Experts provide insight on future trends in oncology reimbursement patterns at a seminar in San Jose

Oncology reimbursement experts outlined a grim picture for community oncologists at a recent seminar in San Jose sponsored by the Association of Northern California Oncologists.

“Not everyone will survive [the coming changes],” said Jim Koeller, professor of medicine at University of Texas, Austin College of Pharmacy. “This will force a lot of consolidations, and those who survive will have to be leaner, stronger, more efficient and just plain better.”

He pointed to the changes that nephrologists and dialysis centers went through in the ’90s, as an example of what oncologists should expect.

“Medicare cut reimbursements for dialysis severely, but are people with kidney failure not having dialysis? Of course not. Dialysis centers have improved their business models and are making money,” said Dr. Koeller.

Transparency, the extensive documentation of the quality of care given, will be a code phrase of the future and the use of EMR (electronic medical records) will be essential. Community oncologists will need to standardize their treatment strategies and chemotherapy regimens to ensure consistent patterns of drug use and to be able to demonstrate control of resources with positive outcomes. Essential to success will be the management of growth factor utilization and limiting the use of multiple lines of chemotherapy.

To survive the changes in future reimbursement patterns, oncologists will need to better manage their infusion center.

In community and hospital oncology practice, chemotherapy infusion is the oncologist’s procedure, just like bronchoscopy is the pulmonologist’s procedure.It is essential to control costs, and know exactly what the cost per hour of chair time is.
“The most cost effective procedure in a community oncology practice is the one hour infusion,” said Dr. Koeller. “Do you know what revenue is generated by that unit of work? You must if you expect to stay solvent.”

Practices need to work on improving efficiency. There will be more emphasis on quality, pay for performance and transparencies in practices. Dr. Koeller concluded that oncology practices must have the data to show third parties that they can control costs, manage resources and still be able to provide quality care.
“Benchmarking will be critical, and he who has the most data will be king,” said Dr. Koeller.

“If you read Kafka, you understand the Medicare reimbursements program” Bobbi Buell of P4 Healthcare offered in her opening remarks. The Center for Medicare and Medicaid Services plans to implement a variety of changes to the reimbursement system that is expected to result in even more reductions in 2007.

As Medicare occupies a greater percentage of the country’s gross domestic product, there will be an inevitable drive to reduce government costs. Factors that drive spending growth include increasing volume and intensity of office visits, laboratory testing, physician-administered drugs and a huge increase in diagnostic imaging. Multiple formulas to control spending, including Sustainable Growth Rate are fundamentally flawed and create anxiety every year as Congress reviews whether to enact or amend the mandated adjustments, Buell said.

This year’s SGR fix includes an extension of the Recovery Audit Contractor audits beyond the test states, and the return of the requirement to report hemoglobin and hematocrit as “quality indicators” for cancer anti-anemia drugs in 2008.

The recovery audits are conducted by outside contractors who are paid according to the money recovered from errors made in claims submission. Practices are advised to respond quickly and cooperatively to such audits.

The requirement for budget neutrality will strain Resource Based Relative Value Scale , and may result in reduction of reimbursements in 70 percent of physician services. Since Average Sales Price has become entrenched as the primary method of calculating reimbursement for drugs, practices will have to monitor closely for “underwater” drugs, or drugs that are reimbursed at less than their cost.

Also remember that the Demonstration Project was not renewed, so there will be no point in attempting to submit the documentation formerly required for it. “96549 (the facility fee code) is still a valid code, and should be billed. Many practices have made a mistake by not doing this.”

Warfarin management has its own codes —99363 and 99364— and can be used for anticoagulant management services. Given the time and care involved in taking care of such patients, it will behoove practices to learn to use these codes.

Buell also strongly cautioned oncologists about consultations.

“Billing for consultations will require care, and a request from another physician must be clearly documented in both the receiving and referring physician charts,” warned Buell.

At the conclusion of her remarks, Buell cautioned practices to be prepared for chaos surrounding the issue of National Practioner Identification numbers and advised everyone to “automate everything you can that will help with understanding your data and benchmarking.

The billing and administration of an oncology practice is expected to get more complicated, and physicians must be prepared.

—By Jeffrey Dresco

Jeffrey Dresco is owner and proprietor of MDRx, a medical billing service based in Morgan Hill, CA.

Posted on February 14, 2007 09:10 AM