Where Medicare patients receive their chemotherapy treatment makes a difference in the number of chemotherapy sessions that they receive on average. And the cost of that chemotherapy when delivered in the hospital outpatient setting costs Medicare between 25% to 47% more than those who receive their chemotherapy treatment in a physician’s office. On a per beneficiary basis, the difference in cost across settings was 25.9% in 2009, 46.8% in 2010, and 33.3% in 2011, according to a report issued by the US Oncology Network, the Community Oncology Alliance (COA), and ION Solutions.

Based on claims data from 2009 to 2011, the survey found that for the same set of patients the estimated chemotherapy spending was higher under the Hospital Outpatient Prospective Payment System (OPPS) than corresponding payments in the physician office under the Medicare Physician Fee Schedule (MPFS), despite lower unit payment rates for drugs in the OPPS. On an annual basis, spending per beneficiary on chemotherapy administration in the sample is roughly 50% higher in the outpatient hospital setting than in the physician office.

Additionally, patients in the hospital outpatient setting spent more days receiving chemotherapy (a 10%-13% higher frequency rate) than patients who received treatment in a physician office. It’s not clear, however, how the recent trend of more hospitals acquiring private physician offices might affect this frequency rate. The report was unable to determine whether the shift towards more hospital outpatient delivery was due to the fact that there are fewer private physician offices.

Patient cost sharing may have a modest effect because cost-sharing obligations are somewhat higher under the OPPS. The Moran Company, the organization that prepared the report, notes that factoring cost sharing into the equation lowers Medicare costs in both settings—beneficiaries have 20% out-of-pocket costs. The report notes that beneficiary cost-sharing differences for drug administration services narrow the spread between OPPS payments and MPFS payments by only 0.2%.

The report notes that while patterns of use can be analyzed, the reason usage patterns differ cannot be determined based on the limitations of the survey. In addition, the survey could not identify differences in beneficiary characteristics (ie, case mix), which might have an effect on utilization and spending.

		Differences in Drug Reimbursements 2009

		Differences in Drug Reimbursements 2010

		Differences in Drug Reimbursements 2011

: The Moran Company. August 2013 “Cost Differences in Cancer Care Across Settings”

https://media.gractions.com/E5820F8C11F80915AE699A1BD4FA0948B6285786/adebd67d-dcb6-46e0-afc3-7f410de24657.pdf

Articles

Where Medicare patients receive their chemotherapy treatment makes a difference in the number of chemotherapy sessions that they receive on average. 

Receiving Chemotherapy in a Hospital Can Cost Up to 47% More Than in a Physician's Office

Delivering high-quality cancer care continues to be a daunting problem for the US healthcare system because of a combination of factors. These include an aging population, a shrinking work force, the rising cost of therapies, and a complex disease state and treatment regimen.

The Institute of Medicine (IOM) convened a committee of experts to examine the quality of cancer care and devised recommendations for improvements that focus on patient-centered care, greater use of palliative treatments for patients needing pain relief, and increased use of scientific data as a rationale for making clinical decisions

“Most clinicians caring for cancer patients are trying to provide optimal care, but they’re finding it difficult because of a range of barriers,” says Patricia A. Ganz, MD, chair of the committee and director, Cancer Prevention & Control Research, Jonsson Comprehensive Cancer Center at the University of California, Los Angeles.

The report recommends strategies for improving the care of cancer patients, based on six components of high-quality cancer care. The components are listed in order of priority:

 Help patients make informed medical decisions that are consistent with their needs, values and preferences.

Use a team-based approach to deliver care

. New models of this type of care can effectively promote coordinated care and respond to shortages in the work force and changes in patient demographics. Adopting this approach will be especially helpful considering that the population accounting for most cancer cases — adults older than 65 – is rapidly increasing.

Base clinical decisions on evidenced-based care.

 Many medical decisions are not supported by sufficient evidence from research sources such as clinical trials and comparative effectiveness research. Evidence of the benefits and harms of treatment options should be used to aid patients and help the cancer care team make informed decisions.

Implement a healthcare information system that can learn.

 Enable real-time analysis of data to improve knowledge and inform medical decisions. Effort will be necessary from professional organizations and government agencies such as the US Department of Health and Human Services to develop and implement the learning healthcare system. Also, payers can provide incentives that encourage clinicians to participate as a system develops.

Translate evidence into practice, quality improvement, and performance improvement.

 Tools and initiatives should be delivered in a timely manner to help clinicians quickly incorporate new knowledge into routine care.

 Disparities in care currently exist among individuals who are of lower socioeconomic status, are racial or ethnic minorities, lack insurance coverage, and are older. New payment models for would reward cancer treatment teams for providing accessible, affordable, high-quality cancer care.

