Letters to the Editor

Oncology Payment Reform and Drug Reimbursement in the Proper Perspective To the Editor: We take a decidedly contrary position to that expressed by Polite et al in “Payment for Oncolytics in the United States: A History of Buy and Bill and Proposals for Reform.”1 Medicare drug reimbursement based on average sales price (ASP) is not under attack in the Congress; actually, the facts prove the exact opposite. The authors imply that Congress specifically targeted cancer drugs in mandating “that CMS cut Part B drug reimbursement by 2%.” In actuality, sequestration was a failsafe device that Congress created to motivate a “super committee” of select members to reduce federal spending. When Congress failed at budget cuts, the sequester reduced most aspects of federal spending, including Medicare, which was cut across the board but limited in scope to a 2% reduction cap. Many members of Congress believe that the Centers for Medicare & Medicaid Services (CMS) should exempt Medicare Part B drug reimbursement from the sequester cut. In an April 19, 2013, letter to CMS, 124 House members expressed concerns about the sequester cut being applied to Medicare reimbursement for Part B drugs. A bipartisan bill, the Cancer Patient Protection Act of 2013 (H.R. 1416), directs CMS to exempt Part B drugs from the sequester cut and has the backing of these 124 members. In addressing the flaws pointed out by the authors with Medicare drug reimbursement, there is legislation (H.R. 696 and S. 506) designed to fix a key flaw, and there have been hearings in which members have supported fixing reimbursement, noting the impact of these flaws in cancer clinic closings and consolidation of cancer care into the more expensive hospital setting. The contention held by some that ASP-based reimbursement incentivizes use of higher priced drugs is unproven. In fact, the UnitedHealthcare pilot that removed the so-called incentive from drug reimbursement actually resulted in an unexpected 179% increase in drug spending.2 The real incentive to use more expensive drugs exists in hospitals where 340B drug discounts provide up to a significant 100% margin on cancer drugs. Community oncology practices are under increasing pressure not only from the flaws in ASP, but also from CMS payment cuts for oncology services and increasing overtures from 340B hospitals to independent community cancer clinics to merge or affiliate in order to capture highly discounted oncology drug revenue. Since 2005, there has been a 65% increase in

the number of disproportionate share hospitals with 340B discounts and Medicare spending on Part B drugs is growing at a 22.6% compounded annual growth rate in disproportionate share hospitals.3 Payment reform in oncology should first be directed at increased Medicare and private pay spending for drugs and services in the hospital setting. Studies by Avalere,4 Milliman,5 and The Moran Company6 have documented the higher spending by Medicare, private insurers, and patients for cancer care delivered in the hospital setting. Newcomer cited internal UnitedHealthcare data that spending on cancer care in physician-directed community cancer clinics is 22% higher that the Medicare rate while being 146% higher in outpatient hospital facilities.7 Advocating for wholesale replacement of the current Medicare drug reimbursement system based on a flawed premise, and without a tested, viable alternative, is potentially dangerous for patients with cancer. It opens the door for commercial and/or political interests to gain control of the current, highly efficient drug distribution system and to restrict oncologist decision making to act in the best interests of patients. Like the authors, we too exhort provider organizations and others in the cancer community to work together, but on overall payment reform for drugs and services in oncology, both in physician-directed community cancer clinics as well as outpatient hospital departments. Mark Thompson Mark H. Zangmeister Center, Columbus, OH Jeffrey Vacirca North Shore Hematology Oncology, East Setauket, NY Ted Okon Community Oncology Alliance, Virginia Beach, VA Authors’ Disclosures of Potential Conflicts of Interest Disclosures provided by the authors are available with this article at jop.ascopubs.org. Corresponding author: Ted Okon, Community Oncology Alliance, 760 Lynnhaven Parkway, Suite 150, Virginia Beach, VA 27530; e-mail: [email protected].

DOI: 10.1200/JOP.2014.003418; published online ahead of print at jop.ascopubs.org on March 3, 2015.

References 1. Polite B, Ward J, Cox J, et al: Payment for oncolytics in the United States: A history of buy and bill and proposals for reform. J Oncol Pract 10:357-362, 2014 2. Newcomer L, Gould B, Page RD, et al: Changing physician incentives for affordable, quality cancer care: Results of an episode payment model. J Oncol Pract 10:322-326, 2014 3. Medicare Payment Advisory Commission: The 340B Drug Pricing Program. www.medpac.gov/documents/november-2014-meeting-presentation-the-340bdrug-pricing-program.pdf?sfvrsn⫽0

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4. Total Cost of Cancer Care by Site of Service: Physician Office vs Outpatient Hospital, Avalere, March 2012 5. Site of Service Cost Differences for Medicare Patients Receiving Chemotherapy. Milliman. October 2011 6. Results of Analyses for Chemotherapy Administration Utilization and Chemotherapy Drug Utilization, 2005-2011 for Medicare Fee-for-Service Beneficiaries. The Moran Company. May 2013 7. Newcomer L: Myths and realities in cancer care: Another point of view. Health Aff 33:1805-1807, 2014

