Compared with other specialists, medical oncologists are not often the target of malpractice litigation. Even so, they still get sued. In this article, I present some of the important, common issues that I have seen in litigation wherein the oncologist is the defendant. This is based on my 30 years of medical expert experience. Those of us who frequently serve as expert witnesses in the judicial system have learned many lessons from these cases. Such lessons often improve our own medical practice, and aid us in avoiding litigation altogether. Notably, there is virtually no attention paid to these issues either in our training or our educational conferences.

While maintaining a full-time private practice in medical oncology, I have served as an expert for plaintiff and defense attorneys. As such, I have probably reviewed more than 400 cases and testified in more than 100 trials. In the vast majority of these cases, I have been asked to express opinions relevant to causation. Typically, I am asked to render an opinion as to the impact of a purported delay in diagnosis of cancer. However, in a minority of cases, I am asked to opine as to possible negligence in treatment by an oncologist. Such cases are the focus of this report. It should be noted that in order to retain credibility, a medical expert must be willing to work on plaintiff cases, which I have done.

Many cases are generated by less-than-thorough attention to a clinical situation. Some cases relate to misunderstandings and misperceptions on the part of the patient and/or family. Being aware of how patients and families might view us and our decision making can be invaluable in avoiding litigation.

The basic issues of malpractice litigation must be kept in mind when reviewing specific cases. There are three basic and necessary elements to malpractice litigation:

There must be a showing that the physician committed an act of negligence—that he or she fell below the standard of care for the “community” of physicians (in this case, other hematologists-oncologists).

This act of negligence must be shown to be the cause of damage or harm to the patient.

The degree of damages must be assessed and given a dollar value.

All three of these elements must be proven to a reasonable degree of medical certainty or at least be convincing enough to sway a jury or arbitration panel.

In my experience, there are five general categories of issues that seem to yield the majority of cases in which the oncologist is the defendant. Below are examples of each general category with comments about what can be learned from each.

Oncologists can form an opinion as to the nature of a patient’s diagnosis. Even as time goes by and evidence accumulates that physicians may be mistaken, they continue on an erroneous course, rather than stepping back and rethinking the situation. I was asked to review the following case on behalf of the plaintiff:

A 65-year-old patient had surgery for a low-grade sigmoid cancer. Three years later she was found on CT scan to have a presacral mass with a normal carcinoembryonic antigen result. The oncologist concluded that this was recurrent colon cancer, did not feel the need for an MRI or a biopsy, and began the patient on FOLFOX chemotherapy.

This therapy is continued for about four years, along with CT scans every three months that show no change. Even the radiologists raise doubts about the diagnosis in view of the appearance of the lesion and the lack of change over time. Eventually there is some growth of the lesion and it is resected, with the pathology being that of a nerve sheath tumor.

 the damages attributed to this misdiagnosis are the toxicity of the chemotherapy and the emotional damages the patient suffered from being told inaccurately that she had incurable cancer. The initial, erroneous diagnosis without biopsy confirmation was probably below the standard of care, but perhaps defensible. However, continuing the chemotherapy for four years despite no change in CT scans and without having reconsidered the situation was definitely deemed to be negligent.

In this case, the oncologist was simply not able to “rethink” his conclusion that this was recurrent cancer. The oncologist settled the case for a significant amount of money.

I was asked to review the following case from a defense viewpoint:

A 56-year-old patient was diagnosed with stage III colon cancer and began adjuvant FOLFOX chemotherapy through a chest port. At her first treatment, the port was properly accessed, and there was good blood return noted.

In the midst of her first treatment with oxaliplatinum, she got up to go to the restroom. Soon after, she began to complain of pain, but because there had been good blood return, the infusion was continued. As time went on, the pain worsened, and swelling around the port developed, at which time the infusion was stopped. She had an extravasation of the oxaliplatin, with consequent inflammation and chronic pain.

 prior to this case, I did not consider oxaliplatin a potential vesicant (which it is). Furthermore, it was not common practice to recheck for needle placement and good blood return when a patient ambulates during an infusion. It is now clear that such rechecking should be standard. My own practice changed because of this case.

I was asked to look at a similar case, also from a defense viewpoint:

A 58-year-old patient with breast cancer received adjuvant doxorubicin through a peripheral line. Toward the end of the infusion, she complained of pain and it was clear she had extravasation. The infusion was stopped.

Over the next few weeks, her oncologist saw her several times per week, and referred her to the plastic surgery department for debridement. Although she had chronic pain, she recovered fairly well.

 at trial, the jury heard from me that that even with good technique, leakage of doxorubicin can occur and is not negligence per se. The jury was very impressed with the thoughtful follow-up care by the oncologist and rendered a defense verdict. I am sure that had the oncologist not been so attentive and concerned with her patient’s injury, there would have been a different verdict.

Again from a defense viewpoint, I was asked to look at this case:

A 52-year-old patient was treated for breast cancer, with routine follow-up for three years. She came to an office visit complaining of pain near her left scapula. The oncologist reassured her, but said that if the pain persisted he would order a bone scan. She called six weeks later, and told him the pain was worse. A bone scan was performed, revealing bone metastases. Very angry, she sued for the delayed diagnosis of cancer and because she was not getting routine bone scans in the first place.

 people tend to confuse the concept of the benefit of the early diagnosis of cancer with the fact that there is little-to-no benefit to the earlier diagnosis of metastatic cancer. There was direct communication between the defense attorney and the expert for the plaintiff attorney, such that the plaintiff’s expert came to understand the difference between detection of primary and metastatic cancer. Furthermore, he came to understand that there is no standard of care for routine bone scans in this situation. Accordingly, this case eventually was dismissed.

