stanton R. Mehr
Published: Wednesday, Jul 14, 2010
%u25BA High Cancer Drug Costs Altering the Research and Treatment Dynamic

The Wall Street Journal on March 15 had indicated that the costs of cancer drugs approved by the Food and Drug Administration since 2004 have ranged between $36,000 to $67,000 per patient. With managed care plans increasing patient out-of-pocket spending for these agents, the approach to bringing these agents to market and how they are used is being reevaluated.

Lee Newcomer, MD, Business Leader, Oncology Services for UnitedHealthcare, Minneapolis, stated that $354,000 may be spent to add one extra year of life expectancy to a patient with lung cancer with today’s drugs, only because “you don’t know in advance who will respond to a particular therapy.” The life-threatening nature of cancer had made questioning the utility of treatment taboo, but this may yet change. With costs this high, the question of value is important, he suggested.

In remarks at an annual meeting of the National Comprehensive Cancer Network in Florida, Schumarry Chao, MD, President of SHC Associates, Los Angeles, said that the pharmaceutical industry was beginning to take a more cautious view of bringing expensive oncology drugs to market as well. Dr. Chao commented, “The dynamic is changing. Companies are doing more market-driven research. In one case, a company decided that it would not invest $400 million in Phase III and IV clinical trials and it would pull the plug on its product” because of the likelihood that consumers would have to bear a greater load on the product’s cost.


   Panel discussion, presented at the 11th annual meeting of the National Comprehensive Cancer Network, Hollywood, Florida, March 14-18, 2007.





%u25BA $128 Million Settlement to Physicians

Twenty-three Blue Cross and Blue Shield organizations settled with physicians regarding a four-year old class-action case, claiming that business practices of managed care organizations and other insurers inappropriately delayed or denied payment to providers.

The case, based in Miami federal court, is related to another class action case that was settled from 2003 to 2006, resulting in payments of up to $405 million to physicians. In this case, the Blue Cross and Blue Shield plans are ponying up $128 million and agreeing to change their payment practices, including streamlined claims communications between insurers and the clinicians’ offices. The settlement includes oncologists among the hundreds of thousands of physicians across the country involved in the class action.

The only remaining actions on this wide-ranging litigation are possible settlement of the remaining 10% of Blues plans that did not agree to join, and an appeal of a decision by the federal judge, Federico Moreno, to dismiss the class-action claims against the number 1 national insurer, UnitedHealthcare, and multistate insurer, Coventry Health.





%u25BA Coinsurance Change for Medicare Beneficiaries for Colon Cancer Screening

The Centers for Medicare and Medicaid Services recently announced a change in how sigmoidoscopies and colonoscopies are reimbursed when performed in certain settings.

A 25% beneficiary coinsurance will now be required for flexible sigmoidoscopies and colonoscopies when conducted in hospital outpatient and ambulatory surgical center settings not billed under the outpatient prospective payment system. This has already been the case for procedures conducted in hospitals billing under the outpatient prospective payment system. In the past, beneficiaries were responsible for both a deductible and coinsurance.

This change applies specifically to the Healthcare Common Procedure Coding System codes listed in the Table. These changes will be implemented July 2 (but were made effective January 1—the Centers for Medicare and Medicaid Services indicate that they will not actively search for such services prior to the implementation date, but will act on any brought to their attention).

  HCPCS Code   Description
  G0104   Colorectal cancer screening; flexible sigmoidoscopy
  G0105   Colorectal cancer screening; colonoscopy on individual at

  high risk
  G0121   Colorectal cancer screening; colonoscopy on individual not

  meeting criteria for high risk



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