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From the Editor-In-Chief: Getting to The Prestige in Cancer Care
Joseph Alvarnas, MD
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Squaring Value-Based Payment With Innovation in Oncology

Mary Caffrey
Finding a place for value-based payment with the fast paced innovation in oncology.
A session of the NCCN summit, Paying for Innovation, asked how oncologists could continue to offer game-changing treatments, like chimeric antigen receptor (CAR) T-cell therapy, if payers cannot figure out how to fund them.4 CAR T-cell therapy offers a textbook case, because Novartis initially reached a value-based payment agreement with CMS when the first therapy, tisagenlecleucel (Kymriah), was approved. But then CMS changed course and launched a national coverage analysis for the therapies, in response to a request from UnitedHealthcare.19

The August 22, 2018, meeting of the Medicare Evidence Development and Coverage Advisory Committee endorsed 4 tools to measure patient-reported outcomes (PROs), as part of the national coverage determination for CAR T-cell therapy pricing. A Novartis representative said the process could lead to a slowdown in access to CAR T-cell therapy and asked that the process be withdrawn. Others asked whether PROs could be applicable to CAR T-cell therapy, which is known to have side effects that include cytokine release syndrome.19

Because of the unique administration requirements of CAR T-cell therapy—each treatment must be manufactured individually from a patient’s cells—it is only administered at select centers. Leaders from cancer centers who attended the NCCN summit and those who spoke earlier this year with EBO said the enormous financial risk demands intense involvement from senior officials at institutions. Tisagenlecleucel has a list price of $475,000, and the second approved therapy, axicabtagene ciloleucel (Yescarta), lists at $373,000; with the cost of adminis- tration and treatment of side effects, some estimates put the full cost of a treatment at $1 million. But unlike earlier therapies that could shrink tumors or delay disease progression, CAR T-cell therapies offer the promise of curing disease.

How does the OCM handle CAR T-cell therapy, which had not been approved when the model began in 2016? OCM participants can still receive the $160 monthly payment for each patient, but the total cost of care is not counted within the performance element. In August, CMS finalized rules that included an extra $72 million for CAR T-cell payments for 2019, based on increased Medicare technology add-on payments and a higher diagnostic-related group weighting, similar to transplants. But experts who spoke with EBO say under the current reimbursement structure, institutions will lose money on this treatment process.19

“With the current CMS reimbursement models for both the [Prospective Payment System (PPS)] and PPS-exempt centers, those who provide inpatient CAR T-cell treatments to patients assume enormous financial risks around the product acquisition costs and are at further risk for losses related to the clinical care of patients following the infusion of the products,” Alvarnas said.

Moving to Two-Sided Risk

Verma stirred debate with an August 9, 2018, post on the Health Affairs blog, when she wrote that accountable care organizations (ACOs) that only accept 1-sided risk are not saving Medicare enough money and proposed rules will push ACOs into 2-sided risk more quickly.20 Many disagree, as expressed by Kip Sullivan, JD, who chairs the policy advisory committee for Healthcare for All - Minnesota. Sullivan said Verma’s own numbers show that the difference between ACOs taking 1-sided or 2-sided risk have been so small they matter little within the context of what Medicare spends.21

Oncologists who spoke with EBO took exception to Verma’s remarks in late July at the Commonwealth Club in California, where she implied that doctors are part of the problem in the high cost of prescription drugs in Medicare Part B. “Today, Medicare is a price taker in our Part B program, we don’t negotiate, and manufacturers can charge whatever they want. And Medicare incentivizes them to charge more, because doctors that prescribe their drugs are paid on a percentage of the cost of the drug,” Verma said. “So, the more the drug costs, the more the doctor gets. This is another example of misaligned financial incentives in Medicare that are driving up costs.”22

The underlying assumption, that health systems aren’t trying hard enough, falls apart when experts report on the complexity of CMS programs and the OCM, in particular. Darcie Hurteau and Alyssa Dahl of DataGen, writing earlier this year in EBO, said CMS’ initial release of OCM reconciliation data revealed administrative headaches that could make a move to 2-sided risk burdensome. DataGen and others had to tell CMS about errors in an

initial data, and CMS had to send the data a second time. Hurteau and Dahl also reported that some providers received far less from the novel therapy adjustment than they had anticipated. Other participants were pleasantly surprised. However, Hurteau and Dahl wrote that it’s already time for those who didn’t see savings to start thinking about downside risk, even though they won’t have to decide until the middle of 2019.23