The litigation itself could probably have been avoided by a more careful explanation to the patient, at her initial visit with pain, of the thinking and judgment that it is reasonable not to get an immediate scan with every complaint. As to follow-up issues, in general it is best to fall back on ASCO/National Comprehensive Cancer Care Network guidelines.

From a defense standpoint, I was asked to review this case:

A 78-year-old patient was diagnosed with a T4 transverse colon cancer, which could not be completely resected. After much discussion and multiple consultations, he was treated with radiation and infusional 5-flu-orouracil. He developed severe toxicity, required several surgeries, and eventually died from a series of complications.

Prior to treatment, the patient was carefully informed about possible toxicities. However, his family was not included in these discussions and the suit was brought by his son, who claimed a lack of appropriate informed consent.

: we often have a good relationship with our patients, but this may not extend to the rest of the family. If the patient dies, our best “advocate” is gone and the family, some of whom we may not even know, can form their own opinions about events. In difficult situations it is advisable to include all important family members in therapeutic discussions.

From a defense standpoint, I have seen a number of cases that can only be defined by the fact that, simply, very bad luck occurred:

A 67-year-old woman was being evaluated for thrombocytopenia with a bone marrow aspiration and biopsy. Soon after the procedure, she felt very weak and became hypotensive and syncopal. She was immediately sent to the emergency department, where it was found her hemoglobin was below 7 and that she most likely had a puncture of a pelvic artery with the marrow needle. Despite very aggressive measures, she eventually died from this complication.

: this case went to trial, with a defense verdict. It was such a rare complication of bone marrow biopsy that no expert could state it was due to negligence. Furthermore, the fact that she was attended to quite promptly was very important to the jury. Even with a very surprising, catastrophic event, the important issue for the oncologist was the later care and concern perceived by the patient and family.

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Compared with other specialists, medical oncologists are not often the target of malpractice litigation. Even so, they still get sued.


Protect Yourself From Malpractice Claims

The Community Oncology Alliance (COA) got most of its 2016 Christmas list. CVS Caremark dropped its plan to cut physician-owned dispensaries out of Medicare Part D oral drug distribution, CMS eased off the gas pedal on the Medicare Access and CHIP Reauthorization Act, and the Medicare Part B Drug Payment Model has been discontinued for now. COA’s Capitol Hill agenda in 2017 is to consolidate these gains with some ambitious new initiatives, Ted Okon, executive director of COA, said in a year-end review.

The group hopes to influence Medicare payment so that oncology practices can earn "fair reimbursement" on treatment. Okon said the automatic “sequester” cuts that took a percentage off the top on Medicare drug payments will be a prime target. COA blames the sequester for making it harder for practices to stay independent and in business. COA will also try to spur reform of the 340B Drug Discount Program, which is blamed for disproportionately high drug payments to hospitals, to the disadvantage of independents. “There are significant disparities for what Medicare pays in the hospital setting both for standard services and reimbursement,” Okon said. “We’re going to be calling more attention to that and getting the situation fixed.”

Although the Oncology Care Model has won approval from COA, it needs refinement with respect to physician payment, and this also will be a lobbying focus in 2017, Okon said. In addition, the oncology group is determined to chip away at the power over drug prices and access that is wielded by just a handful of large pharmacy benefit managers, such as CVS Caremark. “What’s come out in some of the [congressional] hearings is that there’s a growing split between the list prices of drugs and what the drugs actually cost. That’s because you have a lot of rebates and discounts in the middle that are widening that split, and I think part of that is happening on the pharmacy benefit manager side,” Okon said.

Reflecting on 2016 and the battles in Washington DC, over cancer care policy, Okon stated that the Center for Medicare & Medicaid Innovation (CMMI), established by the Affordable Care Act as a reform arm of CMS, is now in “jeopardy” particularly because of the failure of the Medicare Part B Drug Payment Model, which originated from CMMI.

He described the payment model as a transparent attempt by the Democratic administration to implement widespread Medicare payment reductions under the guise of an experiment. That much was clear from the scale of the model—all Part B providers would have been part of the model&mdash;and the fact that the physician community was not invited to participate in the planning, Okon said. “The Part B model was air-dropped in with literally no stakeholder input. The administration tried to abuse the powers of CMMI to push through a separate agenda. I think everybody saw through that.”

If US Rep Tom Price, MD, (R, Georgia) gains confirmation as secretary of the Department of Health and Human Services (HHS), this could lead to the possible dismantling of CMMI, as Price was the lead signatory on a September letter to CMS calling for discontinuance of all activities at CMMI. COA has endorsed Price for appointment as HHS secretary. Okon said that Price understands the needs of the medical community and has demonstrated his empathy in many statements and actions as a public official.

Price, a conservative with a stated preference for less government involvement in medicine and insurance policies, has said he favors a rollback on certain Affordable Care Act provisions that guarantee coverage. For these reasons, Price is a controversial pick for secretary of the HHS. “Obviously, we’re very concerned about doing away with the prohibitions on preexisting conditions and annual caps and lifetime caps,” Okon said. “They’re very important in the cancer space.” Still, he said, Price deserves “a chance. He’s been very responsive on issues relating to physicians and patients.”

In December, Jeffrey Vacirca, MD, was elected president of COA. Vacirca is CEO of New York Cancer Specialists in Long Island. He will serve for a one-year term that began on January 1.

