2014 Forecast Series-A conversation with
Nancy Davenport-Ennis is the founder of two national nonprofit organizations: The Patient Advocate Foundation (PAF) and the National Patient Advocate Foundation (NPAF). The Patient Advocate Foundation is a 501(c)3 nonprofit direct patient services organization whose mission is to help remove obstacles to the access of healthcare for people with chronic, debilitating, and life threatening conditions. The Foundation seeks to resolve medical debt crisis for patients and works to stabilize job security for people who are diagnosed with a chronic, debilitating, or life threatening condition, so that they don’t lose their jobs once they’re diagnosed.
The 501(c)4 National Patient Advocate Foundation is a policy organization. The purpose of the NPAF is to take the data collected across every patient served through the Patient Advocate Foundation and use it to support regulatory improvement or legislative reform at the State and the Federal levels.
OBR: OK. First, I’d like to look back on 2013 before we go forward. From your point of view, would you call 2013 a turbulent year, primarily because of sequester?
NDE: It has been a turbulent year for a number of reasons, one of which is sequester and certainly the rocky rollout of the Affordable Care Act, which many providers and nonprofit groups have spent so much time trying to develop and get passed. Not to mention the new approach in the Senate as they develop a new SGR platform for reimbursement. All three of those have created great turbulence.
OBR: How do you see those issues translating into 2014?
NDE: Certainly, 2014 is the year for full implementation of the Affordable Care Act. We are curious to see how the program is working out for the uninsured and how is it working in relation to our providers. For instance, will our patients be able to continue to see their providers? Are the networks robust enough? What do the formularies look like in the plans that are part of the exchanges? The law calls for an evaluation in 2016 to answer the basic question: Are the essential health benefits provided by the ACA what they need to be? We need to start collecting that data now to answer that one important question.
OBR: How soon do you think you might be able to gauge if patients are receiving these essential health benefits and then make an assumption about whether the ACA is working for cancer patients?
NDE: We’ve already begun the process of collecting data. For every patient who calls in, who may be enrolled in an exchange product or marketplace product we are recording what issues they’re facing around access to care. We’re also tracking what we do to resolve the issue and then record how that issue relates to the essential health benefit feature of the caller’s plan. We plan on publishing the findings of our data toward the end of 2014. We are beginning to understand who the people are that are enrolling, their household income, where they live, and employment. I think we’ll be able to be the canary in the coalmine fairly quickly, and be on the front lines in providing the gap services and benefits consumers need.
OBR: Can you give me an idea of how many patients are calling in to PAF to tap into your resources?
NDE: Between October 1st and January 10, 2014, we had 647 people contact us for information about the marketplace plans and how to enroll. Due to the well-known computer glitches, none of them initially could complete the enrollment online, but we were able to move more than 250 through the paper process of filling out the application and submit the application on their behalf. I think it was discouraging for people who were excited about reaching out and re-organizing personal budgets to get health insurance only to be deterred by computer glitches.
Last year, we served over 109,200 patients, 81% of whom were cancer patients. From that number, about 18% were completely uninsured, 38% were Medicare, and about 19% were Medicaid. So I would suspect that this year, a large portion of that uninsured population may have moved into a marketplace or an exchange product.
OBR: Let me roll into sequester. Do you have hope that we’re going to see it repealed or providers will be given a break on the 2% drug reimbursement cuts?
NDE: With regard to sequester, I think everyone knows that we have to take financial pressure off providers, the research community, and oncology, if we’re going to keep our national framework in place. And when you think about any business in America, any service in America, being hit with a 2% across the board financial cut is serious. Everyone is aware that the 2% drug reimbursement cut needs to end. For us, sequester needs to be removed entirely. The issue is very much at play in Washington, but we also have the added complexity of trying to develop an entirely new platform for physician reimbursement to replace the SGR model.
The sequester remains in place. In fact, recent information notes that Senate Democrats are willing to extend it by one year to pay for an extension of emergency unemployment benefits. The Bipartisan Budget Act of 2013 doesn’t replace all sequester cuts, but it does provide $65 billion in sequester relief over two years, evenly divided between defense and nondefense programs.
Discretionary spending for defense programs in FY2014 would total $520.5 billion. The nondefense spending level would be $491.8 billion. The lower sequester amount is offset by $65 billion in so-called “deficit reduction provisions,” including a combination spending cuts and higher user fees. The deal also extends the mandatory sequester through 2023, which saves an additional $28 billion that is used for deficit reduction.
Regarding SGR, the December 18 budget agreement also includes a 3-month patch to mid-March 2014. The House Energy & Commerce Committee on July 31 passed H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013 to transform the Medicare physician payment system. First and foremost, the bill repeals the flawed SGR system and replaces it with a fair and stable system of payments. Instead of looming annual cuts, physicians will be rewarded for the quality of care they provide to Medicare beneficiaries. On December 12, the Ways & Means passed the Medicare Patient Access and Quality Improvement Act (also HR 2810), and Senate Finance passed the SGR Repeal and Medicare Beneficiary Access Improvement Act. Their respective chambers have not yet considered the bills.
2014 Forecast Series-A conversation with
Nancy Davenport-Ennis (cont.)
OBR: In terms of your constituents, how is it hurting them?
