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Rich66 · 10-28-2009, 11:55 AM

Proposed Payment Reductions Squeeze Oncologists

2009 Oct 28, Lee Schwartzberg, MD, PhD, Editor-in-Chief

This grim economic year has affected every health care sector, and oncology practices are no exception to this rule. In my recent travels around the country, I’ve witnessed clinics that have had to lay off staff, close satellites, sell their assets to hospitals, merge with competitors, and reduce office hours. Yet these changes may well represent just the tip of the iceberg.
Currently, 3 independent, but related, initiatives affecting the way physicians are paid are being hotly debated in Congress. These 3 concentric rings are tightening around oncologists, and unless favorable action occurs to loosen any (or all) of these belt-tightening initiatives, it is not a stretch to say that medical oncology as we know it may be irrevocably altered.
Proposed administrative pay cuts by CMS
The most oncology-specific issue is a proposed administrative pay cut by the Centers for Medicare & Medicaid Services (CMS) in services for chemotherapy administration, diagnostic imaging, and therapeutic radiation oncology. Such cuts in reimbursement could have potentially devastating effects on patient care. The origin of Medicare’s proposal stems from data provided by an American Medical Association (AMA) practice expense survey requested by the Medicare Payment Advisory Commission (MedPAC). The data used to justify such cuts is inherently flawed and misrepresentative of community oncology, given that only 50 oncologists responded to the AMA survey, and the mix of respondents was never characterized with respect to type of practice. It is a given that CMS reimbursement for chemotherapy administration is currently inadequate, and many constituent groups have replied to Medicare protesting these cuts.
Outpatient diagnostic radiology services
But what about diagnostic radiology services, which have been increasingly adopted in outpatient community offices? We incorporated computed tomography (CT) scanning into my own practice 20 years ago, and I still view this as the single best patient care decision we’ve ever made. Today, we have a full-service diagnostic radiology department, with the capability of performing the full spectrum of imaging studies, including CT, positron emission tomography (PET), magnetic resonance imaging (MRI), and ultrasound.
Having this radiology department at our clinic allows me to review every CT scan with our staff radiologists, who have vast experience in the presentation of various cancers. Not infrequently, such consultations lead to an alteration in a differential diagnosis, the suggestion for an alternative test, or a change in therapeutic approach. Wait time for patients to receive results is minimized, quality care is maximized, and productivity losses are greatly reduced. The reasons for these positive outcomes seem obvious: The on-site radiology department allows patients to receive all of their diagnostic and therapeutic care in a single facility, obviating the need for patients to schedule separate appointments in geographically remote facilities, where tests will likely be conducted by physicians who know nothing about their particular case or who have minimal insights into their specific circumstances.
Thus, the key question for me is: Will reducing reimbursement to outpatient radiology facilities, which will only serve to drive patients back to the hospital for testing, really decrease the cost of medical care? Or will this proposed reimbursement cut merely serve to lower the quality of such care?
Impact of proposed cuts, according to ASTRO survey
Moreover, the CMS rule proposes to cut radiation oncology services delivered in outpatient facilities by between 19% and 30%. A survey commissioned by the American Society for Therapeutic Radiation Oncology (ASTRO) demonstrated that two-fifths of respondents would actually close their practices if cuts in the 30% range were implemented. Half of rural practices would shut their doors under these circumstances, and the majority of practices that did manage to stay open would limit or no longer accept new Medicare patients.
Such cuts would have a huge impact on cancer care delivery in our country. Whether or not cuts of this magnitude will be implemented by CMS remains to be seen, however, so there is still opportunity for the oncology community to respond. Comments to CMS and unflagging communication with elected officials are absolutely critical to prevent these disastrous changes from being implemented on the basis of flawed information. A letter with bipartisan authorship signed by 32 senators protesting the cuts to radiation oncology was recently sent to Health and Human Services Secretary Kathleen Sebelius. The oncology community needs to maintain this type of pressure on our elected officials and the administration in the ensuing weeks.
