Cancer CarePoint Blog

Senate Approves Bill to Reverse Medicare Cuts

The Senate voted July 9 to stop the 10.6 percent Medicare cuts by a veto proof margin after a dramatic, last minute appearance by Sen. Ted Kennedy (D-Mass.).

The Senate previously failed by one vote on a procedural step necessary to consider HR 6331, the House-passed Medicare bill. Kennedy missed the first vote due to receiving treatments for cancer. Kennedy's "yes" vote Wednesday, his first appearance on the Senate floor since his diagnosis, gave Democrats the necessary 60 votes to proceed, and resulted in several Republicans changing their votes to "yes." HR 6331 would avert the 10.6 percent payment cut to Medicare physicians and provide a positive 1.1 percent payment update in 2009. Sixty-nine votes are enough to override a likely Presidential veto of the bill. The House also passed the measure with enough votes to override a veto. ASTRO members have been contacting their Senators over the last few weeks, urging them to pass the Medicare bill and reverse the cuts, which took effect July 1. According to our records, more than 500 member activists have sent more than 1,000 messages to their Senators. This grassroots activity has greatly surpassed all previous ASTRO grassroots initiatives.

Source: ASTROGRAM

The Impact of Medicare Reimbursement Changes on Hematology/Oncology Practices

In late 2006, the Centers for Medicare & Medicaid Services finalized the much-anticipated 2007 Physician Fee Schedule, which included two major changes that affected reimbursement:

• An increase work component of relative value units (RVUs) for Evaluation and Management (E&M) services.
• A revised methodology for calculating the practice expense (PE) component of RVUs, which will be phased in over four years from 2007 to 2010.

For hematology/oncology practices, a comparison of median work RVUs and total RVUs under Medicare's 2006 PFS, 2007 PFS, and 2007 PFS with the budget neutrality adjustor (BNA) illustrates that for the same set of Current Procedural Terminology Fourth Edition (CPT) codes, there was an overall increase in both total RVUs and work RVUs.

These Medicare PFS changes have several distinct implications for compensation planning and reimbursement for hematology/oncology practices, which include the following:

• This increase in 2007 RVUs signifies that, for the same amount of work, hematology/oncology practices received a 5.5% increase in reimbursement from Medicare for E&M services and drug administration.
• Practices that employ compensation models that utilize work RVUs or total RVUs are at risk for higher payments to physicians for effectively the same level of productivity.

On Nov. 1, 2007, CMS released the 2008 PFS final rule. The most significant change in the 2008 release is the reduction of the conversion factor by 10.1% from the 2007 level. This reduction of the conversion factor will offset the reimbursement increases experienced by hematology/oncology practices in 2007. In addition, Medicare reimbursement to hematology/oncology practices is anticipated to decline an additional 1.4% as a result of the reduction in both work RVU and PE RVU values in 2008.

Organizations with significant Medicare populations need to assess the impact of these reimbursement changes. Likewise, reimbursement from commercial carriers will likely be impacted when these carriers adopt the 2007 and 2008 RVUs. Similarly, managed care contracts based on a percentage of the Medicare reimbursement will need to be reevaluated.

Figure 1. Hematology/Oncology Median RVUs*

Hematology/Oncology	2006 production under the 2006 PFS	2006 production under the 2007 PFS	2006 production under the 2007 PFS with the BNA	Difference between 2006 production under the 2007 PFS with the BNA
Total RVUs	11,250	12,451	11,888	5.5%
Work RVUs	4,560	5,566	5,006	9.8%

*Based on an analysis of 35 hematology/oncology physicians' total CPT 2006 production data.

Source:  ECG Management Consultants Inc.--Nicki N. Nguyen-Colvin, Maria C Hayduk, Jessica L Turgon; Hematology & Oncology News & Issues (January 2008)

Cancer docs made $275 million on bunk study

MSNBC.com describes a report that suggests that taypayers footed the bill for ‘unreliable’ research. Excerpts below.

Link: Cancer docs made $275 million on bunk study - Cancer - MSNBC.com

Cancer doctors received about $275 million from the federal government and the elderly last year as part of a yearlong research project that many doctors believe won’t produce any useful findings.

Under the program, the federal government paid $130 each time a chemotherapy provider assessed a Medicare patient’s pain, fatigue and nausea. The payments were designed to encourage doctors to report information that might one day lead to improved care for cancer patients.

In a report to be released Wednesday, the inspector general for the Health and Human Services Department cast doubt on whether the money was well spent. He questioned the integrity of the data that doctors submitted.

While the federal government will foot the bill for most of the unreliable data, senior citizens and disabled Americans on Medicare paid, too. That’s because they were charged $26 each time their doctors billed Medicare for submitting information about their side effects.

Doctors, meanwhile, made tens or hundreds of thousands of dollars off the program.

