The debate continues to rage over whether the difference in the cost of oncologic care between outpatient hospital and physician private offices is appropriate. There is a particularly large pricing gap for chemotherapy administration. Numerous studies have shown that chemotherapy in the outpatient hospital setting costs more than in the private physician office, with a recent report showing it to be 60% more expensive. An economic study by Lucio Gordan, MD, medical director in the Division of Quality & Informatics at Florida Cancer Specialists & Research Institute, and Xcenda found that 1 year of all-related treatment for 3 common cancers— lung, breast, and colon&mdash;was as much as $90,000 more costly in the hospital outpatient setting than in the private office. The higher cost was largely due to chemotherapy charges, although physician visits contributed to the added expense in the hospital outpatient setting. Compounding this was the finding that emergency department visits after chemotherapy administration were more frequent in the hospital setting: 9.8% versus 7.9% in the private physician office.

In defense of these higher costs, hospitals correctly cite that they have “hidden” expenses that don’t exist in the private office setting. These include charity care, such as expensive chemotherapy treatment of the underinsured, who are turned away from private physician practices. Also, there are state rules for staffing and facilities that do not apply to private office practices. These also generate expense. In addition, many services provided in the hospital inpatient setting are paid for with outpatient revenues. Unlike a private practice, a hospital must provide services on a 24-hour, 7-day-a-week basis, such as emergency and inpatient care, regardless of the level of utilization. Thus, fixed costs are very different for a hospital from those for a private physician office, and comparing the appropriateness of total revenue might seem unfair. In addition to costs, another issue is the appropriateness of care and clinical outcomes for patients treated in hospitals versus private clinics. Hospitals claim to produce better outcomes, and this may be true, but similar claims are made by physicians in private offices. The fact is, there are no reliable, properly risk-adjusted data to make such comparisons, but such data seem warranted and should be generated.

So where do we go from here? How about—first and foremost&mdash;ensuring that each patient receives the proper care every time&mdash;neither too little nor too much&mdash;regardless of the site of service. Next, if a comparison must be made, level the playing field by normalizing the cost comparison. Give hospitals credit for costs that private physician offices do not incur. Then use proper risk adjustment, including consideration of patient socioeconomic status, and do a side-by-side comparison to determine whether quality is truly better in either of the settings. There is no doubt hospitals play a critical role for oncology care in any community.

Hospitals need to maintain operating margins so that emergency departments, inpatient beds, and intensive care units remain available for patients with cancer. Even without an analysis, there is a clear role for private physician outpatient oncology to provide convenience and lower the total national tab for cancer. In the end, I suspect both settings will be found to be beneficial and necessary.

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The debate continues to rage over whether the difference in the cost of oncologic care between outpatient hospital and physician private offices is appropriate.

Hospital Cost Comparisons Should Be Fair

More than 2 years after the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the progression toward valuebased care has challenged oncologists to assume an unprecedented degree of accountability for the well-being and holistic care of their patients. Those practices participating in the Oncology Care Model (OCM), with its extensive practice transformation requirements, got a head start. Now the Meritbased Incentive Payment System (MIPS) compels many more to evaluate their clinical, financial, and administrative readiness for these new reimbursement models. What will determine success? The ability of practices to increase control over the drivers that affect quality and costs of care—across all patient conditions and settings of care.

Fortunately, efforts to achieve the highest-quality cancer care in a cost-efficient manner have been many years in the making, with results that can guide practices on their value-based care journey. Such is the case with Innovative Oncology Business Solutions (IOBS), which received a $19.8 million award in June 2012 from the Center for Medicare & Medicaid Innovation to develop and test a new community oncology medical home (COME HOME) model.

The COME HOME program engaged 7 practices across the country in service of a goal at the heart of value-based care: improve the quality and experience of patient care while bringing down its overall cost. Our approach was to advance integrated, coordinated care to patients with cancer through triage pathways, enhanced access, and treatment pathways. To achieve the greatest benefit for patients and practices alike, COME HOME specifically targeted unnecessary and costly inpatient hospital admissions, visits to emergency departments (EDs), and readmissions.