The Community Oncology Alliance got most of its 2016 Christmas list. CVS Caremark dropped its plan to cut physician-owned dispensaries out of Medicare Part D oral drug distribution, CMS eased off the gas pedal on the Medicare Access and CHIP Reauthorization Act, and the Medicare Part B Drug Payment Model has been discontinued for now.

COA Takes Aim at PBMs in 2017

Kashyap Patel, MD, saw the first signs that fee-for-service was doomed eight years ago. He was serving on South Carolina’s Medicaid board when he received a report about CMS’s plans to test new payment models.

A few years later, when the first of those pilot programs began to show strong improvement in savings and outcomes, Patel and his partners at Carolina Blood and Cancer Care (CBCC), which has an office in suburban Charlotte and another in rural South Carolina, decided to jump ahead and switch from fee-for-service to one of the new patient-centered care models.

Because they realized that success hinged upon getting payers to change payment protocols, they reached out to their payers before they changed anything and asked what they’d need to do to get compensated for the services they would add and how they could share in the overall cost savings.

The answer they got was that they’d have to make a full commitment to one of the new models. “The payers wanted us to get formal accreditation to demonstrate that we were properly executing one of the new patient-centered models in its entirety. That limited us to some degree, because there are still caps on how many practices can be accredited in the pilot programs of some very interesting models, such as the patient-centered oncology home,” said Patel.

After due diligence, CBCC decided to adopt the Patient-Centered Specialty Practice (PCSP) model from the National Committee for Quality Assurance. The model is designed to reduce waste and improve outcomes through superior coordination of care (

). “We worked very hard for 18 months, and we lost money during that time, but patients and the practice will both end up benefitting from the move,” Patel said (

To begin the transformation to patient-centered care, physicians at CBCC began by asking patients to explain what they knew of their own diagnoses and treatment. The responses were hazy, so the practice experimented with different consultation templates until it cobbled together something that not only made patients more aware, but also enabled them to make better decisions about treatment.

The next step was to guarantee same-day urgent care appointments for patients who called during business hours and next-day appointments for patients who called at night. The practice looked for ways to tweak its scheduling protocol, but the only way to ensure immediate service without canceling less-urgent appointments was to stay open for an hour longer each day and to put staff on call during weekends.

As the practice expanded its ability to see patients quickly, it also began training its nurses to recognize when patients require rapid treatment. Like many other practices that have moved to patient-centered care, CBCC began using telephone triage flowcharts. The charts list every common patient concern and guide nurses through a series of questions that determine the appropriate response.

The combination of telephone triage and immediate appointments is a cornerstone of the patient-centered care model. It is designed to keep patients out of the emergency department (ED), both by preventing health problems from becoming emergencies and by reassuring patients when emergency care is not necessary. Pilot programs to date suggest that these strategies help reduce ED visits by 15% to 50%.

CBCC’s experience also suggests that the change has significantly reduced the tendency of its patients to visit the ED. However, payers have hesitated to share the savings so far, mostly because the practice’s patient volume is low enough that it’s hard to separate the effects of the care model from mere chance.

“We have about 100 patients undergoing chemotherapy at any given time, which is too small a number to demonstrate statistical significance over the time that has passed since we were accredited,” Patel said. “We’re doing a monitoring program through Medicare’s Oncology Care Model (OCM) that should allow us to estimate cost savings accurately by the middle of next year. Even without that, as soon as we got accreditation, our payers recognized a lot of additional codes, and that made this a profitable model for us. Once we share in cost savings, we will be in a very good position.”

In addition, CBCC will be able to secure increased payment for its Medicare patients, who represent more than half of its patient base, once it is certified in the OCM model. Because the requirements for OCM certification are very similar to those for the PCSP certification that it already has, the practice expects that it will take far less time to earn this second accreditation.

Patients who select a practice certified in these models can expect unusually thorough information about their condition and treatment options. At CBCC, this includes information up front about how to gauge the efficacy of treatment and when to consider switching from curative treatment to palliative care.

“Nearly all cancer patients receive some sort of palliative care to reduce the symptoms of disease or treatment, and I think that most practices have increased the emphasis they put on using palliative methods to keep patients comfortable,” said James Welsh, MD, a CBCC partner who is board-certified in both palliative medicine and hospice care. “We’re certainly not unusual, then, in offering palliative care, although my expertise with it may lead us to undertake more palliative care than other places and to talk more to patients about the decisions they may eventually face before treatment starts at all.”

Whereas a significant amount of research suggests that patients with cancer with little hope of surviving more than a few months enjoy better quality of life when they stop curative treatment and move exclusively to palliative care, Welsh and his partners don’t try to push patients down any given path. “There are so many intangible factors at play—religious beliefs, the need for hope, etc&mdash;that a physician cannot tell a patient what the ‘right’ decision is. All you can do is give patients all the information they could possibly want as early as possible and be honest with them about the likely outcomes of various courses of action.”

A patient who comes to CBCC with a late-stage cancer that’s likely to be fatal will not have to wait long for caregivers to discuss issues related to advanced care: writing a living will, assigning a loved one medical and durable power of attorney, getting affairs in order, and considering where to go for hospice care. Having such discussions earlier is actually a part of most patient-centered care models. It is considered to be one component of improved communications, but CBCC officials say they were doing this long before it was incorporated into patient-centered care.

Looking forward, Welsh would like to improve the transition for terminal patients who eventually opt for hospice care. “Hospice eventually becomes the right choice for a significant number of cancer patients, but the current system forces patients who make the transition to stop seeing the oncologists who best understand how to manage their symptoms. Existing Medicare regulations say that hospice patients must receive all their care from the hospice,” Welsh said. “We typically manage to maintain contact with our patients until the end via the telephone or by unreimbursed visits, but those rules are a serious barrier to continuity of care and to quality of care. I think a significant number of patients would benefit by seeking hospice care a bit earlier if they could keep seeing the doctors they had developed relationships with.”