Medicare officials disputed that the program was wasteful. They said the program was an initial step in the Bush administration’s push to measure the quality of health care.

The project proved valuable in showing that it was indeed feasible to get doctors on a large-scale basis to report important quality measurements from their offices, Medicare officials said. In coming years, those measurements will be refined and improved, which could lead to potential breakthroughs in care.

About 90 percent of eligible health care providers participated in the program. The median amount paid to each physician was $23,000. But some doctors got a lot more.

The top 10 billers, whom the IG declined to identify, received more than $270,000 each. One oncologist in Florida billed the government for $625,803. Another in Kansas billed for $507,563.

The Centers for Medicare and Medicaid Services regularly carries out research, but the chemotherapy project is by far the biggest. It was estimated to cost $300 million, including the beneficiaries’ copays. The next largest project will cost $60 million over eight years.

A commission that advises Congress on Medicare issues noted in January that it visited oncologists in five states as part of a review of the program.

Decisions About Chemotherapy

In his Health Care Renewal blog, Roy M. Poses MD describes a New York Times article about financial incentives affecting physicians. Excerpts below.

Source: Health Care Renewal: Complexity, Conflicts of Interest, and Cancer Doctors' Decisions About Chemotherapy.

The New York Times recently reported on research suggesting the susceptibility of physicians to financial incentives. The research, and how it was reported, illustrate the complexity of untangling issues of conflict of interest affecting physicians and other health care decision makers.

To summarize, the Times reported on a study just published in Health Affairs that found "providers who were more generously reimbursed prescribed more costly chemotherapy regimens to metastatic breast, colorectal, and lung cancer patients." The Times noted that "unlike other physicians, cancer doctors can profit from the sale of chemotherapy drugs in a practice known as the chemotherapy concession." So, "while critics say this creates a potential conflict of interst among oncologists advising patients on treatment, the doctors have said that the profit is needed to pay the high cost of running their practices." The Times then quoted opposition to the notion that physicians' decisions were ruled by conflict of interest from an "executive" [actually, Interim Executive Vice President and CEO] of the American Society of Clinical Oncology, Dr Joseph S Bailes, who said words to the effect that "cancer doctor select treatments only on the basic of clinical evidence." The Times then interviewed the study's senior author, Professor Joseph P Newhouse of Harvard, who argued that "there is little evidence that one chemotherapy drug works better than another, [so] 'the physicians have more control over the agents chosen.'" Bailes countered that "there was clear clinical evidence about which drugs should be used even in advanced stages of the disease and that doctors recommend the most appropriate treatments." But Dr Craig C Earle, another study author, had the last word, arguing that "doctors, despite their insistence that their treatment decisions are based solely on what is best for the patient, are affected by payment policies and other financial influences, including gifts from drug companies...."

So what really is the message, that physicians make appropriate decisions based on the evidence, or that they are influenced by financial incentives, including gifts from drug companies? The Times reported the research results in the context of a tit-for-tat among the articles' authors and the ASCO CEO. By giving the authors more air time and the last word, the Times seemed to slightly favor their point of view.

So maybe this is all another argument for what I have said before about conflicts of interest: I suggest developing a broad set of principles about conflicts of interest, and generally about business ethics in health care, focused on all transactions with outside organizations with their own vested interests or agendas. These principles should apply to all who make decisions in health care, physicians, other health care professionals, and leaders of health care organizations. The details of the implementation of these principles could vary, so as to apply to the setting and role of each individual.

For what it's worth, my gut feeling is that most physicians try to make decisions based on evidence, on patients' characteristics and their preferences, but that it is hard not to be influenced by other factors, including financial incentives.

I should also note that the only financial incentives the study analyzed were Medicare reimbursement rates. Conflicts of interest, such as gifts by pharmaceutical firms to physicians, may affect their decisions, but this study was not designed to assess such conflicts. Hence Dr Earle's last comment may reflect his beliefs, and may be true, but does not follow from this single study's results.

So maybe this is all another argument for what I have said before about conflicts of interest: I suggest developing a broad set of principles about conflicts of interest, and generally about business ethics in health care, focused on all transactions with outside organizations with their own vested interests or agendas. These principles should apply to all who make decisions in health care, physicians, other health care professionals, and leaders of health care organizations. The details of the implementation of these principles could vary, so as to apply to the setting and role of each individual.

CMS to Reduce Payments for Radiation Oncology by 5 percent for 2006

Source: American Society for Therapeutic Radiology and Oncology - ASTROgram

CMS notified the public last week in the 2006 Medicare Fee Schedule Final Rule that they would not be implementing their proposal from earlier this year to update their data with current data from practice expense supplemental surveys performed by many specialty societies. ASTRO is very disappointed by this decision. Radiation oncologists can now expect approximately an average 5 percent reduction in Medicare reimbursement for 2006. ASTRO plans to work with CMS in the hope of correcting this problem for 2007.