 Institute of Medicine. U.S. Faces Crisis in Cancer Care Because of Aging Population, Rising Costs, Complexity of Care, Says New Report; Shift Needed Toward Patient-Centered, Evidence-Based Care. The full report is available at 

http://www.nap.edu/catalog.php?record_id=18359

Delivering high-quality cancer care continues to be a daunting problem for the US healthcare system because of a combination of factors, including an aging population, a shrinking work force, the rising cost of therapies, and a complex disease state and treatment regimen.

IOM Issues Recommendations to Improve Cancer Care Delivery

Urologists whose private practices own intensity-modulated radiation therapy (IMRT) equipment are 2.5 times more likely to prescribe the treatment to patients with prostate cancer than they were before they began offering the technology in-house, according to a comprehensive review of Medicare claims published in the 

. The study, “Urologists’ Use of Intensity-Modulated Radiation Therapy for Prostate Cancer,” echoes an earlier Government Accountability Office (GAO) report, “Medicare: Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny.”

The study, authored by Jean M. Mitchell, PhD, an economist and professor at the McCourt School of Public Policy at Georgetown University, analyzed treatment patterns of urologists before and after they acquired ownership of IMRT services and compared the patterns to a matching group of non—self-referring urologists who were in private practice or who provided clinical services at National Comprehensive Cancer Network (NCCN)-designated cancer centers (also non–self-referrers). Claims data were collected from more than 45,000 patients from 2005 through 2010.

The study has caused controversy within the field of urologic cancer care, where the issue of whether group practices should be allowed to offer ancillary services, including IMRT, has been a topic of recent debate. Although there is a federal prohibition for self-referral under the Ethics in Patient Referrals Act, ancillary services are allowed.

The Large Urology Group Practice Association (LUGPA) wrote a rebuttal to Mitchell’s study, saying it was flawed and questioning the motivation of the group that funded it.

The study found that, among the cohort of self-referring urologists in private practice, the use of IMRT services increased from 13.1 (pre-ownership period) to 32.3% (ownership period), an increase of 19.2 percentage points. Approximately 6.0% of the men treated by self-referring urologists underwent IMRT performed by non—self-referring providers.

Among non—self-referrers, IMRT use increased 1.3 percentage points, going from 14.3% during the pre-ownership period to 15.6% in the ownership period. For urologists working at NCCN centers, the IMRT rate remained stable at 8.0%. When claims data for the matching self-referring groups were reviewed, the IMRT rate increased by 33.0 percentage points.

Mitchell concludes that “men treated by self-referring urologists, as compared with men treated by non—self-referring urologists, are much more likely to undergo IMRT, a treatment with a high reimbursement rate, rather than less expensive options, despite evidence that all treatments yield similar outcomes.”

The study was funded by the American Society for Radiation Oncology (ASTRO). In a statement, ASTRO Chairman Colleen A.F. Lawton, MD, said "Dr. Mitchell's study provides clear, indisputable evidence that many men are receiving unnecessary radiation therapy for their prostate cancer due to self-referral. While I am a prostate cancer specialist impassioned to eradicating the disease, I am equally dedicated to utilizing these powerful technologies prudently and in the best interest of each individual patient. We must end physician self-referral for radiation therapy and protect patients from this type of abuse."

LUGPA contends that ASTRO’s motivation for seeking an end to ancillary services is to recapture lost market share by eliminating competition in the use of IMRT—a charge Lawton has denied.

, Deepak A. Kapoor, MD, and Judd W. Moul, MD, noted Mitchell’s finding that 32.3% of patients with newly diagnosed prostate cancer who sought treatment from integrated urology groups in 2005-2010 received IMRT. They said that percentage is nearly identical to that of similar groups of patients tracked in historical studies going back as far as 1992, before group practices offered in-house radiation services.

They added that, according to Mitchell’s data, active surveillance rates were nearly the same between integrated groups and groups that refer patients out for IMRT; active surveillance rates increased in large groups after they acquired IMRT equipment; and as IMRT use has increased, brachytherapy administration has decreased, a pattern they said mirrors national trends and practice guidelines.

Finally, Kapoor and Moul argued that Mitchell’s control and study groups were not well matched, that the cited percentage of NCCN IMRT use was too low to be credible, and that the multidisciplinary case discussions that now occur in large urology groups have contributed to more patients opting for IMRT.

“Shifts in healthcare delivery patterns are inevitable—and healthy&mdash;as medicine becomes more integrated, historical monopolies over certain services are eliminated, and patients seek care in specialized treatment centers that are convenient and cost-effective,” the doctors wrote. “The focus of any responsible physician should be on ensuring access to affordable care that produces the best results&mdash;not on where that care is delivered.”