Participating practices mobilized enhanced services including patient education and medication management counseling; team care; 24/7 practice access (telephone triage, night/weekend clinic hours, and on-call oncologists); on-site or near-site imaging and laboratory testing; and admitting physicians who shepherd patients through inpatient encounters, avoiding handoffs and inpatient admissions, to ensure seamless, safe, and efficient care. In the 3-year course of the program, compelling results included:

A decrease of 7.2% in the overall cost of care

Declines in inpatient hospital admissions (12.5%), 30-day hospital readmissions (11.7%), and ED visits (6.6%)

Improvements in quality of life and quality of care for patients Although the potential of COME HOME was not always easy for the participating practices, the lessons learned provide a road map for success with value-based reimbursement models, including:

Focus on high-risk patients as they reach critical decision points. For our practices, patients amid specific treatments are those at greatest risk for adverse events such as nausea and pain that, if not addressed in a timely and compassionate manner, can quickly escalate.

Prioritize avoidance of the highest-cost events. COME HOME focused on the drivers of greatest avoidable cost and major sources of distress for patients: unnecessary inpatient admissions, ED visits, and readmissions.

Recognize that practice transformation is necessary to optimize results. COME HOME practices were led by committed leadership willing to enact cultural change in support of more holistic patient support and then back that up with staffing and workflow models to enhance triage capabilities across all care settings.

With the conclusion of the COME HOME program, IOBS has focused on broadening access of COME HOME resources for the entire oncology community now embracing value-based care through MIPS and the OCM. One important milestone was our collaboration with ASCO to replicate and expand our tools across the United States. This partnership was launched in November 2016.

Advances in technology have also created new opportunities to amplify the impact of COME HOME’s efforts. In August, we announced a partnership with Integra Connect, which provides innovative technologies and services to leading oncology practices as they transition to value-based care. Together, we will embed COME HOME protocols in Integra Connect’s OCM and population health solutions so practice staff can provide aggressive symptom management as part of their patient triage and care coordination workflows and then track and report on results through advanced analytics. Triage activities enabled through Integra Connect’s solutions will focus on first responders (phone operators) and nurses, who will be guided through step-by-step clinical decision making as they discuss and assess a wide variety of patient issues such as pain, nausea, and vomiting. The technology will afford an unprecedented ability to incorporate and integrate COME HOME’s best practices in the daily operations of a practice.

As oncologists grapple with the new realities of value-based care, it is useful to remember that the charge toward increasing the quality of outcomes in the most cost-efficient manner did not start with MACRA. There are lessons, backed up by decisive data, that can guide practices in their efforts: target the highest-risk patients; enable accessible, team-based care; and confront issues head-on before they escalate into unnecessary use of high-cost settings. Resources such as those from the COME HOME program, amplified and extended by the latest technologies, mean that tools at oncology’s disposal are more robust than ever. All things considered, the conclusion is a heartening one: Practices will do best by new reimbursement models when they do well by both their patients and the greater system of care upon which we all rely.

More than 2 years after the passage of the Medicare Access and CHIP Reauthorization Act of 2015, the progression toward value-based care has challenged oncologists to assume an unprecedented degree of accountability for the well-being and holistic care of their patients.

Proving That Value-Based Care Is Possible

Congressional “right-to-try” legislation could make investigational drugs available to desperately ill patients sooner in the trials process, but there are substantial risks, said a panel of experts at the Patient-Centered Oncology Conference, held November 16-17 in Philadelphia, Pennsylvania.

Earlier in the clinical trials process, less is known about the drugs, which may be highly toxic and may have no efficacy. Furthermore, the House of Representatives’ version of the bill would allow companies to charge any amount for access to their investigational drugs. That is a scary proposition due to the potential for cost exploitation, members of the panel said.

“Any of those drugs can be made available to patients who are desperate and who might be encouraged to [try them] by an unscrupulous person or company that is selling the product for perhaps thousands of dollars,” said panelist Diana Zuckerman, PhD, who is president of the National Center for Health Research in Washington, DC.

Currently, for the purposes of expanded access, companies can charge only for the cost to produce the drug, or they can charge nothing at all. This removes the profit motive. “A lot of times, the companies say no, and a lot of times they say no for good reasons. They know that this isn’t something that is likely to work,” she said.