A Preemptive Leap to Patient-Centered Care

Over the past 30 years, I have regularly attended annual meetings of the American Society of Hematology (ASH), where experts from around the globe convene to share the latest advances. In most years, the advances involve only small improvements over standard-of-care. Reliably, some provocative science is presented that points to future trials that might lead to new roads forward in care. Every so often, the science and clinical results coalesce into a palpable wave of improvement and excitement.

Such a revolution may be a long time in the making. During the past two decades, mostly small or only modestly larger groups of people have come together to discuss basic science observations that indicated a possibility that a person afflicted with a hematologic malignancy might have the natural history of their disease positively altered by manipulation of the immune system. The journey started by focusing on using the immune system of a related donor and then unrelated donors to induce remissions. But this was possible only after very toxic therapy was given to prepare the recipient to accept stem cells or bone marrow from another to reduce the tumor burden. Many problems arose as a consequence of the intense preparative therapy and the tendency of the donor cells to reject the new host and attack and kill healthy tissue (graft versus host disease). The expense of this approach ranged from several hundred thousand dollars to, at times, over $1 million. Surprisingly, the cost was readily accepted by commercial and governmental payers because it offered the only opportunity to cure an otherwise fatal disease, as imperfect as the approach was.

2016 brought a game changer. After decades of discovery and trial-and-error, along came a new approach that targeted the cause of tumor escape from immune surveillance. Despite being rejected by early critics, clinical trial results presented at the 2016 ASH meeting showed unequivocally that this new approach of applied immunology can change the natural history of an otherwise fatal disease. Remarkably, no toxic induction therapy is required for the new approach to work and there is no need for a foreign immune system. By taking the brakes off the T cells of patients suffering with cancer, their own immune systems become capable of recognizing and killing the cancer cells, resulting in long-term responses and potential cures.

2016 ASH turned the page on applied immunology, moving us from the classic paradigm of allogeneic transplant to a new era of therapy that has the same intent but is much less toxic and potentially less expensive. Only time will tell how widely applicable the new approach will be.

Over the past 30 years, I have regularly attended annual meetings of the American Society of Hematology, where experts from around the globe convene to share the latest advances.


T Cells Move Into the Fast Lane

The inevitable has happened: a computer is now sitting side-by-side with tumor boards around the globe, rendering second opinions on treatment calls. This computer is none other than an o spring of Watson, the machine that did so well at “Jeopardy” in 2011 and took first prize of $1 million. Watson for Oncology (WFO) is the name of the new iteration from IBM. It achieved 90% concordance with tumor boards at the Manipal Comprehensive Cancer Center in Bengaluru, India, according to results presented at the 2016 San Antonio Breast Cancer Symposium.

But not to worry, says SP Somashekhar, MBBS, the lead author of the study: WFO will never replace human oncologists, as it can only generalize based on best-available evidence. Nevertheless, WFO is already viewed by many as an important safeguard against bias and human error, and it’s finding its way into not just rural clinics abroad, where top-level training is unavailable, but into modern facilities, too, where oncologists appreciate being able to cross-check their conclusions. Our story on WFO is on page 34.

In the United States, Memorial Sloan Kettering Cancer Center (MSKCC), the group that helped to program WFO, intends to use the system in a newly announced collaborative venture with Hackensack Meridian Health, a project that will give both institutions greater dominance in precision medicine in New Jersey.

The Meridian Health-MSKCC partnership announced in December follows the April announcement by MD Anderson and Summit Medical Group to bring advanced cancer services to New Jersey and signals the ever-growing consolidation in the cancer market. “Scale,” a Meridian Health doctor said, is key to precision medicine. It also may be key to economic survival.

Our January cover story on consolidation puts the spotlight on the Florida market, where more oncology centers have closed, merged, or been acquired in recent years than anywhere else in the country. Florida is also home to the largest independent oncology network—Florida Cancer Specialists & Research Institute, which has more than 200 physicians and is not limiting its expansion to the Sunshine State. The group has announced plans to create a company called the American Oncology Network, which would consolidate independents in other states. Be sure to read our story this month on the consolidation wave.

The year 2016 saw much effort among oncologists caused by reform efforts by CMS. Practices did a great deal of internal stretching to prepare for new measures of care that CMS will use to determine positive and negative payment incentives. Last year there was a late reprieve for practices in the form of a decision by CVS Caremark not to reduce the availability of Medicare Part D oncolytics to practice dispensaries. In addition, the Medicare Part B Drug Payment Model ground to a halt for lack of political support. There was much rejoicing in the oncology community. Some viewed the payment model as a backdoor attempt to reduce drug costs by taking more away from oncology practices.

Does this mean independents can sit on their laurels after a year of intense lobbying? No, says the Community Oncology Alliance. There’s more Capitol Hill territory to be covered in 2017. Read about these issues in our year-in-review story on page 10 and our Capitol Beat story on page 28.

And be sure to read our other fine coverage this month in 

Watson for Oncology is the name of the new iteration from IBM. It achieved 90% concordance with tumor boards at the Manipal Comprehensive Cancer Center in Bengaluru, India, according to results presented at the 2016 San Antonio Breast Cancer Symposium.

Paging Dr. Watson....