Modifying the SGR formula
The second concentric circle relates to the long-standing need to modify the sustainable growth rate (SGR) formula. This formula, conceived to keep physician payments consistent with changes in the gross domestic product (GDP) over the years, has been a boondoggle requiring a temporary fix applied legislatively by Congress for each of the last several years to prevent huge and unsustainable cuts in physician payments. This issue was supposed to be resolved once and for all in 2009. Senator Debbie Stabenow (D-Mich) introduced legislation to alter the SGR formula and thereby correct the inequities. The bill, estimated to cost $240 billion over 10 years, was not accompanied by offsets in costs from other parts of the budget, however, and therefore actually added to the cost of Medicare—an approach that is very unpopular in Washington these days. This bill was soundly defeated on the Senate floor last week.
The Senate Finance Committee health reform bill does contain a 1-year SGR fix, which is fully offset by other reductions and therefore potentially more palatable. Nonetheless, even that potential solution does not provide a real fix for the SGR problem.
But if SGR is not fixed or if a comprehensive health reform bill does not pass, what’s in store for 2010? The most likely result will be a 21% reduction in Medicare fees. Such a drop in physician reimbursement would undoubtedly cause many, if not most, physicians to abandon Medicare. In the case of oncologists, for whom Medicare represents 45% of all patients, the ability to care for older individuals will become virtually impossible. And, if only a 1-year fix passes again, there is little realistic expectation that a fair solution to the SGR problem will survive the legislative process in 2010—especially after the exhausting year of debating health care reform that is now coming to a close. Still, this problem cannot be put off forever.
Health care reform bill
The third and widest initiative is, of course, the overall health care reform bill. Few would argue against the need for some form of health reform legislation, and signs still look good for a broad-based bill to pass Congress, even though it’s unclear whether a final bill reconciling the House and Senate versions will be brought to a final vote before the end of 2009. If this process extends into the early part of 2010, there are clear-cut political consequences for all Congressional representatives who are running for reelection, not to mention the impact on the President’s ambitious agenda beyond health care.
To date, the biggest sticking point between the Senate and House versions of health reform legislation is the public health plan option. Speaker of the House Nancy Pelosi (D-Calif) plans to keep the public option in the House version because of increasing pressure from liberal Democrats to do so. On the other side, the Senate seems strongly inclined to vote against any bill that includes a public option.
If a public plan is implemented, the greatest source of concern for oncologists is how well it is funded. The 2 basic proposals that have been advanced are as follows: (1) to pay providers at Medicare rates, or (2) to negotiate rates with providers, as would be done by private insurance companies. Most analysts believe any public plan would compete favorably with private payers and, in a few years, could be a dominant force in the non-Medicare market. If so, oncology providers paid at Medicare rates for their services could not afford to stay in business, since the current payment schedule is at or below cost and therefore is unsustainable. In my opinion, a public plan that negotiates with providers is a valid option, however. I believe that negotiating rates will ultimately drive down costs to patients in the private health insurance market. It should be noted that insurance premiums are rising significantly again this year, and are unsustainable for companies that provide health care insurance. A solution to the high cost of insurance premiums is necessary, but not on the backs of the providers.
Communication with elected officials is still key
So we head toward the holiday season with apprehension about what’s in store for Medicare, particularly with regard to oncology. However, uncertainty should not be confused with hopelessness or helplessness. Our elected officials do listen to their constituents. It’s incumbent upon all oncology practices and their patients to communicate with their elected representatives, and to explain what the stakes are for making decisions that fail to recognize the complexity of modern cancer care. Today’s oncology practitioners must not only plan treatment, assess treatment response, and provide coordination of care, but also offer disease surveillance, provide supportive and palliative care, and manage end of life. Most recently, we also have been charged with providing financial counseling to our patients who undergo expensive cancer treatments.
Current codes being used by the federal government fail to reimburse physicians for any of these services. Reach out to your representatives and ask them to support appropriate coding modifications that reimburse oncologists fairly for the work they do each day. Only by such outreach efforts will we be able to preserve access to the world’s best cancer care delivery system.

