Oncologists Want Medicare Drug Demo Proposal Gone

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By Mindy Yochelson

May 10 — Oncologists and other doctors are urging the Medicare agency to rescind a proposed demonstration that would test six different approaches for paying for Part B drugs that are administered in physician offices and outpatient departments.

The American Society of Clinical Oncology said—in one of more than 1,300 comments the agency received—that the CMS should “withdraw an experiment of this magnitude without first understanding its potential impact on patient care.”

The proposed regulation (RIN:0938–AS85), published in the March 11 Federal Register, “is particularly ill-suited to the delivery and treatment of cancer care, which is complex and highly personalized to each patient,” ASCO President Julie M. Vose said in a statement.

Comments were due May 9.

Oncology Care Model

The US Oncology Network asked that the rule not be finalized.

The Centers for Medicare & Medicaid Services is preparing to roll out another model involving cancer specialists called the Oncology Care Model (OCM), an episode-based payment model aimed at improving coordination and access to care, which has been regarded favorably by specialists

With potential overlap, the US Oncology Network strongly recommended that the CMS exclude oncologists participating in the OCM from the Part B Drug Payment Model.

The Community Oncology Alliance said the model should be withdrawn because of the impact it would have on oncologists’ clinical decision-making. Test and control groups would randomize patients by where they are treated, yet there would be no “informed consent” and patients could not opt out, COA said.

The American Cancer Society Action Network said the scope of the model goes far beyond a demonstration project.

High Cost of Part B Therapies

The high cost of infusion and other Part B drugs has raised concerns for years. The Medicare Payment Advisory Commission said that in 2014, Medicare and beneficiaries spent more than $20 billion on these therapies.

The two-phase model would test whether alternative drug payment designs will lead to a reduction in expenditures.

Currently, Part B drugs are reimbursed at the average sales price of a drug, plus a 6 percent add-on (106 percent of ASP).

The first phase of the model would maintain that for the control group but change that for a test group to 102.5 percent ASP, plus $16.80 flat fee payment per day per drug.

In 2017, value-based purchasing arrangements would be tested by further dividing the average sales price test and control groups. One group would continue to be paid at 106 percent of ASP.

Choosing Higher Priced Drugs

The notion that the current payment methodology spurs doctors to choose higher priced drugs is a fallacy, the American Society of Hematology told the CMS. For most conditions, hematologists don't have much choice in treatments. Although there are more choices in supportive care drugs, “those drugs are rarely paid at a high enough rate for such difference to be meaningful,” the group said in a letter.

The blood specialists said if the agency finalizes the model, the size of the demonstration should be decreased.

Putting “nearly three quarters of the country into an investigational arm,” the hematologists said, is “far larger than needed to study the effects on access and quality.” It would also create problems if adjacent areas have different payment mechanisms.

Brian Whitman, senior manager, policy and practice for the society, told Bloomberg BNA he predicts the agency will scale down the demonstration.

This could be accomplished by minimizing the test groups so that less than 75 percent are in a test mode and a higher percentage would be in the control group.

Other Groups

While oncologists have led the charge against the proposal, hospitals and other medical groups have also slammed it.

In addition, most members of Congress who have submitted comments to the CMS have spoken against the model (87 HCDR, 5/5/16).

The American Medical Association said it's “concerned that the cuts proposed in phase 1 of the model could undermine Medicare beneficiaries’ access to care from their established physician in their local community and move their treatment to higher cost delivery sites depending on where they live.”

The Federation of American Hospitals said the CMS needs to go back to the drawing board to develop policy proposals that more directly and effectively address the problem of unsustainable increases in drug costs.

The American Hospital Association said hospitals are inappropriate for inclusion in this model.

However, if the agency believes it's necessary to move forward, “we strongly recommend that the model be implemented on a much smaller scale by excluding cancer drugs and narrowing the number of geographic areas that are affected,” the AHA said.

To contact the reporter on this story: Mindy Yochelson in Washington at myochelson@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

For More Information

The ASCO letter is at http://src.bna.com/eSc.

The US Oncology letter is at http://src.bna.com/eSd.

The Community Oncology Alliance letter is at http://www.communityoncology.org/pdfs/COA_CMS_PartBModelLetter_5-9-16_FINAL.pdf.

The AMA letter is at http://src.bna.com/eR9.

The American Hospital Association is at http://www.aha.org/advocacy-issues/letter/2016/160508-let-nickels-slavitt.pdf.

The American Cancer Society's letter is at http://src.bna.com/eSe.

The Federation of American Hospitals letter is at http://fah.org/upload/documents/FAH_Comments_on_Part_B_Drug_Demonstration.pdf.

The Society of Hematology's letter is at http://src.bna.com/eRn.