For independent oncology practices, 2016 was a year of struggle— struggle to achieve new levels of reporting to CMS, and struggle to improve interaction with patients and coordination of care. It was also a year in which a slate of new acronyms and abbreviations from CMS became household words in oncology centers across the country, as the value transition took a stronger hold.

In 2016, storm clouds appeared on the horizon in the form of a Medicare Part B payment experiment from CMS intended to broadly reconfigure the average-sales-price-plus-6% formula for drug payment and thereby discourage volume billing for oncology services.

Also, the past year saw a major pharmacy benefit manager launch an abortive attempt to exclude many in-house dispensaries from issuing Medicare Part D oral oncolytic drugs, a move that caused great consternation among oncology practices. At the same time, CMS decided to take a go-slow approach to implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), which significantly eased the pressure on physicians worried about the new performance measurements and payment incentives.

Those were some of the biggest headlines on the oncology business scene over the past year, and independents were highly active on the legislative scene as they sought to interpret these complex new reforms, ward off the payment experiment, and prevent CVS Caremark from going forward with its plan to isolate in-house pharmacies from Medicare Part D drug dispensing.

But a lot more was happening besides. The year 2016 saw Vice President Joseph Biden announce the start of the Cancer Moonshot, a highly ambitious effort to double the pace of cancer discovery based on the promise of precision medicine. Many physicians wondered about the trickle-down effect of this initiative and whether their cancer research programs would see any of the financial stimulus. The year 2016 also saw the much-vaunted 21st Century Cures Act become a reality, following overwhelming votes for approval in Congress and endorsement from the White House.

21st Century Cures promises to light up the medical scene like a $6.3 billion booster rocket, giving a 10-year lift to multiple initiatives that include precision medicine advancement, the Moonshot, curing Alzheimer’s, battling prescription opioid abuse, and brain research. Yet it also represents a test of nerves for those who worry that this legislation—while shaking loose some of the fetters on the pharmaceutical industry&mdash;may weaken the regulatory strength of the FDA by depriving it of data that some consider vital for the type of independent analysis the federal agency needs for drug approval determinations.

The past year has also seen multiple refinements and enhancements in the new slate of value tools promoted by such groups as ASCO and the National Comprehensive Cancer Network (NCCN), tools that promise to enable physicians and patients to discuss the economics of care and not just treatment. Even as these methodologies emerged, by the end of 2016 it was clear that yet another leap forward in the economic discussion is needed, one that encompasses the realities of immuno-oncology drugs. These drugs have the potential to work far more efficiently than cytotoxics, but they also cost far more. These dynamics prompted a group of oncologists and other industry representatives to hold a summit on the issue at the Society for Immunotherapy of Cancer (SITC) annual meeting in November.

“We need to develop a dialogue with other parties that are actively engaged in developing value platforms, engage a medical economist with expertise in value development, and consider whether further research or collaboration is the right next step,” said a co-organizer of the SITC event, Howard Kaufman, MD, FACS, chief surgical officer and associate director for clinical science, Rutgers Cancer Institute.

2016 was also a year in which the trend of mergers and closings among independent oncology centers saw little, if any, abatement. The Community Oncology Alliance (COA) came out with its biennial assessment of practice health and reported that since 2014, roughly 73 practices have merged with or been acquired by a hospital and 67 practices have closed their doors. The trend lines in this regard for the large part continue the upward trajectory they have maintained since COA began this set of statistics in 2008. Other information from the COA presses in 2016 included the observation that whereas 90% of commercially insured chemotherapy infusion was done in physician offices in 2004, hospital outpatient centers had captured 60% of the total by 2014.

The past year came with an advisory to oncologist practices that they need to be vigilant about who has access to their electronic health record systems. This point was underscored by 21st Century Oncology’s announcement that it was working with federal authorities to investigate a hacking incident in which 2.2 million patient records were compromised. It wasn’t long afterward that the Central Ohio Urology Group of 20-some locations learned that it, too, had been hacked—purportedly by a group of Ukrainian extremists. The hackers took a wide breadth of information, including patient addresses, treatment records, and payment information.

Like many things that happened in 2016, the hacking attacks signaled changing conditions that practitioners need to address in their planning more than ever before. Medical information is worth a lot on the black market because a thief knows it cannot be changed overnight the way you can cancel a credit card account. “As cyber-attacks on healthcare entities continue, the industry must constantly evaluate their cyber protection effectiveness in the face of evolving technologies,” said Ann Patterson, senior vice president of the Medical Identity Fraud Alliance. “At the same time, there is a great need to train the enterprise in all areas of PHI [protected health information] data loss in order to reduce the incidence of identity fraud. The many paths to fraud require an equal number of protections to be put in place to block those paths.” Over 65% of healthcare-related cyber-attacks in 2016 stemmed from unauthorized access to data, improper disposal of information, loss, and theft, she said. “These threats indicate we must continue to educate our workforce on PHI protection in order to reduce data loss through acts such as lost or stolen laptops and devices.”

Although the year in reflection was overshadowed by a variety of challenges, there were a few bright spots for independent oncology practices, particularly in the sense of anticipated difficulties that dematerialized before the arrival of the new year. For example, CVS Caremark backed away from plans to discontinue Part D payments to physician-run dispensaries by the start of 2017. The PBM, which owns 10,000 pharmacies and contended that CMS policy actually excludes dispensaries, dropped the policy change after taking broadsides from the oncology community and being accused of exploiting its Part D sponsor role for private gain. Whereas the company contended that CMS policy does not require inclusion of dispensaries, observers speculated that there weren’t that many physician dispensaries around when CMS crafted its policy on Part D inclusion, meaning that they were simply overlooked.

