Plan nixes markup on cancer drugs

April 1, 2014

Payment changes will save an estimated $200 million annually.

 

Highmark is revising its reimbursement strategy to achieve what it calls “more rational pricing” for infusion chemotherapy.

“Health systems and large hospitals purchase physician oncology practices, then bill for infusion chemotherapy services as a higher-cost hospital outpatient service-even though the treatment continues to be provided in a physician office,” says Highmark spokesman Aaron Billger. “Many cancer patients in western Pennsylvania are paying much more for their infusion chemotherapy treatments than they should be-without any significant advances in outcomes. Highmark is restoring more rational payments by revising the protocols to pay for certain oncology-related services, including the administration of infusion chemotherapy drugs.”

The rising price of these cancer treatments-without benefit to patient outcomes-can cause patients to put off needed treatment and drive up  costs overall, according to Billger. 

“Highmark is taking steps to end the anti-consumer, distorted billing practices by several western Pennsylvania health systems that have inflated the cost of infusion chemotherapy services by hundreds of millions of dollars,” he says. “Because of these practices, many cancer patients in our region are paying much more for their infusion chemotherapy treatments than they should be.”

Highmark’s action is not intended as a cost-cutting or value-related measure, and is not punitive toward physicians. Rather, the plan made the change on behalf of its members. The payment changes will save an estimated $200 million annually, Billger says. For example, a Highmark member being treated for lung cancer could save $1,000 to $3,500 or more in out-of-pocket costs per single treatment, depending on the drugs being used. 

“Independent physicians are already providing these services of care at a lower rate, and we know physicians currently charging higher rates can, too,” he says.  

Impact far-reaching

The billing practices for cancer care do not impact other areas of Pennsylvania, because the company has already addressed the issue through hospital contract negotiations that changed the payment methodology. The impact of cancer costs, however, is a national issue. 

The Wall Street Journal reported that 19% of cancer patients are delaying treatment because of cost, and another 23% have lost their homes due to treatment costs. A Kaiser Family Foundation survey showed that 25% of those with a family member with cancer used all or most of their savings for treatment. 

The Medicare Payment Advisory Commission (MedPAC) recently agreed that reimbursement for certain healthcare services should be consistent regardless of the setting treatments occur. MEDPAC was expected to make a formal recommendation to congress in its March report. 

“Hospitals charge more overhead for services-even outpatient. So if they buy the oncology practice they add new overhead. It seems [Highmark is] reversing that,” says Andrew Schorr, a two-time cancer survivor and patient-advocate, who is the founder of patientpower.info, a patient-facing website. “A cancer diagnosis is devastating enough without the added trauma of a blow to your family’s finances. By making an effort to keep cancer therapy costs down more patients will be able to follow their treatment plan as prescribed and with less anxiety about how to afford it. Hospitals are smart to lower these charges as they are otherwise forcing patients to seek care elsewhere at stand alone community oncology practices with independent ownership.”

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Read a blog from The Hill on equalizing payments for cancer care here.