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AUTHORS’ DISCLOSURES OF POTENTIAL CONFLICTS OF INTEREST Oncology Payment Reform and Drug Reimbursement in the Proper Perspective The following represents disclosure information provided by authors of this manuscript. All relationships are considered compensated. Relationships are self-held unless noted. I ⫽ Immediate Family Member, Inst ⫽ My Institution. Relationships may not relate to the subject matter of this manuscript. For more information about ASCO’s conflict of interest policy, please refer to www.asco.org/rwc or jop.ascopubs.org/site/misc/ifc.xhtml. Mark Thompson No relationship to disclose

Ted Okon No relationship to disclose

Jeffrey Vacirca Employment: AmerisourceBergen Stock or Other Ownership: Heron, Spectrum Pharmaceuticals, AmerisourceBergen Consulting or Advisory Role: Spectrum Pharmaceuticals

Copyright © 2015 by American Society of Clinical Oncology

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jop.ascopubs.org

Letters to the Editor

Reply to M. Thompson et al To the Editor: We thank Thompson et al1 for their response to our Journal of Oncology Practice (JOP) article, “Payment for Oncolytics in the United States: A History of Buy and Bill and Proposals for Reform.”2 First, let us be clear, our JOP article was written as an invitation to American Society of Clinical Oncology (ASCO), Community Oncology Alliance (COA), and other interested parties to consider viable replacement options to buy-and-bill as part of an overall outpatient oncology payment reform strategy.2 Our call for a replacement to average sales price (ASP) – based reimbursement for outpatient chemotherapy administration comes on the heels of ASCO’s Consolidated Payments for Oncology Care proposal3 and the COA’s oncology medical home-based payment reform proposal.4 These proposals have not received the serious attention that they should have garnered from policymakers because they did not include a proposal for the direct reform of the outpatient chemotherapy administration reimbursement. Second, we respectfully disagree with the point by Thompson et al1 that ASP-based reimbursement is not under political threat. They note sequestration’s 2% cut to ASP, resulting in a reimbursement change from ASP ⫹6% to ASP ⫹4.3%, was unintended and not supported by many members of Congress. While this may be true, Congress has had two clear opportunities to fix this problem with the Murray-Ryan Budget Agreement in November 20135 and the most recent Cromnibus bill which funds the Government through September 2015.6 In neither of these two bills was ASP restored to ⫹6% despite the fact that they undid much of the sequester’s other effects. H.R.1416, the bill the authors refer to in their article as a counter-example to our argument, did garner the support of 124 cosponsors and was referred to three House Committees in April 2013, but never went any further.7 H.R.800 and S.806, which aimed to fix the so-called prompt pay discount had few cosponsors and were also referred to committee to die.8,9 All of these bills are now moot with the closing of the 113th Congress. This past year’s legislative experience perpetuates a 10-year legacy of bipartisan and bicameral lip service to fixing ASP. More fundamentally, we reject the premise that tweaking ASP reimbursement will fix the problems; unless it is replaced, buy and bill will be a perpetual target for payers and policy makers and a threat to the viability of oncology practice. Policymakers often articulate the perception that ASP-reimbursement incentivizes the overutilization of expensive, branded chemotherapies. This perception persists despite arguments, largely among members of the oncology community, regarding the quality of the supporting evidence. In a November 2014 hearing of the Medicare Payment Advisory Commission, the commissioners were in agreement that ASP policy creates a “perverse incentive”—their words, not ours—for providers to use more expensive medications rather than trying to control costs.10 In politics, perception is reality. Copyright © 2015 by American Society of Clinical Oncology

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Like Thompson et al,1 we find the results of UnitedHealthcare’s outpatient oncology reimbursement pilot11 to be intriguing. However, to attribute the pilot’s results, as the authors suggest, solely to the pilot’s pharmaceutical reimbursement to ASP plus a management fee is a gross over reach. The results do support the potential cost savings that could be reaped from the widespread adoption of Oncology Medical Home models promulgated by COA and others, but it does not let the incentives inherent to the buy-and-bill system off the hook. We also agree with the authors that 340B reform should be undertaken, but disagree that the 340B drug discount program for qualified medical providers is the root cause of all ills in oncology. Although this is a frequent COA talking point, the argument is simply not credible. We believe that 340B and ASP must be reformed, preferably together. To separate these issues results in a divided oncology community at a time when we must speak with a unified voice. We appreciate that ASP reform strikes at the heart of the current economic model for many oncology practices and that any change will be disruptive. We recognize that ASP reform must be balanced by changes in reimbursement for services that are uncompensated or undercompensated under the current system. ASCO’s Consolidated Payments for Oncology Care proposal explicitly states that it was designed to facilitate this balancing act. Other proposals should follow this example, freeing oncologists from dependency on drug revenues while keeping outpatient oncology viable. Given the choice of living with (1) the reimbursement system we know despite its flaws or (2) anticipating substantial change in practice revenues at a time of increased practice costs, the understandable reaction is to unequivocally defend the status quo. We believe this strategy will ultimately be unsuccessful. Rather, let us stand together as a united community committed to fundamental oncology payment reform. By seizing on the opportunity to participate in policymakers’ active debate on the reform of the outpatient oncology reimbursement system, we better ensure the long-term sustainability of community-based outpatient oncology practice for ourselves and our patients. Blase Polite The University of Chicago, Chicago, IL Jeffery C. Ward Puget Sound Cancer Centers, Seattle, WA John V. Cox UT Southwestern Medical Center, Dallas, TX Roscoe F. Morton Medical Oncology & Hematology Associates, Clive, IA John Hennessy Sarah Cannon Research Institute, Nashville, TN Ray Page The Center for Cancer and Blood Disorders, Fort Worth, TX