In another welcome turnaround, there was a seemingly fatal setback for CMS’s Part B “experiment” to change the Medicare payment formula for drugs, which was bitterly fought by the oncology community and other physician groups. The surprising Republican victory in the 2016 presidential election combined with the Republican majorities in the House and Senate left scant belief that Democratic support for the Part B payment revision would prevail. The hematological community contended CMS’s proposed drug payment changes would severely affect their profit margins. CMS had other ambitious payment initiatives in store as part of the Part B experiment. For example, it wanted to take a page out of the European drug book and introduce drug price referencing in the United States, which would involve paying for drugs according to their class, not according to what their manufacturer is asking for them.

Yet another twist on the regulatory front involved the decision by CMS to slacken the reform pace at which physicians must move from fee-for-service toward value-based doctoring. This came in response to a massive protest from the physician community, which contended the changes embodied by MACRA were too fast and too onerous. CMS responded by making 2017 a transition year, with an à-la-carte series of steps toward full involvement in physician reporting, outcome measurement, and incentive payments. Physicians now can jump in wherever they feel comfortable, and CMS announced that robust support would be extended to smaller and rural practices that are expected to be most challenged by MACRA. That said, oncology community experts promptly advised their constituents to move as deeply into reform as possible in 2017, on the theory that it isn’t going to go away and that practices will have to be successful with the program in order to qualify for the financial incentives CMS has made available.

For independent oncology practices, 2016 was a year of struggle&mdash;struggle to achieve new levels of reporting to CMS, and struggle to improve interaction with patients and coordination of care.

For Independent Oncology Practices, Storm Clouds Came and Went in 2016

Florida is a leader in the consolidation trend, topping the nation in the number of practices that have closed, merged, or been acquired in recent years, according to the Community Oncology Alliance (COA). Most practices have affiliated with hospitals or joined large groups like Florida Cancer Specialists & Research Institute, one of the nation's biggest physician-owned oncology networks.

Florida has changed so dramatically in part because it has a large population of older residents on Medicare, making providers particularly sensitive to CMS policy changes that reduce revenues, increase compliance costs, and increase consolidation pressures. After California it has the most cancer patients. In addition, seniors there are generally fitter and better able to tolerate treatment than in other places, further expanding the number of patients, said Alan Marks, MD, past president of the Florida Society of Clinical Oncology.

“Our seniors are healthier than the same age-group population in, say, New York,” Marks said. “We don’t think anything of taking an 85-year-old and giving them chemotherapy here in Florida, because chronologically they’re 85, but they’re out there playing golf and tennis and swimming, and physiologically they’re in their 60s.”

Yet many of the same pressures that eliminated small practices in much of Florida are present everywhere, such as high drug costs, declining reimbursements, more complex payment models, and younger physicians’ preference for employment rather than entrepreneurship. Large groups and networks are growing in Colorado, New Jersey, New York, Tennessee, and Texas. Oncologists continue to sell their practices to hospitals, and leading cancer centers are spreading their brands through joint ventures.

At the same time, variations in state laws and local markets result in diverse types of consolidation. In areas where size does not confer a significant advantage, small providers may remain independent for some time. While oncologists in some states are following Florida’s lead, in others they are taking a different path.

“At present, we are not seeing the same scale of consolidation elsewhere as we are seeing in Florida,” said Constantine Mantz, MD, chief medical officer at 21st Century Oncology, which has 144 centers in 17 states. However, “large oncology practices and networks will continue to grow throughout the country as physicians seek alignments with larger entities to better meet their operational needs.”Small practices are disappearing nationally due largely to hospital acquisitions. In the Sunshine State, however, a leading player is Florida Cancer Specialists & Research Institute, a physician-owned mega-group that has grown over three decades to 206 physicians and 100 offices. Florida Cancer Specialists & Research Institute practices are concentrated on the West Coast and in Central Florida around Orlando, with one in the Panhandle and none in Jacksonville or Miami.

21st Century Oncology, also based in Florida, has about 100 oncologists around the state, the majority of them radiation oncologists. US Oncology’s numbers have fallen over the years as some practices have ended their affiliations with the company, but it still has 26 oncologists along with other specialists. Other than Florida Cancer Specialists & Research Institute, the biggest independent practice group is Integrated Community Oncology (ICON) in Jacksonville, also known as Cancer Specialists of North Florida, with 31 oncologists at nine locations.

Jacksonville is one market that illustrates the competitiveness and volatility of oncology in Florida. Marks’ former practice, for example, was sold to Baptist Health System in 1992; bought back its independence in 2003; and became part of 21st Century in 2008, in order to satisfy payer requirements for access to radiation therapies. Last year, 21st Century’s Jacksonville group merged with the University of Florida Health (UF Health).

Baptist Health, meanwhile, wanted to rebuild its oncology program after losing Marks’ group, so it became a member of the MD Anderson network and opened a cancer center. The Mayo Clinic, which has had a presence in Jacksonville since 1986, acquired and then sold a local hospital, and created a cancer center complex. ICON was formed by physicians who left US Oncology about 15 years ago in response to changes in the company’s revenue-sharing system. The city of 870,000 residents now has four major oncology providers and no small groups, Marks said.

“Jacksonville is probably one of the most competitive oncology markets there is,” said Marks, who retired in 2014.