10-28-2009, 11:55 AM	#7
Rich66 Senior Member Join Date: Feb 2008 Location: South East Wisconsin Posts: 3,431	Re: Medicare facing cancer, cardiac care cuts Proposed Payment Reductions Squeeze Oncologists 2009 Oct 28, Lee Schwartzberg, MD, PhD, Editor-in-Chief This grim economic year has affected every health care sector, and oncology practices are no exception to this rule. In my recent travels around the country, I’ve witnessed clinics that have had to lay off staff, close satellites, sell their assets to hospitals, merge with competitors, and reduce office hours. Yet these changes may well represent just the tip of the iceberg. Currently, 3 independent, but related, initiatives affecting the way physicians are paid are being hotly debated in Congress. These 3 concentric rings are tightening around oncologists, and unless favorable action occurs to loosen any (or all) of these belt-tightening initiatives, it is not a stretch to say that medical oncology as we know it may be irrevocably altered. Proposed administrative pay cuts by CMS The most oncology-specific issue is a proposed administrative pay cut by the Centers for Medicare & Medicaid Services (CMS) in services for chemotherapy administration, diagnostic imaging, and therapeutic radiation oncology. Such cuts in reimbursement could have potentially devastating effects on patient care. The origin of Medicare’s proposal stems from data provided by an American Medical Association (AMA) practice expense survey requested by the Medicare Payment Advisory Commission (MedPAC). The data used to justify such cuts is inherently flawed and misrepresentative of community oncology, given that only 50 oncologists responded to the AMA survey, and the mix of respondents was never characterized with respect to type of practice. It is a given that CMS reimbursement for chemotherapy administration is currently inadequate, and many constituent groups have replied to Medicare protesting these cuts. Outpatient diagnostic radiology services But what about diagnostic radiology services, which have been increasingly adopted in outpatient community offices? We incorporated computed tomography (CT) scanning into my own practice 20 years ago, and I still view this as the single best patient care decision we’ve ever made. Today, we have a full-service diagnostic radiology department, with the capability of performing the full spectrum of imaging studies, including CT, positron emission tomography (PET), magnetic resonance imaging (MRI), and ultrasound. Having this radiology department at our clinic allows me to review every CT scan with our staff radiologists, who have vast experience in the presentation of various cancers. Not infrequently, such consultations lead to an alteration in a differential diagnosis, the suggestion for an alternative test, or a change in therapeutic approach. Wait time for patients to receive results is minimized, quality care is maximized, and productivity losses are greatly reduced. The reasons for these positive outcomes seem obvious: The on-site radiology department allows patients to receive all of their diagnostic and therapeutic care in a single facility, obviating the need for patients to schedule separate appointments in geographically remote facilities, where tests will likely be conducted by physicians who know nothing about their particular case or who have minimal insights into their specific circumstances. Thus, the key question for me is: Will reducing reimbursement to outpatient radiology facilities, which will only serve to drive patients back to the hospital for testing, really decrease the cost of medical care? Or will this proposed reimbursement cut merely serve to lower the quality of such care? Impact of proposed cuts, according to ASTRO survey Moreover, the CMS rule proposes to cut radiation oncology services delivered in outpatient facilities by between 19% and 30%. A survey commissioned by the American Society for Therapeutic Radiation Oncology (ASTRO) demonstrated that two-fifths of respondents would actually close their practices if cuts in the 30% range were implemented. Half of rural practices would shut their doors under these circumstances, and the majority of practices that did manage to stay open would limit or no longer accept new Medicare patients. Such cuts would have a huge impact on cancer care delivery in our country. Whether or not cuts of this magnitude will be implemented by CMS remains to be seen, however, so there is still opportunity for the oncology community to respond. Comments to CMS and unflagging communication with elected officials are absolutely critical to prevent these disastrous changes from being implemented on the basis of flawed information. A letter with bipartisan authorship signed by 32 senators protesting the cuts to radiation oncology was recently sent to Health and Human Services Secretary Kathleen Sebelius. The oncology community needs to maintain this type of pressure on our elected officials and the administration in the ensuing weeks. Modifying the SGR formula The second concentric circle relates to the long-standing need to modify the sustainable growth rate (SGR) formula. This formula, conceived to