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Rena M. Conti The University of Chicago, Chicago, IL

cago, 5841 S Maryland Ave, MC 2115, Chicago, IL 60637; e-mail: [email protected].

Authors’ Disclosures of Potential Conflicts of Interest Disclosures provided by the authors are available with this article at jop.ascopubs.org. Corresponding author: Blase Polite, MD, MPP, The University of Chi-

DOI: 10.1200/JOP.2015.003897; published online ahead of print at jop.ascopubs.org on March 3, 2015.

References 1. Thompson M, Vacirca J, Okon T: Oncology payment reform and drug reimbursement in the proper perspective. J Oncol Pract 11:262-263, 2015 2. Polite B, Ward JC, Cox JV, et al: Payment for oncolytics in the United States: A history of buy and bill and proposals for reform. J Oncol Pract 10:357-362, 2014 3. The American Society for Clinical Oncology: Consolidated Payments for Oncology Care, May 2014. http://www.asco.org/sites/www.asco.org/files/consolidatedpayments foroncologycare_public_comment_06.20.14.pdf 4. Community Oncology Alliance: 2014 Medicare (and Private Insurance) Payment Reform for Oncology. http://www.communityoncology.org/UserFiles/ COA_Payment_Reform_Modelv18_2014.pdf 5. Bipartisan Budget Act of 2013. P.L. 113-67 6. Consolidated Appropriations Act, 2014. P.L. 113-76 7. Library of Congress: H.R. 1416 – Cancer Patient Protection Act of 2013. https://www.congress.gov/bill/113th-congress/house-bill/1416

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8. Library of Congress: H.R. 800 – To amend part B of title XVIII of the Social Security Act to exclude customary prompt pay discounts from manufacturers to wholesalers from the average sales price for drugs and biologicals under Medicare. https://www.congress.gov/bill/113th-congress/house-bill/800 9. Library of Congress: S. 806 – A bill to amend part B of title XVIII of the Social Security Act to exclude customary prompt pay discounts from manufacturers to wholesalers form the average sales price for drugs and biologicals under Medicare. https://www.congress.gov/bill/113th-congress/senate-bill/806 10. Medicare Payment Advisory Commission: November 6, 2014 Public Meeting (Transcript). http://www.medpac.gov/documents/november-2014-meeting-transcript.pdf 11. Newcomer LN, Gould B, Page RD, et al: Changing physician incentives for affordable, quality cancer care: Results of an episode payment model. J Oncol Pract 10:322-326, 2014

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Copyright © 2015 by American Society of Clinical Oncology

AUTHORS’ DISCLOSURES OF POTENTIAL CONFLICTS OF INTEREST Reply to M. Thompson et al The following represents disclosure information provided by authors of this manuscript. All relationships are considered compensated. Relationships are self-held unless noted. I ⫽ Immediate Family Member, Inst ⫽ My Institution. Relationships may not relate to the subject matter of this manuscript. For more information about ASCO’s conflict of interest policy, please refer to www.asco.org/rwc or jop.ascopubs.org/site/misc/ifc.xhtml. Blase Polite Speakers’ Bureau: Bayer/Onyx Research Funding: Merck Other Relationship: Gerson Lehrman Group

Roscoe F. Morton No relationship to disclose

Jeffery C. Ward Honoraria: Genentech, Prometheus, Bayer Healthcare, Celgene John V. Cox Employment: Texas Oncology, PA Leadership: Texas Oncology, PA Stock or Other Ownership: Amgen, MedFusion Labs Dallas, Merck, Pfizer Research Funding: US Oncology Research Other Relationship: Mary Crowley Research Center, Dallas Texas, American Society of Clinical Oncology, Methodist Health System Dallas Texas

Copyright © 2015 by American Society of Clinical Oncology

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John Hennessy Employment: HCA Healthcare Stock or Other Ownership: HCA Healthcare Ray Page Stock or Other Ownership: Oncology Metrics Consulting or Advisory Role: International Oncology Network, via oncology Speakers’ Bureau: Biodesix, Celgene Research Funding: Gilead Sciences, Celgene, Bristol-Myers Squibb, Genentech/Roche, Pfizer Travel, Accommodations, Expenses: raintree Rena M. Conti No relationship to disclose



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Oncology payment reform and drug reimbursement in the proper perspective.

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