Oncology Groups Respond to CMS' Proposals for Payment Cuts

Alex Azar

Provoking consternation from oncology groups, the Centers for Medicare & Medicaid Services (CMS) has proposed a slate of changes that would reduce payment for some forms of patient evaluation and management (E/M) and reduce the payment margin over wholesale acquisition cost (WAC) for Medicare Part B drugs.

CMS has billed the proposed cuts for 2019 as way to reduce the out-of-pocket expense that patients face for medical care and achieve President Donald Trump's goals for lowering the overall cost of healthcare and eliminating wasteful spending.

The cuts would reduce E/M payments for one form of comprehensive new patient evaluation to $135 from $211, although payments for less complex forms of E/M would increase. One type of E/M payment for existing patients would be lowered to $93 from $148, a 37% reduction.

In addition, CMS would trim payment for the outpatient specialty and new cancer drug payments under the Medicare Part B plan. Whereas the current payment rate approved by CMS is WAC plus 6%, the revised payment schedule would lower payment to WAC plus 3%. WAC is the manufacturer's list price for a drug but it does not include discounts or rebates.

"Today's reforms proposed by CMS bring us one step closer to a modern healthcare system that delivers better care for Americans at a lower cost," said Health and Human Services Secretary Alex Azar.

Oncology groups have long maintained that CMS already does not pay the full WAC plus 6% for Part B drugs. The Community Oncology Alliance (COA) contends the current rate is WAC plus 4.3% when sequester cuts are factored in. Including sequester cuts, even the WAC plus 3% rate would be reduced to WAC plus 1.35%, COA contended following this week's CMS announcement. Oncology groups say the current formula results in a loss for them on a significant portion of their drug purchases.

CMS announced the Physician Fee Schedule payment changes on Thursday afternoon. On Friday, after oncology groups had begun to digest the announcement and its implications, a protest began to arise.

"The proposal would trigger major cuts to physician reimbursement for Part B drugs that have been newly introduced to the market and make an already turbulent cancer care delivery system even more unstable," the American Society of Clinical Oncology said in a statement in which it strongly opposed the draft changes. "Additionally, the cuts could hinder patient access to newer, innovative therapies-potentially stalling progress against cancer and almost certainly making it more difficult for oncologists to provide essential services to patients with cancer."

COA, an association of independently managed oncology centers, contended the CMS proposal defies logic in part because it narrows the difference between payment for simple diagnoses and complex ones, paying higher prices for less-intensive evaluations and less for more demanding work. The proposed change in WAC plus 6% is also baffling, COA said.

"No words can adequately describe how puzzling the CMS proposals are," said Ted Okon, executive director of COA. "At a time when the Trump administration is floating its blueprint to bring down drug prices, they are proposing a move that will actually fuel list prices of chemotherapy and other life-saving drugs. And their scheme to pay a physician the same amount for evaluating a case of sniffles and a complex brain cancer simply defies all logic. It is the antithesis of value-based healthcare and cheapens the medical care seniors are entitled to under Medicare."

CMS defended the proposed changes as being in accord with the White House's effort to lower prescription drug costs and improve healthcare access for seniors. "President Trump is putting Americans first...and CMS is committed to advancing this effort," the agency said in a statement.

A host of additional proposed changes accompanied the draft payment rate adjustments. CMS said a principal element of its plan was to reduce the number of hours physicians are spending behind their computer terminals so that they can improve face time with patients. CMS said this could be accomplished by streamlining regulatory requirements so that the focus is more on patient care.

In addition, CMS said payment policies would be modernized so that patients could receive virtual care through computer connections and physicians could be paid for care delivered in this way. The changes would also smooth the transfer of medical records to eliminate difficulties when patients switch from one physician to another.

"Clinicians would see a significant increase in productivity-leading to substantially more and better care provided to their patients," CMS said in the statement.

The changes to the Physician Fee Schedule would reduce paperwork and save physicians 51 hours of time per year if 40% of their patients are in Medicare, CMS estimated. Changes to the Quality Payment Program, which would refine quality reporting requirements so that they focus on "measures that most significantly impact health outcomes" and promote electronic health record interoperability, would save clinicians additional time and money, CMS estimated.

Reference

CMS proposes historic changes to modernize medicare and restore the doctor-patient relationship [press release]. Baltimore, Md: CMS; July 12, 2018. cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-12.html. Accessed July 13, 2018.