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Managed Care Updates

Evidence-Based OncologyOctober 2018
Volume 24
Issue 11

ASCO: Proposed Medicare Payment Changes Could Hurt Quality Cancer Care

A new rule in the Medicare Access and CHIP Reauthorization Act’s 2019 Quality Payment Program (QPP) and the proposed 2019 Medicare Physician Fee Schedule (MPFS) could negatively affect the quality of cancer care for Medicare beneficiaries, according to the American Society of Clinical Oncology (ASCO).

In order to address its concerns, ASCO sent a letter1 to the US House of Rep- resentatives Energy and Commerce Committee. In it, ASCO President Monica M. Bertagnolli, MD, FACS, FASCO, explained how the changes could limit the ability of high-performing providers to receive bonuses. She wrote that the changes raise “several questions about how oncology practices will be able to continue to provide the highest quality care for Medicare beneficiaries.”

The proposed QPP rule increases the weight for the cost category under the Merit-based Incentive Payment System (MIPS) from 10% to 15%, without an updated methodology. ASCO is calling for a risk adjustment that accounts for the severity and variation of high-cost therapies when treating patients with cancer, Bertagnolli explained.

The MPFS is proposing a 4% cut in reimbursement for oncology services, a decrease in reimbursement for new Part B drugs, and an overhaul of evaluation and management coding that “does not reflect accurately services and resourc- es practices deliver to complex patients,” she wrote.

She goes on to explain that the reimbursement cut could mean oncology practices reduce some of the unpaid or underpaid services they provide to patients with cancer. “ASCO opposes the cuts in the proposed MPFS and believes they will harm Medicare beneficiaries with cancer, impede MIPS implementation, and risk access to appropriate anti-cancer therapies.”

The end result of these proposals would be that the best performers would only receive a 2% bonus, rather than the 4% bonus authorized by law. Even if they met all necessary quality improvement and value requirements, providers and practices would see a decrease in their overall reimbursement for 2019.

The comment period on the proposed QPP ended on September 30, 2018. The comment period on the MPFS ended on September 10, 2018.


As MACRA heads toward third year, Congress urged to consider how proposed CMS changes will impact Medicare beneficiaries with cancer. American Society of Clinical Oncology website. asco.org/advocacy-policy/asco-in-action/macra-heads-toward-third-year-congress-urged-consider-how-proposed. Published July 31, 2018. Accessed August 12, 2018.

CMS Will Allow Medicare Advantage Plans to Use Step Therapy to Negotiate Drug Prices

The Trump administration is allowing Medicare Advantage (MA) plans to negotiate prices for Part B drugs by providing them the opportunity to create plans that use step therapy.

During a press call, CMS Administrator Seema Verma explained that this new tool will bring down the cost of drugs for America’s seniors. She pitched the plan as giving patients the option to choose a plan that has them try more cost-effective drugs first before moving onto more expensive drugs. She gave the example that the plan would ensure a patient starts with a more cost-effec- tive biosimilar before going on to a more costly biologic, if necessary.

“By allowing Medicare Advantage plans to negotiate for physician-adminis- tered drugs, like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use,” HHS Secretary Alex Azar said in a statement.1

Dan Best, senior adviser to Azar for drug pricing reform, explained that MA Part B drugs represented about $11.9 billion in spending in 2017. The administration does not expect all plans will use these tools, therefore savings would be similar to what the private sector sees for utilizing step therapy: between 15% and 20%, on average. MA plans that implement step therapy will be able to use the tool to negotiate better prices for more expensive treatments, and CMS will allow these plans to negotiate Part B drug prices against competitors in Part D. MA currently covers 33% of all Medicare beneficiaries.

“Step therapy has the potential to lower drug spending and beneficiary costs,” said AARP in a statement to The American Journal of Managed Care®. “However, any implementation of this proposal must include robust consumer protections, including extensive beneficiary education and outreach and meaningful improvements to existing exceptions and appeals processes. It’s also noteworthy that any savings would be substantially larger if the secretary were granted the authority to negotiate on behalf of all of Medicare.”

Step therapy is not uncommon in private-sector plans, and physicians will be familiar with these policies, Verma said. “It’s unique that Medicare Advantage has not used this,” she added.

Step therapy in MA plans can only be applied to new prescriptions, Verma explained, so patients who choose one of these plans will not have medications they are actively receiving be affected by the policy. However, some in the healthcare industry believe that step therapy, also known as fail first, can have a negative impact on patients. The Community Oncology Alliance (COA) called step therapy “dangerous” for patients with cancer. Step therapy would require patients to try cheaper, and usually older, treatments before they can try novel therapies that are more expensive.

According to COA, step therapy can also delay delivery of care and leave patients facing a life-threatening disease without access to the most immediate and life-saving treatments. “Cancer treatment is becoming more personalized, and not all therapies produce the identical result from patient to patient. Having therapy options is imperative to successful treatment,” Jeff Vacirca, MD, FACP, president of COA and CEO of New York Cancer and Blood Specialists, said in a statement.2 “CMS’ action is the antithesis of where personalized cancer treatment is going. It’s old-school cookbook medicine that treats every patient as one-size-fits-all. It’s telling me to effectively sit back and let some middle- man make treatment decisions for my patients.”