The first evaluation report on OCM is expected before the end of 2018, according to a calendar outlined by CMS officials. Bruce Feinberg, DO, of Cardinal Specialty Solutions, and Bruce Gould, MD, of Northwest Georgia Oncology Centers, who also took part in the AJMC® panel discussion, said there are many financial details that need to be worked out, including implementation of the 13-point care plan from the Institute of Medicine. The plan requires practices to discuss treatment goals, develop a treatment plan that anticipates response to treatment, assess psychosocial needs, and develop a survivorship plan.2,23

Lyss said that although CMMI is more flexible relative to other government agencies, it still must move more quickly to keep pace with the science. He and Patton agreed that the “cliff” will come when it’s time for practices to decide whether to move to 2-sided risk. They agreed that the challenges with the novel therapy adjustment are fixable, and CMMI will have to fix them—because it’s not in the agency’s interest for practices to drop out of

the program. Lyss said there are some examples of models in the commercial sector that could offer a guide for where CMMI should go. There’s no single right way to account for rapidly rising drug costs, he said. “It’s far from a settled issue,” he added, and Medicare’s population is older with more comorbidities. But the commercial sector does offer ideas.

If practices use innovative therapies, Lyss said, “they are going to be more expensive, and we’ve got to find a way to account for that.”

“We appreciate CMS’ stated efforts in wanting to move toward value-based care delivery,” Alvarnas said. “In order to get to this aspirational state, we need to have robust engagement between CMS and the key stakeholders in the cancer care domain to ensure that value-based care ensures that patients and families receive the care they need without unnecessary delays, excessive patient-borne costs, or unsustainable payments to physicians and healthcare systems.”

With reporting by Allison Inserro and Samantha DiGrande.

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  2. Implementing alternative payment models for improved population 18. health: experiences from the OCM. The American Journal of Managed Care® website. Published June 28, 2018. Accessed September 27, 2018.
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  9. COA physician survey: Medicare Part B proposals will harm patients, 23. increase costs and bureaucracy [press release]. Washington, DC: COA; May 16, 2018. physician-survey-medicare-part-b-proposals-will-harm-patients-in-crease-costs-and-bureaucracy/Accessed September 27, 2018.
  10. New paper captures pain, suffering and anxiety inflicted on patients with cancer by pharmacy benefit managers [press release]. Washington, DC: COA; August 9, 2018. august-9-new-paper-captures-pain-suffering-and-anxiety-inflict- ed-on-patients-with-cancer-by-pharmacy-benefit-managers/. Accessed September 27, 2018.
  11. COA files lawsuit against federal government to stop sequester cut to cancer drug reimbursement [press release]. Washington, DC: COA; May 31, 2018. sequester-lawsuit/. Accessed September 27, 2018.
  12. Step therapy creates barriers to care for Medicare Advantage beneficiaries with cancer [press release]. Alexandria, VA: ASCO; August 8, 2018. ates-barriers-care-medicare-advantage. Accessed September 28, 2018.
  13. Inserro A. Medical groups tell CMS to stand down from linking reimbursement to paperwork burdens. The American Journal of Managed Care® website. groups-tell-cms-to-stand-down-from-linking-reimbursement-to-paperwork-burdens. Published September 11, 2018. Accessed September 28, 2018.
  14. ASCO. Patient-Centered Oncology Payment. downloads/ASCO_Patient-centered_Oncology_Payment.pdf. Center for Healthcare Quality & Payment Reform website. Published May 2015. Accessed September 28, 2018.
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  16. Community Oncology Alliance announces Oncology Medical Home pilot program launch [press release]. Washington, DC: COA website; May 17, 2016. www.communityoncology. org/2016/05/17/community-oncology-alliance-announc- es-oncology-medical-home-pilot-program-launch/. Accessed September 28, 2018.
  17. Trump administration gives Medicare new tools to negotiate lower drug prices for patients [press release]. Washington, DC: HHS website; August 7, 2018. medicare-new-tools-to-negotiate-lower-drug-prices-for-patients.html. Accessed September 28, 2018.
  18. COA statement on CMS guidance allowing step therapy in Medicare Advantage plans [press release]. Washington, DC: COA website; August 7, 2018. ment-on-cms-guidance-allowing-step-therapy-in-medicare-advantage- plans/. Accessed September 28, 2018.
  19. Inserro A. MEDCAC panel mostly endorses PROs for CAR T therapies.The American Journal of Managed Care® website. medcac-panel-mostly-endorses-pros-for-car-t-therapies. Published August 22, 2018. Accessed September 28, 2018.
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