NDE: They have less access to community healthcare. If we look at the last 6 years under the ASP reimbursement formula, 288 community cancer clinic sites have completely closed their doors. Another 407 have reported financial difficulty. Some argue that of the 288 practices that closed, some of them have merged into existing hospitals. While that may be true, the capacity to serve a community is usually different after a merger. A practice with 10 doctors, 20 infusion chairs, and an oncology nursing staff doesn’t necessarily have all of that in a hospital outpatient facility. Some of the oncologists decide to take early retirement or just retire after a merger. Any way we look at it, when practices merge with community hospitals, there’s usually loss of capacity to serve the public. Not to mention for our patients, who walk into a hospital outpatient for services, they have added copayment and coinsurance responsibilities out-of-pocket that they didn’t have when they walked into a community oncologist’s office.
It’s also important to note, 62% of community oncology practices report that they are forced to send their Medicare patients elsewhere for treatment, due to sequester cuts. That’s huge. I am married to a man who is a stage IV cancer survivor and I am a 22-year survivor of cancer and I can tell you that when you say to a cancer patient we’re not going to treat you where you’ve been used to being treated, we’re not going to have the same doctor taking care of you, we’re going to send you 20 miles across town, or whatever the distance is, some of those cancer patients will not make that transition. Not because they don’t want to, but because they can’t afford to, or they don’t have transportation, or they don’t have someone that can go and stay with them. Many of the hospital outpatient programs require that a caregiver be present at the time of infusion. It’s a complicated issue and displacement of patients is real and impacts outcomes, no doubt about it.
OBR: Well said. We’ll move on to SGR.
NDE: SGR remains a complicated issue, and it’s a very expensive issue to resolve. I do think Washington is committed to finding a solution, because every year that SGR is delayed, we lose oncologists. We’re even losing people from the medical schools who are not willing to move into the area of oncology, because of the destabilized reimbursement framework we’ve had in place for more than 10 years.
We are supportive of value-based purchasing as are the physicians who are working on this issue. The measurement of value in determining level of reimbursement is certainly going to be an active part of the new reimbursement discussion. But I think it’s very important that physicians have the ability in any new reimbursement structure to have their individual performance measured in the areas of quality and value.
OBR: What are your main concerns for 2014?
NDE: Specialty tiers in the legislative area and the regulatory area remain a key concern to the constituents we serve. Today in the United States, 99% of all of health plans that are in Part D are using specialty tiers as a mechanism to control financial risk. And, 14% of commercial plans are using specialty tiers as a way to control their financial risk. What that means for the average consumer is that if a drug is placed on a Tier 4 specialty, the out of pocket responsibility can range anywhere from 25% of the cost of that drug up to 71%. For cancer patients, they simply can’t afford 71% of the cost of a newly branded drug that is being placed into the specialty drug tier category. The high out-of-pocket costs can lead to insurmountable medical debt crises. In 2012, almost 65% of patients who reached out to PAF for assistance reported annual household income of less than $23,000, with 32.5% reporting earnings of less than $11,000.
To date, 23 states have considered legislation to regulate or prohibit specialty drug tiers, though not all have adopted legislation. Both Avalere Heath and Milliman produced reports – one citing what the impact to CMS would be if they eliminated specialty tiers, the other reporting what would happen in commercial plans with the cost of premiums if specialty tiers were eliminated. In both instances, the costs are minimal, pennies per day. $5.00 per month in the instance of Medicare. If Tier 4 was eliminated, and the drugs moved back to a specialty Tier 3B, it would allow for no more than a 10% increase on the cost of the drug in the specialty Tier 3B. NPAF recently completed an analysis of almost a thousand Medicare patients who are on specialty tier drugs. The study reflected that 23% of those patients had more than 33% out of pocket cost share per prescription. In real dollars and cents, that meant an average of $508.00 per prescription, and if they had a plan where their coinsurance rate was 34% and higher, their average out of pocket expense for one drug was $817.00 per prescription. If a patient is chronically or critically ill, he is seldom only on one medication. For most cancer patients they’re on five to seven drugs.
In a study cohort that was analyzed, 22.9% of these people had 2 drugs or more on the specialty tier level. A study by Prime Therapeutics found that one in 6 cancer patients with high out-of-pocket costs abandon their medication and that patients with out-of-pocket costs greater than $200 were at least three times more likely to not fill their prescriptions than those with OOP costs of a $100 or less.
Oral parity is another priority. Oral anti-cancer medications offer substantial advantages to cancer patients in several ways. Ease of use and they can be taken at home, which is critical for patients, particularly those who contact us. Opponents claim parity bills will raise insurance rates but the available data refutes that charge. Studies by Milliman and the Texas Department of Insurance (both in 2010) agree that the net result of parity legislation on total insurance costs would only be between $.05 and $.50 per member per month.
OBR: How do you want to sum up?
NDE: Patient Advocate Foundation stays abreast of all current and upcoming elements associated with the staggered implementation of the ACA. We’ll continue to ensure that all patients, providers, and stakeholders involved in healthcare delivery are informed. In 2014, The National Patient Advocate Foundation will continue working to protect access to community cancer care by communicating the access barriers and increased costs faced by patients when policies force local clinics to close or merge with major hospital systems.