Whereas now patients may apply for access to investigational drugs that have passed phase II and phase III trials, the proposed legislation would make drugs available that have successful phase I trial results and remain under investigation. The current standards were meant to ensure that at least some evidence existed for a belief that a drug could help a patient. The right-to-try legislation would weaken that standard—perhaps too much, members of the panel said.

Even if a phase I trial has been successful, it most likely involved healthy volunteers, or patients who were substantially healthier than the typical patient who would seek expanded access as a last resort, having exhausted all approved treatment options. For this reason, the evidence may mislead a determination whether an investigational drug would have any value for an applicant through an expanded access program, panelists said. One of the problems, they said, is that legislators are under intense pressure to make these drugs more available to patients. A case in point is the Josh Hardy fight of several years ago over an antiviral agent being investigated by Chimerix of Durham, North Carolina. The company was demonized in the press until it relented and made the agent available to the young boy, whose family wanted the drug to manage a virus that resulted from immunosuppression treatment. The boy’s condition did improve following use of the drug, but Hardy eventually succumbed to his illness.

The right-to-try legislation, a version of which has already been approved in the Senate, would virtually remove the FDA from playing an oversight role in access to these investigational drugs. Currently, patients who want access must obtain sponsorship from their physician, must obtain permission from the biopharmaceutical company making or testing the drug, must obtain approval from the FDA, and also must obtain approval from a medical institution’s institutional review board (IRB).

These steps all take precious time away from the patient who may have only weeks to live, which is one of the objections to current policy. But the panelists noted that each of these stages represents an important safeguard and it is important keep protections in place while streamlining the process to ensure that drugs are available to patients who could truly benefit from them.

The FDA has made enormous strides in recent years to speed up the drug approvals process and to simplify the application process for expanded access to investigational drugs. The FDA announced in October that consent would now be needed from only 1 IRB member as opposed to the full panel.

The FDA’s track record on approving investigational drugs for expanded access is at 99% and this demonstrates the agency’s commitment to this program, the panelists noted, but they said the FDA is still much too soft on insisting on documentation compliance. Once these patients gain access, their doctors are not submitting reports on adverse events and outcomes as often as they should.

“Compliance, as I understand from the FDA, is as low as 60% in providing reports,” said panelist Marjorie A. Speers, PhD, executive director of the WCG Foundation, of Atlanta, Georgia, which advocates for patients with expanded access needs. “One thing we need to do is educate physicians who decide they want to use an investigational drug through expanded access. They need to know what their roles and regulatory responsibilities are.”

Zuckerman said that she believed the reporting compliance rate was as low as 30%. These comments baffled an audience member who recalled the struggle decades ago to make investigational drugs available to patients with HIV/AIDS. There was little hope for these patients and the disease was so widespread that pressure on companies and regulators to broaden access was intense. Even then, there was strong emphasis on collecting information about the effects these drugs were having on these nontrial users. “If you didn’t fill out the paperwork, you didn’t get next month’s supply of drug, so I’m a little surprised about these comments,” the clinician said.

One thing that should not go unrecognized is that as many as 85% of investigational drugs fail during human trials, the panelists said. This increases the odds against a patient deriving any benefit from a drug that has been tested only at the phase I level.

Panelist W. Kevin Kelly, DO, said patients often have an exaggerated belief that investigational drugs can help them. There is an educational step that has to come first, and it takes time to undo the damage that hype and misplaced expectations have caused. “I have patients coming to me all the time asking about investigational drugs,” said Kelly, who is a professor of medical oncology and urology and the director of the Division of Solid Tumor Oncology at the Sidney Kimmel Medical College, Thomas Jefferson University, in Philadelphia.

The drugs may or may not be appropriate, the patient’s disease state may not be a match, and there may still be FDA-approved drugs that are worth considering, Kelly said. “What is the disease, what is the treatment, and what is the reality?” Kelly said.

Even for agents that have advanced through the trials process and are in widespread use, substantial knowledge is still lacking that is essential for deciding how and when to use them. “The biggest example is checkpoint inhibitors,” Kelly said. “We’re just starting to understand the immunologic toxicities in the later stages [of disease].”

