Reimbursement: The Good, The Bad, and The Ugly

Patrick W. Cobb, MD

With squeezing reimbursements and rising drug costs, it is imperative that practices today make sure they are reimbursed for the therapies physicians prescribe. Although it is no guarantee that they will be paid, many practices obtain prior approval from insurance companies before starting treatment—but even that now-common process is not without its problems, according to Patrick W. Cobb, MD, a partner in Frontier Cancer Centers and Blood Institute in Billings, Montana, and immediate past president and board member of the Community Oncology Alliance, a nonprofit organization that advocates for patients and providers in the community oncology setting.

This step increases the practice’s operating costs and often delays treatment for patients, but with some treatment regimens costing more than $100,000, practices cannot afford to practice “on faith” that claims will be paid.

“If you are in private practice, and you don’t get reimbursed for the drugs that you buy, you can go out of business very quickly,” Cobb said. “We do it for every patient to improve the chances that we will actually be paid. The margin for what we get paid for the drugs and what we pay for them is so tight that we cannot afford to miss any payments.”

The extra step in the billing process meant that Frontier, a small community practice, had to hire a full-time person to obtain prior approval for their patients, which added to their practice expenses.

“We have one employee dedicated to making sure that patients get assistance, and we get prior approval,” Cobb said. “Any time we start a regimen or change a regimen, we get prior approval.

“There is no reimbursement for her position; it is just a cost we have to bear,” he said. Shrinking reimbursements make it hard to justify the salary and benefits expenditure, but without an insurance advocate fighting for the practice and patient, it’s more likely that insurance companies will deny claims for expensive drugs.

Once a Frontier physician makes the diagnosis and develops a treatment plan, the insurance navigator goes through the electronic medical record and starts seeking approval. After the insurance company agrees to reimburse the regimen, the patient begins treatment.

The patient is the real loser, because having to seek prior approval delays treatment regimens in a disease where earlier treatment is better.

“Let’s say a patient has metastatic lung cancer and I’ve given him two cycles of chemotherapy. I do a CT scan, and the disease has progressed. I would want to change the therapy regimen. I would like to get started right away, but I cannot because the insurance company has not approved the new regimen,” Cobb said. “So, the patient has to come back a few days later to start the new drug after it’s approved.”

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The margin for what we get paid for the drugs and what we pay for them is so tight that we cannot afford to miss any payments.”

—Patrick W. Cobb, MD

The best way to make sure a treatment regimen is reimbursed is to practice evidence-based medicine, he said. “If you have a regimen that is recommended in NCCN [National Comprehensive Cancer Network] guidelines, that definitely helps, but still does not ensure payment.

“If a physician wants to use a drug for which there is not a whole lot of data, then that is a problem. If you can’t support its use in that indication, it probably won’t get used,” he says.

Drug shortages have complicated both treatment and payment. If the practice gets prior approval for a regimen and then cannot obtain the drug, the process has to begin all over again, which delays treatment yet again.

“This is not good medicine, and it doesn’t help our patients,” Cobb said, but it’s the only way to remain financially viable without bankrupting the patient.

Another complication is clinical trials. Although there is a real push to get people into clinical trials, not every insurance company supports them.

“Some insurance companies realize the value of clinical trials, not only because it improves the general knowledge about treating cancer patients, but it saves them money because the drugs are provided by the pharmaceutical company,” he said.

“Other insurance companies refuse to pay for any medical expenses if a patient is enrolled in a clinical trial. They don’t pay for doctor visits, routine labs, or any tests. A patient who is insured by one of those companies cannot be enrolled in a clinical trial,” Cobb said.

This issue depends on the state in which the physician practices: Some states require health insurance companies to pay for the routine patient care. In addition, provisions in the Patient Protection and Affordable Care Act also address this shortcoming. Beginning January 1, 2014, companies will have to cover costs for patients with a serious or life-threatening condition who choose to participate in a clinical trial.

One area that is currently giving Cobb’s practice trouble is the use of drugs to prevent skeletal-related events in patients with bone metastases. Three products are FDA-approved for this indication: zoledronic acid (Zometa, Novartis Oncology), denosumab (Xgeva, Amgen), and pamidronate disodium (Aredia, Novartis Oncology). Each has advantages over the other for certain patients, but their costs vary.

“We’ve had a lot of trouble with one of our insurers. So, even with medications that are absolutely indicated for use, we still get prior approval because different insurance companies have different payment policies.”

Practices do not have much recourse if they are turned down. A practice can appeal the decision, but it will have to make sure to back up the appeal with data to justify the claim. Sometimes, an independent review panel will find in favor of the practice, Cobb said.

“Part of the problem is that oncology progress is going along at a fairly rapid clip, and insurance companies have to put in policies and procedures, and they don’t always have the most up-to-date data. Now, once we give them data, some will generally go along with it, but appeals delay treatment.”

Even with prior approval, there is no guarantee that the practice will be reimbursed, Cobb said. Insurers can still review the claim and refuse payment, he said, but prior approval increases the chances that claims will be paid.