Oncology & Biotech News
September 2008
Volume 2
Issue 9

Reimbursement and Managed Care News: May 28, 2010

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Electronic Health Records Are an Elusive Goal For Office-Based Physicians

Without computerized medical records that can be transferred and viewed from one treating physician to another, experts doubt that we can advance the clinical quality and safety agenda in this country. Managed care organizations understand that electronic health records (EHRs) are the key to preventing drug—drug interactions, reducing duplicative medical testing, and better recording of patient allergies and comorbidity data, but they (and their contracted physicians) struggle with the cost of implementing these systems. As a result, according to researchers, only a small proportion of office-based physician practices have adopted these systems.

In a 2008 survey of 2,758 physicians nationwide, only 4% reported that they had a “fully functional” electronic records system. Thirteen percent indicated that they used a “basic system” (Table). Three percent had purchased but not yet implemented their EHR. Of those with a fully featured EHR, 71% stated that it was integrated with their affiliated hospital’s system. In comparison, 56% of those with basic systems have synched theirs with EHRs at their affiliated hospital.

Costs of purchase and implementation and concerns about return on investment were critical barriers to adoption, even though survey respondents indicated that EHRs would be expected to improve quality of patient care. Unfortunately, the researchers did not provide differential results based on practice specialty; they did find that primary care practices tended to utilize EHRs more frequently than specialty practices, but the responding numbers were small. It would be interesting to better understand the adoption of EHRs in community oncology practice.

In related news, the federal government acknowledged the importance and the cost of implementing electronic prescribing in its recent wrangling over the Medicare physician pay cut that was ultimately passed by Congress into law. Part of that legislation directs the Centers for Medicare & Medicaid Services to pay additional money to physicians who utilize electronic prescribing. During 2009 and 2010, physicians treating Medicare patients will get an extra 2% in their reimbursements when using E-prescribing in order to defray the costs of the system, which is estimated at $3,000 per doctor.

Freking K: Health officials tout computer prescribing.

July 21, 2008.

Washington Post

Change in Medicare Reimbursement Does not Result in Worse Access to Chemotherapy

When the Medicare Modernization Act of 2003 ushered in the switch to reimbursement based on average sales price (ASP) methodology, it was assumed that physicians would refer patients to other facilities to receive parenteral therapies they had been administering in their office. If that was the case, it was hypothesized that patients would find it more difficult to obtain needed parenteral treatments.

Journal of the American Medical Association

A new study published in the demonstrates that patient access has been largely unaffected by the switch from “buyand- bill” incentives. Using samples from Medicare claims from the Centers for Medicare & Medicaid Services, researchers from Duke University, Durham, North Carolina, evaluated more than 5,000 incident cases of five cancer types (breast, colorectal, or lung cancer; leukemia; or lymphoma) each year from 2003 through 2006.

They found that for each year, before and after the reimbursement provisions of the Act were implemented, 70% of the patients received parenteral treatment in the physician’s office. They did find that the proportion of patients receiving chemotherapy in hospitals decreased from 2003 to 2006 (from 10.2% to 8.8%, respectively) but the proportion who received their parenteral chemotherapy in outpatient infusion centers increased slightly over that period (from 21.1% to 22.5%). These changes were statistically significant, but from 2003 to 2006, 68.7% of the patients received office-based infusions or injections. Average waiting times to receive initial chemotherapy after diagnosis increased by 0.88 days in 2006 compared with 2003. The researchers did a geographical analysis of the distance between where patients’ were given their chemotherapy relative to their home address, and they found that patients distance to receive chemotherapy increased by one mile compared with before implementation of the new ASP reimbursement formula.

They concluded that Medicare patients’ access to injectable or infusible chemotherapies were not widely affected by the changes in reimbursement mandated by the Medicare Modernization Act.

Shea AM, Curtis LH, Hammill BG, et al: Association between the Medicare Modernization Act of 2003 and patient wait times and travel distance for chemotherapy. JAMA 2008;300:189-196.

NICE not so Nice to Bevacizumab

The value of a biologic medication is often difficult to determine, as they are usually prescribed for limited groups of patients and manufacturers set relatively high prices to offset long and challenging research and manufacturing costs. This is frequently the case for oncology biologic medications, as they produce incremental benefits to extend life or at least progression-free survival. The United States does not have a single agency that is responsible for reviewing overall value of drug benefits, but Great Britain does.

Its National Institute for Clinical Health and Excellence (NICE) gave a thumbs down to bevacizumab for first-line use in lung and breast cancer in a late June decision. Although not a Food and Drug Administration—type authority, NICE wields a different and effective weapon: It provides recommendations to the National Health Service (NHS) to authorize reimbursement of a product based on its value. In the care rationing system of the NHS, it is all about value.

The Institute pointed out that the product’s manufacturer did not provide evidence on bevacizumab’s clinical and cost effectiveness. Apparently, Roche knew it was a no-win proposition. A spokesman for Roche UK confirmed that it did not provide breast cancer and lung cancer information to NICE, because they knew it could not meet the rigid limit cost effectiveness set by NICE.

NICE rejects cancer drug in clash with Roche. Reuters June 26, 2008.

Medicare Pay-for-Reporting Program Sends $36 Million in Bonuses to Participating Physicians

Medicare’s first foray into pay-for-performance programs is a phased project that seeks to get physicians used to reporting quality data. This “pay-for-reporting” initiative, as some have referred to it, the Physician Quality Reporting Initiative (PQRI), paid out its first bonuses for 2007, reported the Centers for Medicare & Medicaid Services (CMS) in July.

According to CMS, 56,700 clinicians provided clinical quality data that met designated standards and would receive $36 million in payments by August. The average payments to individual health care professionals was more than $600, and the average to group practices topped $4,700. The largest payment was to a physician practice, earning nearly $206,000 in bonuses.

The PQRI program will pay as part of the 2008 program a 1.5% financial bonus, as it did for 2007. The 2008 program includes 119 quality measures and two structural measures (whether electronic health records and/or electronic prescribing is utilized). Information about participation may be obtained from

Medicare Quality Reporting Initiative Pays Over $36 Million to Participating Physicians From the 2007 PQRI Reporting Period (press release). Centers for Medicare and Medicaid Services, July 15, 2008.

Low Insurance Caps Continue to Plague Health Policies

No one would blame any patient with cancer who worries that their health care costs may threaten to reach the maximum benefit allowed by their health insurance policy. The costs of biologic medications, imaging tests, surgery, and supportive agents can easily exceed a few hundred thousand dollars, and costs of more than $1 million are not rare.

Deflecting the problem in the Washington Post, Robert Zirkelbach, a spokesperson for the health industry trade group America’s Health Insurance Plans, stated, “I think the discussion needs to move into why do some health care services cost hundreds of thousands of dollars and what can we do to address the issue?”

According to the Henry J. Kaiser Family Foundation, 22% of employer-sponsored health plans employ lifetime benefit maximums of $2 million or less. Only 1% offered plans with benefit caps at $1 million or less.

Still, $1 million does not go as far as it used to. If a health benefit had a maximum of $1 million in 1970, that would have to be $10 million today, to provide similar protection.

Murphy T: Low health insurance caps leave patients stranded.

July 13, 2008.

Washington Post

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