This makes it hard to believe that physicians in remote areas who are not as well equipped with staff, equipment, and up-to-date training can do an adequate job of vetting investigational drugs. “It’s all about safety. If you have a physician who’s never seen a drug and is in the middle of nowhere trying to get it to the patient, there are safety issues there,” Kelly said.

Speers said that not enough is done to ensure that physicians have exhausted all available options before applying for an investigational drug. She said teaching institutions and clinical research centers should make their services available to help with this process of identifying needs and solutions.

The panelists agreed that much more should be done to improve the reporting of adverse events and completion of documentation. It’s not just about a single patient who needs a drug. It’s about collecting information of vital importance to larger populations, they said.

“There is something that can be learned from these individual patient uses by reporting serious adverse events, and—more important&mdash;by providing the summary report to the FDA at the end of the treatment, because it tells us about the treatment use and what the outcome was for that particular patient,” Zuckerman said. Another goal should be to tailor the access process so that it’s easier and simpler but maintains a sufficient level of protection for the patient, members of the panel said.

Speers said a decision should be made whether the goal is to make more drugs available to more patients or simply to improve the way the program functions so patients who could actually benefit from investigational drugs can get them quickly. “We don’t want expanded access to become a substitute for clinical trials—for the drug approval process. We already have a drug approval process&mdash;it just could be more effi- cient,” Speers said.

“In the ideal situation, I would want to improve the clinical trial process so we don’t have to use expanded access,” she said.

Congressional "right-to-try" legislation could make investigational drugs available to desperately ill patients sooner in the trials process, but there are substantial risks.

Right-to-Try Bills Push the Needle on Risk

A caseload management tool developed at the Mitchell Cancer Institute (MCI) at the University of South Alabama offers a comprehensive portrait of a patient’s condition that helps oncology nurse navigators to allocate their time and resources efficiently and enables managers to optimize patient care by assigning appropriate caseloads. The Association of Community Cancer Centers (ACCC) recognized the value of the analytical instrument at its recent conference by issuing MCI a 2017 Innovator Award for the accomplishment.

Acuity tools generally use a more limited set of measures to determine staffing needs, improve patient care, and control costs. Healthcare workers at MCI wanted to do a better job of distinguishing between patients who needed very few resources and those who needed more attention, according to the Rev Diane Baldwin, RN, OCN, CBCN, manager of quality assurance at MCI.

Table 1. The Mitchell Cancer Center Institute Activity Tool Evaluates Patient Status From Multiple Angles

MCI’s new Oncology Navigation Acuity Tool incorporates 12 measures of the level of care required by each patient, Baldwin said (Table 1). This enables the MCI tool to provide a broad assessment of a patient’s health and needs status. “Some of the factors include staging and diagnosis, depression score, performance score, comorbidities, family support, number of treatment modalities the patient is undergoing, and recent hospitalizations,” said Baldwin.

Baldwin, a United Methodist minister, presented her experience using the tool during the ACCC’s 34th National Oncology Conference, held October 18-20 in Nashville, Tennessee. She emphasized the importance of a key measure included in the tool that takes into account the nurse navigator’s own assessment of the patient. “Patients are more than a score,” she said. “There are times when the patient’s scores add up to an acuity number, but there are issues that the nurse navigator knows about the patient that will affect that score.”

Table 2. Acuity Scores Predict Patient Needs (n = 247)

She described the case of a patient who was suffering from depression because of the recent death of a spouse on whom she had depended during her cancer treatment. The oncologist advised the patient to return in 6 months for followup care, but the nurse navigator determined from the patient’s acuity assessment that she needed immediate referrals for grief counseling, a support group for widows, and increased phone contact. That was the course of action taken, and this represented a valuable intervention that might not have happened without the expanded assessment possible through the MCI tool. Based on 247 patients treated over 6 months at MCI, the services provided per month broke down as follows: the number of patients handled was 144, the number of in-person visits, 97; phone calls, 56; referrals, 13; clinical interventions, 30; and “stat” interventions, 4. Stat interventions are those that prevent unnecessary ED visits or hospital admissions (Table 2).

