April 2019 Edition Vol.11, Issue 4

Denial Rates and Days to Pay for Cancer Drugs: Commercial Health Plan Report Card

By Tracy Lewis and Bobbi Buell, onPoint Oncology

Office-administered oncology drugs given in the community setting face stiff reimbursement challenges when billing commercial plans; while Medicare has emerged as the gold standard for both predictable payment and timeliness. Claims data compiled from community oncology practices across the country who participate in the “buy and bill” process (practices who purchase a drug, administer it to the patient, and then bill the insurer and hope payment arrives in a timely manner) indicates commercial/private plans have the widest variances in denial/rejection rates and days to pay.

Moreover, with the presence of the Affordable Care Act exchange plans and Medicare Advantage plans, commercial payers are emerging as a larger factor in the payment environment.

At onPoint Oncology, we analyzed commercial payers in terms of denial rates (Tables 1 and 2) and in days to pay (Tables 3 and 4), but this analysis does not contain Medicare, Medicare Advantage, or Medicaid claims.

For the Calendar Year (CY) 2018, our database shows that Medicare Fee for Service evidenced a 4.83% denial/rejection rate and 26 days to pay (DTP) on average.1 The data are not limited to any number of plans and/or providers, and includes CY 2018 claims adjudicated by 439 commercial plans for 735 sites of service billing Part B.

We used a filter of 1000 denials minimum and 1000 claims minimum so we could report on more commonly-billed plans. Again, reports represent claims adjudicated in CY 2018.

Denial rates are calculated by dividing the number of denied line items for drugs by the number of drug transactions for a specific plan or payer or payer type (Medicare, Commercial, etc).

We found that denials are mostly rejections for administrative reasons (e.g., missing medical record, wrong NDC code, etc).  Also included are medical necessity denials which may require an appeal. We report denial reason codes and their associated remark codes. These help the onPoint data team advise clients to either focus on the practice or the payer, whichever may require more education or intervention.

The following tables reveal the worst and the best, according to our data, for drug denials and days to pay among commercial payers.

 

Days to Pay2

For days to pay we factored in three dates:

  1. Date of service – date that patient was actually given the drug
  2. Date of filing – date that the patient’s insurance carrier had a claim filed
  3. Date of payment – date that insurance payment was received for services and drug

Days to Pay is the number of days from date of service to date of positive insurance payment. Unlike the pharmacy benefit where there can be instant adjudication, community physicians must purchase the expensive chemotherapy drug first, store and manage it, administer it, bill the insurer, and then hope the insurance payment comes before they themselves must pay for the drug. Therefore, Days to Pay is an important metric for community oncologists.

Summary

As evidenced, the Blue Cross/Blue Shield plans are some of the best private plans in the nation in both denial rates and days to pay. The Blues overall look very good in terms of claim velocity with no major fluctuations other than the Delaware Blue outlier.

On the other hand, commercial health insurance plans seem quite the opposite. Denial rates for significant commercial plans ranged from 65% to 4% and Days to Pay span from 53 to less than 30. This broader range of results for commercial plans makes sense as they each act independently of each while Blue plans tend to function in a more cohesive unit.

Congratulations to the best commercial plans billed by community oncology in terms of good denial rates and Days to Pay (Graded A+ for appearing at the top on both lists):

  • Alabama Blue Cross
  • New York Blue Shield Central Region

Raspberries to the worst commercial plans billed by community oncology in terms of denial rates and Days to Pay (Graded F for appearing at the bottom of both lists or having a totally unmanageable denial rate.

  • Horizon NJ Health
  • Caterpillar Inc.
  • First Choice
  • Veterans Administration Fee Basis Programs

About onPoint 

onPoint’s proprietary product, focalPoint®, is the only real time payer surveillance product for physician-administered therapies. We focus on the payment integrity and speed in office-administered drugs by bringing targeted claims information to both practices and pharmaceutical reimbursement teams. The common goal of both segments is to improve manufacturer reimbursement programs and enhance patient access to cancer drugs. Customers are able to take immediate action to optimize denial/rejection rates, days to pay, days to file, and claims re-submissions. This report focuses on just two key metrics of those described above.

Caveats:

  • Reports are run with ALL office-administered oncology drugs aggregated within focalPoint – there are major fluctuations within individual drugs due to many external factors:
    • Whether the drug has a distinct HCPCS code
    • Where the drug is in its life-cycle
    • Payer policy regarding a drug or class of drugs
    • Practices’ level of billing sophistication
    • Pharmaceutical reimbursement team’s level of participation and effectiveness.
  • For this inaugural edition we looked at Calendar Year 2018. In the future issues, reports will be generated by quarter
  • Our goal is to simply educate and inform, not to single out a particular payer, product, or manufacturer, but there are issues that should be addressed as you will see.
  • Any questions or clarification please contact info@onpointoncology.com.

 

[1] This metric does not include outliers

[2] These numbers do not include outliers

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