The savings that plans accrue through these plans will largely need to be passed on to patients, according to Verma. Patients will see these savings through lower coinsurance and rewards programs, such as gift cards to patients.

“Does CMS truly believe that Medicare seniors will be enticed away from their physician-recommended treatment with the promise of a $50 Amazon giftcard?” asked Ted Okon, executive director of COA. “Allowing middlemen to profit off denying cancer patients needed medications is immoral and cruel.”

Since MA plans can start offering plans with step therapy in 2019, patients might also see savings returned to them through lower premiums in 2020. MA plans that use step therapy will also be required to provide care coordination services that include discussing medication options with beneficiaries, providing beneficiaries with educational material and information about their medications, and implementing adherence strategies to their medication regimen.

“We look forward to seeing the results of this step toward tougher negotiation within Medicare and will continue efforts to expand negotiation tools throughout our programs,” Azar said.


1. Trump administration gives Medicare new tools to negotiate lower drug prices for patients [press release]. Washington, DC: HHS; August 7, 2018. hhs.gov/about/news/2018/08/07/trump-administration-gives-medicare-new-tools-to-negotiate-lower-drug-prices-for-patients.html. Accessed August 8, 2018.

2. Community Oncology Alliance statement on CMS guidance allowing step therapy in Medicare Advantage plans [press release]. Washington, DC: COA; August 7, 2018. globenewswire.com/news-re- lease/2018/08/08/1548598/0/en/Community-Oncology-Alliance-Statement-on-CMS-Guidance-Allo- wing-Step-Therapy-in-Medicare-Advantage-Plans.html. Accessed August 8, 2018.

Cancer Types Can Affect How Well Providers May Perform Under OCM

The type of cancer a provider treats can determine how well he or she performs under the Oncology Care Model (OCM), according to research from Avalere Health that was presented1 at the American Society of Clinical Oncology Quality Care Symposium.

The Avalere researchers constructed and analyzed OCM episodes using Medicare Part A/B fee-for-service claims and Part D prescription drug event data. They then compared the average actual Medicare costs with the OCM predicted costs for each of the 21 types of cancer included in the OCM.

First, they found that 62% of the cancer episodes occurring during the OCM baseline period were either breast or prostate cancer. Although the average and predicted OCM episode for the baseline period was $20,900 across all cancer types, the average and predicted costs varied for individual cancer types. For instance, actual costs were an average 8% higher than predicted in lung and liver cancer episodes. Meanwhile, the actual costs for bladder and female genitourinary cancers other than ovarian were 5% lower on average compared with the predicted costs.

“As the shift toward value-based care continues, it is important to evaluate how new payment models, like the Oncology Care Model, may affect physicians and patients,” Richard Kane, senior director at Avalere, said in a statement.2 “Our research suggests that clinicians who treat certain cancer types may perform better under the Oncology Care Model.”

Performance on quality scores also varied by cancer type, with acute leukemia and head-and- neck cancers performing worse; none of the possible quality points were achieved. However, in bladder cancers, 92% of the possible quality points were achieved, on average. According to the research, 8 cancer types that account for 80% of OCM episodes achieved, on average, more than 50% of possible quality points. In comparison, the 11 cancer types that account for just 20% of OCM episodes achieved, on average, less than 50% of possible quality points.

Overall, the Avalere researchers determined that the “ability of a participant to succeed in the OCM can vary depending on the types of cancers treated by the practice.”

“Cancer episodes for which actual costs are greater than predicted costs and for which quality scores are low will adversely affect a participant’s ability to earn performance-based payments,” said Matt Brow, president of Avalere. “Identifying these types of challenges are essential to ensuring the Oncology Care Model succeeds in rewarding efficient and high-quality care.”

Previously, Avalere found3 that participation in the OCM may transform care more quickly for certain types of cancers, as participating doctors treat some types more than others. For instance, breast and lung cancers were the most common types of cancers treated by doctors in the OCM.


1. Shenolikar R, Ryan K, Shand B, Kane R. Costs of care in the oncology care model and implications for performance-based payments: consid- erations for oncology practices. Presented at: the American Society of Clinical Oncology’s Quality Care Symposium; September 28-29, 2018; Phoenix, AZ. go.avalere.com/acton/attachment/12909/f-058b/1/-/-/-/-/ ASCO%20Poster.pdf?nc=0&ao_optin=1.

2. Kane R, Brow M. Provider performance under oncology care model varies by cancer type [press release]. Washington, DC: Avalere Health; October 1, 2018. avalere.com/expertise/life-sciences/insights/provid- er-performance-under-oncology-care-model-varies-by-cancer-type. Accessed October 5, 2018.

3. Joszt L. Participation in OCM may transform care for certain cancer types more quickly than others. AJMC.com. June 20, 2018. ajmc.com/ newsroom/participation-in-ocm-may-transform-care-for-certain- cancer-types-more-quickly-than-others. Accessed October 5, 2018.

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