When evaluating patient visits on the basis of individual acuity tool scores for need, Baldwin found that 29% of patients were high acuity and accounted for 41% of visits. “These high-acuity patients are using the most resources,” she said. When she looked at stat interventions, she found that 29% of patients had high acuity scores, and 58% of those required stat interventions.

Baldwin said training for staff and use of the acuity tool are minimal and easy. The tool can be customized for individual institutions and has accurately identified which patients need more services and resources.

“Using the tool, I know exactly how much my nurse navigators can take on, based on acuity and not so much on sheer numbers,” she said. “It has given us a clear picture of where we expect our utilization, referrals, time, and interventions to come from. This helps us to plan our navigation team much better than before implementing the tool.” It makes sense to have a broader set of measures embodied in an acuity tool because giving patients the care they need to successfully battle cancer often entails looking beyond their mere oncologic needs. The acuity tool developed at MCI can help to accomplish this while also improving the allocation of limited resources, Baldwin said.

“My own personal feeling is that we are in this field because we have a passion for providing care for our patients. I want to give exceptional care in a way that’s cost effective, too. That’s the goal of this tool—to make a positive impact on our patients, provide exceptional care, and continue to optimize our resources and manage them effectively,” she said.

A caseload management tool developed at the Mitchell Cancer Institute at the University of South Alabama offers a comprehensive portrait of a patient's condition that helps oncology nurse navigators to allocate their time and resources efficiently and enables managers to optimize patient care by assigning appropriate caseloads.

With the Aid of an Upgraded Acuity Tool, Fewer Patients Slip Through the Cracks

The end of the year is always hectic for oncology practices, but 2017 is proving exceptionally busy as CMS' Quality Payment Program (QPP) transitional year comes to a close. Many practices participating in the Merit-based Incentive Payment System (MIPS) are hyper-focused on their data collection and organization for performance year 2017. Although it is easy to focus on just the current year, oncology practices should not neglect the opportunity to plan for 2018. For all practices—regardless of the extent of their participation in MIPS&mdash;this is the time to get organized and develop an action plan so they can hit the ground running next year.

Although some practices may feel like they have time to get organized or are on the fence about participating in 2018, next year will be crucial to oncologists for several reasons. At AmerisourceBergen’s Quality Reporting Engagement Group (QREG), we estimate that the average 2019 financial costs for nonparticipation in 2017 will be approximately $8,283 per oncology physician, excluding Part B drug revenue, and $74,680 including Part B drug revenue. This is based on ION Solutions’ latest InfoDive benchmarks from August 2017 containing financial data for 450 physicians.

Based on how they perform, oncologists will receive either an upward or downward adjustment to their Medicare Part B payments. In other words, oncologists will pay either more or less, up to a certain percent. We know that these adjustments will continue to occur more often, affecting 4% of payments in 2019 and up to 9% in 2022. Oncologists could see a substantial cut or increase in Medicare payments, depending on their MIPS score.

Adjustments are felt 2 years after the performance year, so the actions a practice takes today will affect the future. Most important, the proposed rule in front of CMS that outlines amendments to the 2018 QPP indicates that the reimbursement adjustment could be applied to Part B drugs furnished by a MIPS-eligible clinician. We are all waiting to see how this is addressed in the MIPS final rule, due to be published in early November. With so much money in question over the long term, participating will ensure a practice’s financial viability going forward. Participation in MIPS also has an impact on a practice’s reputation. A major goal of the QPP is to foster patient engagement. Medicare will publish MIPS scores publicly on its Physician Compare website, encouraging patients to shop around and truly act as prudent consumers of healthcare. With a click of a button, a patient can see a physician’s entire MIPS score and compare that with the performance of all physicians, not just other oncologists.

Scores are determined by the amount of data that practices submit, whether it is simply test data (1 quality measure or 1 improvement activity for any point in the year), partial data (90 days’ worth), or full data (for the complete performance year). Because composite performance scores and adjustments are determined based on the amount of information submitted and the completeness of the data, we recommend that practices shoot for the stars and submit either 90 days’ or a full year’s worth of performance data from 2017. That would give CMS more information to weigh and ultimately give patients a more complete view of a practice.