keep physician payments consistent with changes in the gross domestic product (GDP) over the years, has been a boondoggle requiring a temporary fix applied legislatively by Congress for each of the last several years to prevent huge and unsustainable cuts in physician payments. This issue was supposed to be resolved once and for all in 2009. Senator Debbie Stabenow (D-Mich) introduced legislation to alter the SGR formula and thereby correct the inequities. The bill, estimated to cost $240 billion over 10 years, was not accompanied by offsets in costs from other parts of the budget, however, and therefore actually added to the cost of Medicare—an approach that is very unpopular in Washington these days. This bill was soundly defeated on the Senate floor last week. The Senate Finance Committee health reform bill does contain a 1-year SGR fix, which is fully offset by other reductions and therefore potentially more palatable. Nonetheless, even that potential solution does not provide a real fix for the SGR problem. But if SGR is not fixed or if a comprehensive health reform bill does not pass, what’s in store for 2010? The most likely result will be a 21% reduction in Medicare fees. Such a drop in physician reimbursement would undoubtedly cause many, if not most, physicians to abandon Medicare. In the case of oncologists, for whom Medicare represents 45% of all patients, the ability to care for older individuals will become virtually impossible. And, if only a 1-year fix passes again, there is little realistic expectation that a fair solution to the SGR problem will survive the legislative process in 2010—especially after the exhausting year of debating health care reform that is now coming to a close. Still, this problem cannot be put off forever. Health care reform bill The third and widest initiative is, of course, the overall health care reform bill. Few would argue against the need for some form of health reform legislation, and signs still look good for a broad-based bill to pass Congress, even though it’s unclear whether a final bill reconciling the House and Senate versions will be brought to a final vote before the end of 2009. If this process extends into the early part of 2010, there are clear-cut political consequences for all Congressional representatives who are running for reelection, not to mention the impact on the President’s ambitious agenda beyond health care. To date, the biggest sticking point between the Senate and House versions of health reform legislation is the public health plan option. Speaker of the House Nancy Pelosi (D-Calif) plans to keep the public option in the House version because of increasing pressure from liberal Democrats to do so. On the other side, the Senate seems strongly inclined to vote against any bill that includes a public option. If a public plan is implemented, the greatest source of concern for oncologists is how well it is funded. The 2 basic proposals that have been advanced are as follows: (1) to pay providers at Medicare rates, or (2) to negotiate rates with providers, as would be done by private insurance companies. Most analysts believe any public plan would compete favorably with private payers and, in a few years, could be a dominant force in the non-Medicare market. If so, oncology providers paid at Medicare rates for their services could not afford to stay in business, since the current payment schedule is at or below cost and therefore is unsustainable. In my opinion, a public plan that negotiates with providers is a valid option, however. I believe that negotiating rates will ultimately drive down costs to patients in the private health insurance market. It should be noted that insurance premiums are rising significantly again this year, and are unsustainable for companies that provide health care insurance. A solution to the high cost of insurance premiums is necessary, but not on the backs of the providers. Communication with elected officials is still key So we head toward the holiday season with apprehension about what’s in store for Medicare, particularly with regard to oncology. However, uncertainty should not be confused with hopelessness or helplessness. Our elected officials do listen to their constituents. It’s incumbent upon all oncology practices and their patients to communicate with their elected representatives, and to explain what the stakes are for making decisions that fail to recognize the complexity of modern cancer care. Today’s oncology practitioners must not only plan treatment, assess treatment response, and provide coordination of care, but also offer disease surveillance, provide supportive and palliative care, and manage end of life. Most recently, we also have been charged with providing financial counseling to our patients who undergo expensive cancer treatments. Current codes being used by the federal government fail to reimburse physicians for any of these services. Reach out to your representatives and ask them to support appropriate coding modifications that reimburse oncologists fairly for the work they do each day. Only by such outreach efforts will we be able to preserve access to the world’s best cancer care delivery system.