2015 Was a Year of Integration–and Adjustment

Jeffrey Vacira, MD

Looking back on 2015 in the field of oncology practice, a lot of the groundwork was laid for what the Association of Community Cancer Centers (ACCC) predicted in a fall report: “increased reliance on team-based care and care provided by nonphysicians.”

Economic and regulatory pressures are not allowing much wiggle room for small, independent practices to survive without affiliating themselves with larger groups of practices or merging with hospital systems; and whether physicians are comfortable with the notion or not, the involvement of multiple layers of non-MD personnel in practice decision making and administration is becoming a larger reality every day.

The Demise of SGR

“The US health care industry, including oncology, is undergoing unprecedented consolidation and integration,” the ACCC wrote in the summary to a fall white paper on industry changes.¹ “Hospital systems are merging, hospitals are purchasing provider practices, provider practices are joining to create ‘super-sized’ groups, insurance companies are purchasing hospital systems, and the insurance industry itself is undergoing what some are calling ‘merger madness,’ potentially leaving just three companies controlling half of the commercially insured population in the United States.”The year 2015 saw the demise of the Sustainable Growth Rate Formula, the unwieldy means of keeping medical payments in line with the growth of national spending. Its replacement, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), brought with it a new set of payment anxieties for physicians in the form of punishment and reward: the Merit-Based Incentive Payment System and Alternative Payment Models (APMs). The first incorporates stiffer reporting requirements and measures of performance, whereas the second involves a movement toward integrated payment models and coordinated care.

The Oncology Care Model

MACRA, through its system of financial penalties and bonuses, and through the transparency it imposes on oncology care, clearly possesses the power to incentivize change. Whereas some physicians are concerned about whether practices will be judged fairly, Jeffrey Vacirca, MD, vice president of the Community Oncology Alliance (COA), expresses optimism and says he views MACRA as a means by which the quality and value of community oncology will become more apparent. “Payment reforms that increase quality and decrease cost are a reality right now for us,” Vacirca said. “For those of us in community oncology, we welcome this. We think that any sort of a microscope that looks at quality and value is going to make us look better.”The year 2015 also brought an effort by the Centers for Medicare & Medicaid Services (CMS) to launch the Oncology Care Model (OCM), an episodic care payment model designed to spur innovation and value-driven care. Hundreds of practices met the June deadline for applying to be among the first chosen to try this model, but skeptics of that response described the OCM pilot as a choice with no alternatives.

Reining in 340B

Whereas a poorly fitting suit of clothes can pull and bind, both ASCO and COA are lobbying to cut and tailor their own APMs rather than be forced to pick them off the CMS rack.Efforts to rein in the ballooning 340B Drug Pricing Program (340B) and create some breathing room for hardpressed community practices included the late summer release by COA of a Berkeley Research Group (BRG) report on 340B spending growth.² Among the statistics was information on how rapidly hospitals are expanding their chemotherapy infusion services, which allow higher reimbursement for drugs purchased at the discounted 340B price.

“Our most recent analysis indicates that hospital outpatient departments accounted for almost 35 percent of all chemotherapy claims in 2013, up from 21 percent in 2010,” BRG said in the September report.

In addition, in just the last five years, the number of 340B covered entities contracting with retail pharmacies and mail-order/specialty pharmacies has soared from just under 1000 to just over 3000, the report indicated. These pharmacy arrangements, which fit loosely into the scope of 340B privilege, are held responsible for the extension of discount benefits into patient populations where relatively little need for 340B is said to exist.

Finally, a May 2015 report by the Medicare Payment Advisory Commission stated that 340B covered entities and their affiliates spent over $7 billion to purchase 340B drugs in 2013—three times the amount spent in 2005.³ Efforts to bring 340B to heel gathered steam with an August set of draft recommendations from the Health Resources and Services Administration.⁴ These would establish an audit trail for drug prescriptions under 340B as well as an expanded list of criteria for determining patient eligibility. Some advocates for 340B reform contend the proposed changes are not comprehensive and would allow some abuses to continue.