Recently, our oncology practice clients have been asking us how to prepare for a complete submission in 2018, learn all the rules, and engage all staff. For other oncology practices with the same questions, I have some practical advice. To effectively participate in MIPS, by the end of this year, choose an internal champion—someone who can dedicate significant time and energy to organize and execute the practice’s effort over the next year. A small practice that cannot fully dedicate 1 person can assign a task force of 3 or 4 people to share the responsibilities. Either way, the goal between now and the end of this calendar year should be clear: Be able to articulate how the practice will report to MIPS in the year ahead.

So how do you get there? Allow the champion or task force an immersion period of 4 to 6 weeks to review the regulatory components and performance categories, study the 19 quality measures for oncology, and build an action-plan framework. The framework should lay out how the practice plans to report—will it be as a group or as individuals? From our experience, oncology practices may want to strongly consider reporting as a group. If providers decide to report individually, a practice may lose a level of control. On the other hand, unengaged members may drag the score down for an entire practice that reports as a group.

The framework should also indicate the reporting pace—will partial or full data be reported? As previously mentioned, the best way to maximize a practice’s MIPS payment adjustment is by fully participating (either 90 days or the full year) with data. Then, outline the quality measures that fit the best. Before deciding on the which 6 to report on, the team should evaluate the practice’s electronic medical record (EMR). Today, EMRs are subjected to rigorous certifications for various measures. Call the EMR vendor to find out which of their measures can be reported on. From there, the team will understand the data and workflows needed to capture and monitor for reporting after the first of the year. Once these aspects are outlined, the next step is selecting appropriate improvement activities and monitoring the practice’s score in the Advancing Care Information category.

An important part of monitoring progress entails uncovering what is already being done. For example, is the practice already reconciling medications? How are patient engagement and the exchange of information using the EMR promoted—is there direct messaging for providers to communicate or a portal where patients can see results, schedule appointments, and request refills? Chances are, much is already happening in these areas. Develop a list of how the practice supports care coordination, beneficiary engagement, and patient safety. Then, figure out how the components are being documented internally or by the EMR. Outline the programs that can evolve and become stronger, and then determine how to monitor them over the performance period.

Just as it was under Meaningful Use, security continues to be a required measure. CMS wants to know how practices are protecting patient information, such as completing or reviewing a security risk analysis, conducting Health Insurance Portability and Accountability Act (HIPPA) training for staff members, and auditing the technical, physical, and administrative safeguards in place for protecting patient information and the practice as a whole. Determine what areas require focus on for security purposes for the current reporting period.

Heading into the next performance year, use the framework to compile a book of evidence. This physical and digital book should have a section for each performance category and contain data that will be used for reporting. It should also contain screenshots providing step-by-step instructions on how the data were pulled. This level of detail will support the practice during an audit by CMS. Practices have a 6-year audit window in MIPS for each year of data submission—it is not an “if” but a “when” scenario. When the time comes, practices will not have to retrace their steps if year-end reports, supporting data, and background on how the information was collected are neatly organized in a book of evidence. Our QREG team has supported more than 120 audits for practices, and these books of evidence helped us pass every single one. At the end of each performance year, multiple people within the practice should know where the final, physical book of evidence is stored in the office and where the digital copy is saved on the practice’s computer system. Keep in mind that CMS has stated that a book of evidence should be maintained for 10 years.

Before the end of this year, the champion or task force should host a meeting with management and providers to outline the practice’s MIPS plan for the year ahead. By the end of the meeting, attendees should be able to clearly articulate the plan and value of participating. With so much year-end planning happening already, it might seem difficult to dedicate more time and resources to programs like MIPS. However, with payment adjustments increasing every year and the public information available about each MIPS-eligible clinician’s performance scores, oncologists cannot afford not to plan and take advantage of this program. Assembling the right team, building the right framework, and strategizing a game plan before the next performance year will ensure that a practice is on track to succeed.

For practices that do not have staff members who can be dedicated to researching and monitoring MIPS, enlisting an outside consultant is an option. Be sure to choose one who has a proven track record with Meaningful Use and the Physician Quality Reporting System (PQRS).

Jackie Rogers is quality reporting engagement group manager for ION Solutions of AmerisourceBergen.