Other Florida cities have seen similar consolidation. Ocala’s two main independents agreed to mergers, one with Florida Cancer Specialists and the other with a hospital, Marks said. In Daytona, two hospitals dominate the market. The University of Miami looms large over its region, but Baptist Health absorbed a large former US Oncology group there, partnered with Memorial Sloan Kettering (MSK), and is building the Miami Cancer Institute. Florida’s sole NCI-designated comprehensive center, Moffitt Cancer Center, dominates Tampa, and Florida Cancer Specialists & Research Institute also has three locations there.

Small practices haven’t completely disappeared. Marks said a few serve Miami’s immigrant community, or remote areas far from cities, and he knows of older oncologists who maintain unprofitable solo offices as a sort of hobby. Florida Cancer Specialist CEO Brad Prechtl said pockets of practices with 1 to 5 physicians remain.

“Some practices, given their dynamic and their market—if they’re the only medical oncologist in that market&mdash;it might be easier for them to survive than when there’s competition,” he said. “Those practices are typically stagnant, and seeing declining reimbursement and increasing costs and decreasing physician compensation.”

“They seem to be reaching out to us recently,” Prechtl added. “The majority of independent practices out there in the state of Florida are assessing whether or not they can continue to survive, and more of them are considering some sort of affiliation.”

Prechtl said Florida Cancer Specialists continues to grow and is also creating a new organization, American Oncology Network, to replicate Florida Cancer Specialists & Research Institute's structure in other states. He said physicians outside of Florida have for several years been asking Florida Cancer Specialists & Research Institute to expand to their areas.

ICON CEO Bob Phelan, whose practice has 31 oncologists, said groups need to be that size or larger to thrive in the current cost and regulatory environment. Those that survive stand to benefit if CMS someday reforms the 340B drug discount program, which makes cancer treatment lucrative for hospitals despite their overall higher costs, he said.

“Eventually the government will realize we’re the cheaper providers, and they’ll stop the hospital incentives,” Phelan said. “Once the hospitals see their drug spend creep up, the independent guys will be in the driver’s seat and practices like mine will be successful. We’ll get even more guys wanting to join us.”

Another highly consolidated state is Texas. Texas Oncology, a US Oncology affiliate, has at least 420 oncologists, more than a third of those in the state. After Florida, Texas has reported the most mergers and acquisitions in the last eight years, though relatively few of them have been acquisitions by hospitals, according to COA’s 2016 practice impact report.

Large practice groups have also formed in a number of other states. Rocky Mountain Cancer Centers in Colorado, also a US Oncology affiliate, has 53 physicians at more than 20 sites. Tennessee Oncology has 80 doctors at more than 30 locations. In New Jersey, Regional Cancer Care Associates (RCCA) has recently grown into a mega-group of 100 oncologists and expanded into Maryland and Washington DC, with further growth in those areas and into Connecticut being planned.

Much like Florida Cancer Specialists, RCCA works to preserve community oncology by giving practices a way to become more cost-efficient and withstand pressures to join hospitals. CEO Terrill Jordan said those pressures vary around New Jersey, with some private practices likely to remain autonomous and others being pushed hard to sell out.

“There’s one hospital system in particular that’s very aggressive, I would say to the point of being predatory in terms of independent practices, and ultimately seeks to run all the physicians into the hospital employment model,” he said. “There are others that are more open and collaborative with the practices and don’t necessarily seek to advance that model.”

Jordan also noted the growing presence of name-brand national cancer centers that are partnering with New Jersey providers and spending heavily to advertise their programs. Last month MSK signed a 10-year agreement with Hackensack Meridian Health and earlier last year MD Anderson inked a partnership with Summit Medical Group.

In New Jersey, Florida, and other areas where practice networks are growing, the consolidation trend is driven by competition for profit and enabled by relatively friendly regulatory environments. In places lacking those elements, the Florida model is unlikely to be emulated.

California has a huge patient pool, for example, but state law prohibits non-physician ownership of practices, leading to complicated workarounds and limited network formation. In much of the country, meanwhile, sparse populations, poverty, and the concentration of specialty care in medical centers means there are few independent providers left to consolidate and no profit motive to do so.

Sanford Health, in the Dakotas, has energetically built up its cancer services over the last few years. But despite covering 250,000 square miles, the nonprofit health system as a whole has 23 medical oncologists, nine radiation oncologists, 10 breast radiation physicians, and one gynecologic oncologist, according to its website. COA says North and South Dakota together have just seven community oncology practices.

Sanford is one of the nation’s largest health systems, and it’s expanding: it recently opened a breast health center and is building a hospital and a genomics lab. But Sharon Hunt, Sanford’s executive director of cancer, doesn’t focus much on competition and profit; her priorities are increasing access to clinical trials, integrating and managing new, complex treatments, addressing psychosocial and survivorship needs, and meeting growing demand from a far-flung, aging population while under financial constraints.

"Our region is mostly integrated health systems. It’s difficult in the Midwest to be a standalone practice anymore,” she said. “Our patients are so spread out that for us to provide oncology services, you have to either have a vibrant outreach program, so I can go to those small towns where those patients are, or I have to have good videoconferencing, and all of that comes at a price. It really takes a large infrastructure to be able to serve that.”

Florida is a leader in the consolidation trend, topping the nation in the number of practices that have closed, merged, or been acquired in recent years.

Consolidation Ripples Out From Florida

Boston-based Berg Health is attempting to do away with a traditional form of scientific inquiry in an attempt to find better answers. “We don’t believe in hypotheses,” says Ranga Sarangarajan, PhD, chief scientific officer for the 8-year-old startup, which is looking for new oncology drug opportunities by distilling data from biological samples and patient health records. “It’s a more efficient process, but it also takes away our biases of what we think about a drug target, its role in influencing pathways that contribute to disease, and the potential for development of treatment,” Sarangarajan said.

