Drug Costs, Limited Claims Reimbursement Challenge Cancer Care

January 09, 2017 - Cancer care centers named high prescription drug costs and lack of claims reimbursement for supportive services as the top challenges associated with providing care in 2016, according to an annual Association of Cancer Care Centers (ACCC) survey.

Of the 166 cancer care providers and administrators surveyed, about 83 percent identified prescription drug costs as the highest-ranking cancer care obstacle, up from just 45 percent of respondents in 2015.

Cancer care prescription drug rates are on the rise, especially as innovative treatments emerge. For example, cancer care drug spending on biologics, cytotoxics, and other drugs increased from 15 to 18 percent for Medicare beneficiaries and from 15 to 20 percent for privately insured patients, Milliman and the Community Oncology Alliance reported in April 2016.

The report stated that prescription drug costs rose faster than other cancer care costs because of treatment advances, such as biological therapies and breakthrough medications.

High prescription drug rates, however, may have impeded targeted therapy implementation. The ACCC survey stated that cost was the greatest barrier to using targeted therapies.

READ MORE: Value-Based Payment Preparation Requires Cost Measurement

To combat increasing prescription drug costs, 56 percent of surveyed cancer centers are tracking the frequency and use of high-cost drugs and 48 percent are establishing cost-containment best practices, such as lower-cost medication utilization. Another 31 percent started to require providers to meet quality and cost management goals.

One surveyed medical director also stated that his cancer center was trying to “stay on formulary as much as possible; keep less effective drugs off formulary; use our financial counselors and pharmacists to help reduce patient cost.”

In addition to cancer care drug costs, two-thirds of cancer care center providers identified a lack of reimbursement for non-revenue producing services as a top challenge in 2016. The survey showed that many key services that improve patient care are not paid for by payers, including financial advocacy, care navigation, and survivorship activities.

“While ACCC member cancer programs have made great strides in advancing patient-centered care, it’s clear that payer policies are lagging behind,” stated Jennie R. Crews, MD, MMM, FACP, ACCC President. “Reimbursement for these services is especially critical as we transition to new models of cancer care delivery such as the Oncology Care Model (OCM) and the Merit-Based Incentive Payment System (MIPS).”

In response to community health needs as well as new alternative payment models, cancer care centers have or are planning to implement more non-reimbursable supportive services. About 61 percent of cancer care administrators said their organization has or will add care navigation services and another 52 percent reported implementing or planning to implement financial advocacy services.

READ MORE: Would Proposed Value-Based Reimbursements Reduce Drug Costs?

Thirty-nine percent of administrators also stated that their cancer care center developed or will add caregiver support programs.

To implement the supportive services and meet patient-centered care demands, cancer care centers employed more providers and support staff in 2016, even though the positions were non-reimbursable. For example, 64 percent of nurses and administrators said their organization added more nurse navigators and 51 percent said they added more financial advocates.

About one-third of cancer care centers paid for the non-reimbursable positions out of revenue produced from medical and radiation oncology, while one-fourth funded the positions via community donations or philanthropy.

Despite not receiving claims reimbursement for the supportive services and positions, 80 percent of respondents said their centers incur the costs to promote quality, patient-centered care.

Additionally, the third-highest challenge cancer care centers faced in 2016 was a lack of private health insurance policy transparency. Sixty-five percent of respondents pinpointed limited health insurance transparency, including what patient policies cover, as a major obstacle last year.

READ MORE: Value-Based Care Reimbursement Needs Greater Customization

While patients and providers remained confused as to what services would be covered, the survey found that most centers were still lacking sufficient patient financial responsibility education. The findings included:

• Only 39 percent of participants said financial advocates connect with all patients to discuss insurance options and cancer care costs

• 39 percent reported that financial advocates meet with all patients to go over co-pay programs and patient financial responsibility

• About one-third stated that their center has a formal pre-authorization and cost estimate program

• 26 percent said financial advocates give all patients estimated healthcare costs

In addition, only half of surveyed medical directors said they felt “very comfortable” with having financial discussions with patients.

With low comfort levels, providers may be skipping cancer care cost talks with their patients. A December 2016 Cancer Support Community report stated that 68 percent of cancer patients never had a cost discussion with their providers.

The lack of patient financial responsibility education, however, could cause patients to forego recommended care, the Cancer Support Community said. Almost 72 percent of cancer patients reported not receiving recommended care because they could not afford it.

While cancer care centers faced significant roadblocks in 2016 with high drug prices, lagging reimbursement models, and lack of coverage transparency, the ACCC noted that identifying cancer care challenges is key to succeeding in value-based reimbursement models.

“An important part of these conversations: identifying practical strategies and solutions to help prepare our cancer programs for the sweeping healthcare changes that are almost certain to come,” concluded ACCC.