The end of the year is always hectic for oncology practices, but 2017 is proving exceptionally busy as CMS' Quality Payment Program transitional year comes to a close.

Plan Now for MIPS Reporting in 2018

As CMS moves ahead with payment reforms designed to reduce the total cost of hospital care, the results from a new study show that cancer treatment remains much less expensive at community oncology clinics than at hospitals and that the spending gap between the 2 types of sites may be growing wider.

The total cost of care for patients receiving chemotherapy in hospital outpatient facilities is nearly 60% higher than the same treatment at independent practices, according to the study by Lucio Gordan, MD, medical director in the Division of Quality and Informatics at Florida Cancer Specialists & Research Institute, and Xcenda, a health economics consultancy. The average difference for patients with breast, lung, or colon cancer was $7512 per month, or $20,060 in the hospital setting versus $12,548 at community practices. Annually, the average difference amounted to $90,144 per patient.

The findings are consistent with 10 previous studies between 2011 and 2016 that found hospital outpatient costs were 38% higher on average, according to the Community Oncology Alliance (COA), which released the report. Gordan said the bigger difference in his study may reflect the increased costs of new biologic drugs, more expensive radiology, and higher hospital fees.

A major driver for the cost difference was chemotherapy, which ran 71%, or $3510, higher per month in hospital outpatient departments; the average spending was $8443, compared with $4933 at community practices. Physician visits cost 3 times as much per month—$3316 versus $765, a difference of $2551. The widest gap was seen in breast cancer, which cost 66% more in outpatient settings, followed by lung cancer at 54% higher and colorectal cancer at 46% higher.

Gordan’s analysis differs from some previous studies in that he adjusted for type of cancer, age, geographic region, presence of metastatic disease, comorbidities, and other factors, to ensure that he was comparing similar hospital-based and community patient populations, he said. He also made an effort to consider how patients fared and found that those in hospital settings had more emergency department (ED) visits and hospitalizations after receiving chemotherapy. For hospital patients, 9.8% had ED visits within 10 days, compared with 7.9% for community practice patients.

The study’s main goal is to strengthen COA’s ongoing campaign to fix payment systems that favor hospitals and have contributed to hundreds of acquisitions and closures of independent oncology practices in recent years, Gordan said. He presented the findings at the organization’s annual Payer Exchange Summit on Oncology Payment Reform in October. “This is going to be an evolving battle to get payers to understand,” he said. “This is how we plan to light the fire again. The purpose was to keep people reengaged in the subject because even though we have had 10 studies showing kind of the same idea, nothing really happened.”

Hospitals sometimes argue that their higher costs are justified because they offer services not available in other settings, such as 24-hour EDs, uncompensated care, disaster preparedness, and various specialized services. “These roles are not explicitly funded; instead they are built into a hospital’s overall cost structure and supported by revenues received from providing direct patient care,” the American Hospital Association (AHA) said in response to a set of CMS payment reform proposals. Meanwhile, COA argues that community practices have their own expensive obligations and provide equally good care at a much lower cost.

Nancy Keating, MD, MPH, a professor of healthcare policy and medicine at Harvard Medical School, said Gordan’s study would be better if it had more clarity about who the included patients and payers are and more detail on the patients’ conditions and their office visits. But she said the findings on the whole are consistent with other research supporting the benefits of community medicine. “We don’t have evidence that hospital outpatient department care is better, and certainly for patients who want to get care locally, which makes it more convenient, there doesn’t seem to be any problem with that,” she said. “It might actually have the advantage of saving our healthcare system money and maybe even leading to fewer emergency visits.”

COA Executive Director Ted Okon acknowledged that in specialized cases, patients with cancer do need to be treated at hospitals, but he rejected arguments that large institutions provide better outcomes generally. “The hospitals always throw around those remarks, but they never prove it with data. As we’ve accumulated more data here, the data actually say the contrary,” he said.

The AHA did not respond to requests for comment on the COA study. Numerous individual hospital centers also did not respond or provide comments.

Keating said a top reason for the cost differential is hospital systems’ negotiating power with health plans. By including big systems in their networks, health insurance companies make their plans more attractive to the workers and employers who are their customers. The larger the health system, the more power it has to demand higher payments, creating a strong incentive for further expansion and acquisitions.

