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Stakeholder Integration Needed to Address a Flawed Reimbursement System

August 2014 Vol 7, Special Issue ASCO 2014 Payers' Perspectives in Oncology - Payers' Perspectives

As usual, ample information pertaining to payers was available at this year’s American Society of Clinical Oncology (ASCO) meeting. The oncology space continues to be an area of challenge, and the appropriate management of patients with cancer has become a moving target.

This year’s meeting provided information on and analysis of many pertinent topics, such as patient affordability, measures of quality in cancer care, changing models of reimbursement, and relevant pharmaceuticals in the pipeline, all of which are issues discussed within the payer community.

Considering the large number of new and upcoming cancer drugs, including those carrying a 6-figure annual cost, affordability is an obvious issue in oncology for all stakeholders, including patients, providers, and payers.

The cost of cancer care is currently a great concern and is expected to remain a major contributor to the issue of affordability of treatments for cancer, as well as to the affordability of insurance coverage itself. Without health insurance or subsidized coverage through another vendor, few patients would be able to pay out of pocket (OOP) to cover all of the required expenses.

According to a study presented at ASCO 2014 by Lena Van Nimwegen from Duke University and discussed in this issue (see article on page 13), nearly 40% of 300 patients with cancer experienced higher financial burden than they had expected, and 16% experienced “high or overwhelming” financial distress. These data are collected from patients with an annual median household income of $60,000, and the majority (97%) of these patients had prescription drug coverage. The median monthly OOP cost was $591, for a median of 4.6 months.

On the positive side, however, within this study, the amount of subjective financial distress had no correlation with the amount of time a patient received treatment. One can imagine the potential financial burden on someone with this type of income having the maximum high- deductible level. Outside of the individual insurance market, copay/coinsurance and deductible levels, maximum per-prescription levels, and OOP maximums are popular discussions with insurance agents and human resource executives within small and large employer companies.

Value in Cancer Care
It is hard to measure the value of healthcare without the ability to measure its quality. For the past several years, ASCO has addressed this through its Quality Oncology Practice Initiative (QOPI) program.

The goal of the QOPI is to promote excellence in cancer care, by helping hematology/oncology practices create a culture of self-examination and improvement through the use of prespecified measures, feedback, and improvement tools. ASCO has continued to be progressive within the measure and methodology of this program. The QOPI certification for practices is similar to the National Committee for Quality Assurance accreditation for health plans.

Lowell E. Schnipper, MD, Chair of ASCO’s Value in Cancer Care Task Force, noted at the meeting that the task force is focusing on “patient-centeredness”.

A goal of ASCO’s value initiative is to give oncology providers the skills and tools to assess the relative value of therapies and to use these in discussing treatment options with their patients. The thought is that a transparent, clinically driven, and methodologically sound method for defining and assessing the relative value of treatment options would drive change among various stakeholders to encourage the promotion of high-value care.

The Value in Cancer Care Task Force is hoping to outline a way of quantifying a score to incorporate efficacy, toxicity, and the cost of treatment to proportionate the degree of a drug’s benefit. ASCO is in a great position to implement this type of approach. This may be analogous to the quality-adjusted life-year measures or to incremental cost-effectiveness ratios that are often assessed by countries outside the United States to determine coverage and utilization policies.

US payers and other healthcare stakeholders have been waiting for a sound, responsible way to determine the coverage of highly valuable drugs, including cancer drugs, in the most appropriate way.

Payment Reform
Many healthcare stakeholders will likely agree that the fee-for-service (FFS) reimbursement model is an antiquated system with perverse incentives that lacks the ability by itself to reward high-quality healthcare, and oncology is no exception.

Various payers, both large and small, are piloting different strategies in oncology to replace or to supplement, with or without financial risk, the traditional FFS model with a new reimbursement model. One example is UnitedHealthcare’s payment pilot, which has replaced FFS payments with practice-specific episode payments at select oncology groups, with the intent to continue rolling out the program (

Several presentations at ASCO 2014 centered on payment reform and focused on paying for the value of care, not just the quantity of care. One example was given by Jeffrey Ward, MD, who presented a new ASCO workgroup proposal to reform the payment system in oncology.

Dr Ward discussed the ideal path for reimbursement if the current system is not only tweaked but actually being rebuilt from scratch (see article on page 8). According to Dr Ward, the committee consensus involved a core monthly bundled payment that would be adjusted for quality, pathway utilization, resource utilization, and clinical trial utilization.

This new model would also include the use of pharmaceuticals. Dr Ward believes that the monthly payments could be phased in over time, and although Current Procedural Terminology® codes do not track these utilization aspects directly, 9 codes could replace 63 codes and ultimately align incentives.

Active Involvement
The extent of topics presented at the meeting this year on the value of cancer care was impressive. There is a need for all stakeholders to be actively involved in creating solutions to a currently flawed system of traditional FFS reimbursement.

Across the country, great new payment models are under way. As these models are being modified to optimally reward quality and patient-centered care, their expansion is inevitable.

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Last modified: August 30, 2021