Berg Health is among an outpouring of big data startups that have attracted venture capital funding on faith that super-fast computers directed by powerful algorithms can lead to health solutions and business success (

). Many believe that data for these initiatives are already available, buried in databases of patient information. In fact, Berg Health was co-founded by Silicon Valley, California, real estate tycoon Carl Berg partly on the principle that exploiting those repositories could significantly reduce the cost and time needed for drug discovery. Besides in Silicon Valley, pockets of digital health entrepreneurship are developing across the country (

Other prominent digital health startups are crunching health data in different ways. One of them is Flatiron Health, a four-year-old New York City company that in addition to selling electronic health record (EHR) software is plumbing real-world patient data to help physicians and researchers better understand how patients will respond to certain drugs. Company Chief Medical Officer Amy Abernethy, MD, PhD, explained that drug approvals often are built on clinical trial patient cohorts that differ from the groups of typical patients in the real world.

Companies mining the promise of big data also include Benefits Science Technologies and Ayasdi. Benefits Science Technologies, of Massachusetts, is capitalizing on employers’ desire to know more about the health of their employee populations and why their health plan costs are changing. The company aggregates patient data as it becomes available and funnels that through dashboard-style monitoring systems that explain the ow of healthcare dollars.

Palo Alto-based Ayasdi enables physicians to find optimal care pathways using analyses of health data from patient populations that are local to the clinics that subscribe to the service. One of Ayasdi’s largest contracts is with the Mercy hospital network—a Midwestern group that serves millions of patients. The company claims its system delivers better outcomes and lower costs.

Investor money is pouring into this market. In 2015, digital health venture capital funding reached $4.5 billion, up from slightly over $1 billion in 2011, according to Rock Health. The single largest venture capital deal of 2015 measured $200 million and went to NantHealth, developer of the GPS Cancer test, which the company says goes far beyond biomarker assays and actually predicts drug efficacy per patient by looking deeply into cell biology and RNA. By the end of 2015, the company had raised a total of $680 million. In June of 2016, NantHealth launched an initial public offering.

Many of these companies fall into the category of “garage biotechs.” They are often seeded with money from venture capitalists. These companies may end up being sold or become established as independents. What they have in common is super-fast processing and an idea for how to capitalize on big data.

Berg Health has succeeded with this approach in the development of BPM 31510, a drug that capitalizes on a tumor cell’s heavy dependence on glucose for the energy needed to grow and divide. The company developed BPM 31510 based on what it knew about cell biology and by sorting through clinical trial patient data. BPM 31510 exploits the Warburg effect: when the cell is unable to obtain the glucose-based sustenance it needs from the mitochondria, it resorts to making energy from the glucose in the cell cytoplasm. By doing this, the cell sidesteps pathways that regulate cell life and death. BPM 3150 mediates an increase in mitochondrial activity, and the resulting stress activates cell-death pathways in cancer cells. “This drug reengages the ability of the cell to become controlled by the mitrochondria to rebalance the life/death equilibrium,” Sarangarajan said.

The more aggressive the tumor cell, the better BPM 31510 works, he said. In early trials, the company has tested the drug on pancreatic and brain cancers, as these cancers are metabolically more active. Sarangarajan said Berg is hopeful that, for the same reason, BPM 31510 will be successful in triple-negative and other forms of (eg, HER2-positive) breast cancer.

BPM 31510 may take a couple more years to get to market, Sarangarajan said, adding, “I can tell you this: based on the speed of development from our startup, to the discovery, to our phase I/phase II, it is going to be significantly less than the traditional 13 years to 15 years that it takes to get a new drug to the marketplace. Even if we reduce time to market by one-third to one-half, we would have achieved a significant milestone in the timelines for development. Ten to 15 years ago this would not have been possible. We are reaping the benefits of the significant advances that have taken place in all supporting technologies.” In addition, the cost of developing the drug will be well under the current average of $2.1 billion over 16 years, Sarangarajan said. “It definitely is not going to be that much.”

Flatiron works with electronic health records from multiple institutions to formulate its real-world guidance for physicians. This year, in a project to examine use of checkpoint inhibitors nivolumab (Opdivo) and pembrolizumab (Keytruda) in patients with non—small cell lung cancer (NSCLC), Flatiron demonstrated that clinical data used for drug approval decisions was not a perfect match for real-world patient populations. The company looked at a cohort of 1578 patients, far more than the FDA had seen from NSCLC clinical trial results. “In the trials, the median age was 61 and 64, [respectively] whereas in the real world the median age is 69, and we’ve got over a third of patients over the age of 75—which is very different than the clinical trials population,” Abernethy said.

Inter-institutional relationships, such as Flatiron has formed, are key to accessing large pools of data and achieving advances in data mining, Sarangarajan said. “You might already have the information you need, but it hasn’t been thoroughly parsed, and I think people are understanding that working together is critical to get to solutions to some of the hurdles. I think that as we move forward, more and more of these consortiums are going to be formed.”

But getting at the needle of value in the data haystack is going to take informed analysis—and time, he said. “It is going to take time for people to figure out which data are truly relevant, and then to put these pieces together and run the analysis to actually effectuate an outcome. I’m not only talking about retrospective data, but about all the data that are being generated, such as from wearable technology. There seems to be value, but the realizations of that value are still quite far away.”

Boston-based Berg Health is attempting to do away with a traditional form of scientific inquiry in an attempt to find better answers.

January 2017 | Oncology Business News®