While Gordan is focusing on persuading private payers to equalize payments to different types of treatment sites, the federal government is already acting to reduce its spending on hospital-based care. As required by a 2015 budget law, this year CMS put into effect a site-neutral payment policy that cut Medicare reimbursement rates in half for care at new hospital outpatient facilities. The rule, which aims to bring those payments in line with the fees paid to private physicians, applies to outpatient offices built or acquired since November 2015.

“One view of the concern that gave rise to this, as expressed by some members of Congress, the Medicare Payment Advisory Commission, and other groups, is the trend of hospitals buying physician practices and converting what had been a physician practice to an off-campus hospital department,” said Elizabeth Halpern, a partner at the law firm Hogan Lovells in Washington, DC. “Hospitals could buy physician practices, convert them to be part of the hospital, and then get paid for the services they provide there at the hospital rate instead of at the physician rate. For some services, the hospital rate is a lot higher than the physician office rate.”

Halpern said hospitals’ reactions to the new rule have varied. Some went ahead with new outpatient facilities anyway, perhaps with different service offerings than previously planned, while others put them on hold. “Anecdotally, what I’d heard is that some transactions or construction plans that were under way, but hadn’t yet been finalized, may have been stopped because the financial model and the reimbursement that was expected wasn’t going to be there,” she said. Halpern noted that CMS just announced it will slash the outpatient reimbursement rate even further in 2018, from the current 50% of the old hospital rate down to 25%.

Yet, as stated above, the site-neutral payment policy affects only sites acquired or built since November 2015, and the impact of Medicare fee differences “pales in comparison” with the competitive advantage hospitals gain from the 340B drug discount program, Okon said. Close to two-thirds of hospitals get deep discounts on oncology drugs, which are meant to subsidize the cost of treating low-income patients but have the effect of boosting cancer program revenues and motivating hospitals to take over community oncology practices, he said.

CMS is now targeting that program as well. The agency said it will cut Medicare payments for 340B drugs from the current average sales price (ASP) plus 6% down to ASP minus 22.5%. Okon said that because of the “inescapable” evidence of high spending on hospitals, Congress and the Trump administration are finally “turning their attention to that segment of the market that’s driving costs.” The AHA, meanwhile, has called the proposed rule “misguided” and called on CMS to focus instead on bringing down the high cost of pharmaceuticals.

The AHA argues not only that hospitals require high revenues to pay for uncompensated services but also that CMS’ cost-cutting proposals will make it harder for patients to afford or find the care they need. “The patients who benefit from the much-needed 340B program are the ones who will have their access to care threatened,” AHA Executive Vice President Tom Nickels said earlier this year. He likewise described the Medicare fee-cut plan as “yet another blow to access to care for patients, including many in vulnerable communities without other sources of healthcare.” 

Whether payment reforms will harm access to cancer care for low-income patients or underserved populations is unclear. Community oncologists who treat Medicaid patients often send them to hospitals for chemotherapy; low Medicaid payment rates make such infusions money losers for community practices, whereas chemotherapy is generally profitable for 340B hospitals. Payment reforms would reduce hospital revenues, but whether such cuts would lead a hospital to stop offering chemotherapy would likely depend on numerous factors, including its overall financial health and the priority that hospital administrators place on improving revenue margins and expanding their organizations.

Different dynamics are at work with other groups of concern, like patients with lower-end exchange plans. Despite hospital systems’ bargaining power, payers are sufficiently concerned about their high costs that some steer their exchange-plan members to community practices instead, Keating said. As a result, government payment models that encourage hospitals to keep buying up small practices could reduce treatment options for these patients. “If a small practice in your neighborhood gets purchased by the large cancer center, and then a payer decides to just exclude the whole cancer center from your network, you might not be able to get care there anymore,” she said.

Gordan L; Community Oncology Alliance, Xcenda. The value of community oncology: site of care cost analysis. communityoncology.org/wp-content/uploads/2017/09/Site-of-Care-Cost-Analysis-White-Paper_9.25.17.pdf. Published September 25, 2017. Accessed October 31, 2017.

December 2017 | Oncology Business News®

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