CMS' Healthcare Reform Efforts Make Waves

Deborah Abrams Kaplan
Published: Wednesday, Feb 20, 2019
Jeffrey Ward, MD

Jeffrey Ward, MD

Although some policy efforts on healthcare reform fell by the wayside when the Obama administration left office, the past 2 years under President Donald J. Trump have seen much action in this regard, making it an active time on Capitol Hill for lobbyists representing the oncology industry. The charge into healthcare reform over the past 2 years by the Centers for Medicare and Medicaid (CMS) has been spurred by the Trump administration’s blueprint, American Patients First.1 Many of these initiatives have, in turn, spawned vigorous and vigilant lobbying efforts by oncologists to ensure that any changes are not disruptive to their vision for appropriate and sustainable clinical care.

When 2019 began, oncologists were battling with the Department of Health and Human Services over a plan to remove oncology drugs as one of 6 protected drug classes under Medicare Part D. CMS believes the time has come to remove protections from drugs that cost the public payer far more, on average, than actual market rates. “Typical private market discounts for these drugs are in the 20%-to-30% range, but the average discount across all protected classes in Part D is just 6%,” CMS wrote in a statement about the proposed change.2

Oncologists contend the draft policy change would enable private payers to install more barriers to access, at the expense of patient health and longevity.

Under the current administration, a policy implemented at the turn of the year could have far-reaching effects on the healthcare reform effort (Table). Since January 1, hospitals have been required to disclose their pricing lists. The initial reaction from the public has been that the arcane descriptions attached to these prices are as difficult to understand as hieroglyphics. However, experts believe that, with time, further clarity will be injected into these lists, and improved healthcare competition and pricing will result. The impact on oncology sector pricing remains unclear.

“I work for a hospital, and the cost structure and the way in which hospitals and physicians get paid are completely different than the way they bill,” said Jeffrey C. Ward, MD, a medical oncologist at the Swedish Cancer Institute in Edmonds, Washington. “As a physician, my billing can be whatever I want it to be and almost all of my payments are contractual. What I bill has nothing to do with what I get paid. You see that whenever you look at an explanation of benefits.”

Clearly, fresh battle lines have been drawn in 2019, but the past 2 years of the reform process have involved much give-and-take, and some initiatives have been more impactful than others. Some efforts represent reformulated ideas that failed to launch successfully under previous administrations. Below is a summary of the highlights of this interplay, along with commentary from the oncology provider community.

Medicare Part B Physician Fee Schedule

One strongly contested CMS initiative in 2018 was an attempt to simplify coding and payment under the Medicare Physician Fee Schedule and Quality Payment Program. The agency sought to consolidate payment levels for evaluation and management (EM) services, a move that oncologists, among other physicians, said would result in underpayment for complex analysis. “It would have valued a case of sniffles—level 2 code—the same as metastatic breast cancer—level 5,” said Ted Okon, MBA, executive director of the Community Oncology Alliance (COA), an association of independent practices.

Table. Select Healthcare Reforms Impacting Oncology Under the Trump Administration1-10

Table. Select Healthcare Reforms Impacting Oncology Under the Trump Administration1-10 CMS reversed course and preserved the fifth, or highest, level of payment— $211 for patients with the most complex needs—and said it would consolidate the 4 lower tiers of EM into a single payment. So far, for hematology and oncology, the overall result is an estimated 1% reduction in EM payment. This is an improvement from the originally proposed 4% decrease, according to the American Society of Clinical Oncology.3

The removal of the level 5 payment from consolidation was a relief, said Frederick Schnell, MD, COA medical director. The previously planned adjustment would not have covered the cost of meeting new patients with cancer, designing care plans, talking to families about patients’ illness, managing the costs of care, or validating insurance, he said. “It would have forced providers to start cutting corners.”

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