January 2014 Edition Vol.8, Issue 1

2014 Forecast Series-A conversation with Nancy Davenport-Ennis

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. 

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