	Mitchell JM. Urologists' Use of Intensity-Modulated Radiation Therapy for Prostate Cancer. 

Urologists who treat men with prostate cancer are 2.5 times more likely to refer patients to intensity-modulated radiation therapy centers, especially if they have a financial stake in the IMRT center.

Urologist Ownership of Imaging Centers Affects Self-Referral Rates

		Source: Association of Community Cancer Centers. "2013 Trends in Community Cancer Centers"

The highest expense reported by community oncology practices continues to be attributable to drugs and biologics, according to “2013 Trends in Community Cancer Centers,” a survey sponsored by the Association of Community Cancer Centers (ACCC).

That line item category accounts for 37% of expenses, followed by staffing costs (31%). Further, the survey reveals that 72% of an oncology practice’s drug budget resides in the pharmacy, as compared to 21% in the oncology program budget.

To maintain financial stability, oncology practice managers often look to cost containment and cost reduction measures. It’s not surprising, then, that almost half (48%) of the practices surveyed report purchasing their drugs through multiple distributors. That number is up slightly from last year’s survey (42%) and down slightly from the 2011 survey (51%).

According to this year’s survey, 25% of practices purchased injectable drugs from specialty pharmacies. That’s down from last year’s survey in which one in three practices reported obtaining injectable drugs from specialty pharmacy. Interestingly, 20% of respondents reported that they were not sure if injectable drugs were purchased from a specialty pharmacy. According to the ACCC, “using specialty pharmacies is a challenge for oncology practices with regard to operations, reimbursement, patient safety, and institutional liability.”

“Trends in Community Cancer Centers” is an ongoing survey of the ACCC membership. More than 18,000 cancer care professionals from approximately 900 hospitals and more than 1200 private practices are affiliated with the ACCC.

 Association of Community Cancer Centers. “2013 Trends in Community Cancer Centers” 

http://www.accc-cancer.org/surveys/pdf/2013TrendsinCommunityCancerCenters_GF_Final.pdf

The highest expense reported by community oncology practices continues to be attributable to drugs and biologics, according to "2013 Trends in Community Cancer Centers," a survey sponsored by the Association of Community Cancer Centers.

Drugs and Biologics Account for Largest Practice Expenses

Local community oncology practices face economic pressures from all sides. From decreasing private and public reimbursement rates to managing the implications of healthcare reform—these are some of the challenges community practices must navigate.

But one oncology practice in Florida seems to have been able to meet these challenges by adapting its practice model, taking advantage of economies of scale, and identifying new revenue streams, while still providing quality care and keeping its oncologists satisfied professionally.

Florida Cancer Specialists (FCS) was established in 1984 as a small group practice, and quickly grew to amass over 160 physicians, 100 nurse practitioners, and more than 70 clinical sites within its network. The practice and its remarkable success story was highlighted in a recent 

Because of its size, FCS is able to provide newer (and more expensive) cancer therapies to its patients, something that small groups may find cost prohibitive. Providing care in a location that’s close to home means patients avoid long and difficult trips to large academic centers or hospitals. In addition, FCS has centralized many of its infusion services, resulting in optimal inventory control and rapid delivery of chemotherapy agents to clinic patients. FCS has also developed a retail pharmacy that’s managed by experienced pharmacists who deliver clinical care. Additionally, financial counselors are available to advise patients about the high cost of therapies.

Pathology and radiology services have also become integrated services provided by FCS. Bone marrow biopsies and flow cytometry specimens are reviewed by pathologists, and results are populated automatically and seamlessly into patients’ electronic medical records (EMRs). Implementing a coordinated EMR system was a cornerstone to FCS’s success, especially from the payer perspective.

Corporate governance infrastructure was set up to encourage partner physician input, with the practice divided into eight regions. Each region selects a physician representative to serve on the FCS executive board, governed by the managing partner and CEO.

To read more about FCS’s road to success, click here: 

One oncology practice in Florida seems to have been able to adapt its practice model, taking advantage of economies of scale, and identifying new revenue streams, while still providing quality care and keeping its oncologists satisfied professionally.

Tony Berberabe, MPH

Articles

Receiving Chemotherapy in a Hospital Can Cost Up to 47% More Than in a Physician's Office

IOM Issues Recommendations to Improve Cancer Care Delivery

Urologist Ownership of Imaging Centers Affects Self-Referral Rates

Drugs and Biologics Account for Largest Practice Expenses

How One Oncology Practice Took Advantage of Economies of Scale