A Step Toward Site Neutrality

Meanwhile, hospitals pushed back against the reform set, contending the administrative burden of the proposed checks and balances would cripple hospital ability to extend care where it is needed.The additional fees allowed for outpatient services are a key factor in hospital moves to acquire community practices and their infusion centers, but such acquisitions were curtailed by the passage of Section 603 of the Balanced Budget Act of 2015, which grandfathered existing infusion centers more than 250 yards off site but imposed an exclusion on new acquisitions beyond that boundary starting in 2017. This initial foray into “site neutrality” for Medicare payments is widely expected to put the brakes on merger activity.

Saltz Speaks Out

Drug Valuation Tools

Oncology business analysts said this will surely throw existing merger plans into disarray. However, it does have the potential to reinforce the competitive standing of remaining community oncology practices, because hospitals will have to resort to alternative measures to expand their satellite outpatient service networks.A memorable moment in oncology practice, in 2015, occurred in May when Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center (MSKCC), took the lectern at the ASCO annual meeting and publicly decried the soaring cost of cancer drugs. Saltz cited, as an example, Opdivo and Yervoy, approved as the first combination immunotherapy for advanced or inoperable melanoma in October. According to Bristol-Myers Squibb, the drug combo would cost $256,000 for one year of treatment. It was not news that cancer drugs have become so expensive; it was news that the issue was addressed in the plenary speech at such an important oncology gathering. Later, in a National Public Radio interview, Saltz added that the incremental survival benefits offered by some new drugs do not justify the enormous price tags attached to them: “Right now we’re paying for the drug whether it works very well or whether it works just a tiny, little bit,” he said.Several attempts to facilitate a drug-price-value discussion between doctors and patients were launched in 2015, among them the ASCO Value Framework, which assigns point values to drugs based on clinical benefit, toxicity, and cost. However, the prototype tool cannot easily compare drugs across trials, and even the initial examples of its use had to be revised owing to an oversight. Physicians at MSKCC introduced the DrugAbacus method for estimating the true value of a drug, and the National Comprehensive Cancer Network came out with a patientfriendly drug regimen valuation tool.

These tools don’t solve the problem of soaring costs for medicine, but they do serve as yet another sign that there is growing resistance to continued inflation in drug pricing.

Revamping MOC

“Collectively, the more we talk about this, the more we will be able to deliver a much better understanding to patients about what they get from a new treatment compared to what they’re expected to spend for it,” said Richard Schilsky, MD, FASCO, chief medical officer for ASCO,” in an interview with Oncology Business Management in June.While drug prices were under scrutiny, efforts by the American Board of Internal Medicine (ABIM) to modernize the standards for physician accreditation were hammered repeatedly by physician groups, notably by American Society of Hematology (ASH), whose president, David A. Williams, MD, contended that even the most recent proposals for revamping the Maintenance of Certification (MOC) standards are out of touch with current practice. ABIM’s president, Richard Baron, MD, countered that efforts have been made to incorporate broad stakeholder input, and that even ASH representatives have been present at MOC standard review meetings.

Nevertheless, tougher standards, imposed in 2014, that required physicians to rack up module training points at a faster pace, clashed with physicians’ already busy schedules and exacerbated complaints that modern certifications are over-reliant on nonrelevant textbook information. Earlier this year, ABIM was forced to backpedal and put those changes on hold.

“Doctors felt the quotient of busy work to high value work wasn’t very high, and we agreed with them,” Baron conceded in an interview this fall.

References

1. Association of Community Cancer Centers. What will it take? Five essential actions to achieve a positive impact on patient care in the integrated healthcare environment. https://goo.gl/VzPQTN. Published November 2015. Accessed December 4, 2015.
2. Vandervelde A. 340B growth and the impact on the oncology marketplace. Berkeley Research Group. http://goo.gl/efVfnQ. Published September 2015. Accessed December 4, 2015.
3. Medicare Payment Advisory Commission. Report to the Congress: overview of the 340B drug pricing program. http://goo.gl/uIPVFP. Published May 2015. Accessed December 4, 2015.
4. Health Resources and Services Administration. 340B drug pricing program omnibus guidance. https://goo.gl/KMxU2U. Federal Register. Published August 2015. Accessed December 4, 2015.