Friday, November 21, 2008

Can Our Healthcare System Finally be Fixed?

Our government spends a lot of time trying to fix our healthcare system implementing policies and procedures that don’t work, make things worse, or sometimes standing idle and not doing anything. We know this because we live the effects of their decisions and indecisions every single day.

But, can creating a competition to finally find the answer that fixes our healthcare system be the key? WellPoint, the WellPoint Foundation and the X PRIZE Foundation are teaming up to create a healthcare X PRIZE because they think so. Who better than health care providers, patients, benefits providers, employers, etc. to change what is broken?

Currently, they are seeking participation from all of us to develop the guidelines for the competition which should be revealed early in 2009. This is a great opportunity to not only be heard on the issues we are living day-to-day, but to initiate the changes that we so desperately need and want.

Visit the X PRIZE site and give them your input and opinion for the guidelines and the areas they should be considering when developing this healthcare X PRIZE competition. http://www.xprize.org/future-x-prizes/healthcare-x-prize

Neltner Billing has submitted the key items we think need to be included in this competition.

The competition has great rewards for the team that achieves the X PRIZE goal based on the guidelines that are input. The X PRIZE Foundation will award a minimum of $10 million to the winning team.

Now is our chance – don’t let this opportunity pass - they are finally asking the right people. Take this opportunity to participate in the decision-making process.

Thursday, August 21, 2008

Do Rebates Belong In Healthcare?

Rebates can be a great deal – that is if you’re a retail customer buying a car, a computer or a high-end kitchen gadget. But, if you’re a medical oncologist treating people with serious illnesses, should you have to rely upon rebates to get the best possible price on drugs for your patients? While we love a good deal, we don’t think the practice of rebates belongs in the health care system. In fact, we think they are unfair and are borderline unethical because they can drive physicians to purchase and administer drugs patients may not need. They also, in the end, increase the cost of drugs to the patients.

We think oncologists/hematologists need to put their foot down and fight this issue now.

Here’s an example. If you choose to treat your cancer patients for chemotherapy-induced fatigue with Aranesp, the list price is so high, its counter-rebates and discounts are distorting the real ASP. So, the physician is faced with purchasing the drug 20 % to 35% below his/her reimbursement in anticipation of receiving several rebates and discounts from the distributor and manufacturer - in hopes his/her cost will eventually fall below the Medicare allowable of ASP +6%. The primary problem is the manufacturer list price is making it unaffordable to buy this as a single-source drug. And, Amgen has creatively bundled Aranesp and Neulasta, and physicians must sign a contract requiring them to purchase these drugs together - in order to get the best possible price and the “rebate”. The physicians must also negotiate an additional discount with the distributor.

To make matters worse, effective July 1st, Amgen instituted a price increase on both Aranesp and Neulasta by eliminating the discount with the distributor. When is this going to stop? These issues are making drugs unaffordable, putting patient care at risk and contributing to the exorbitant cost of health care.

What are oncologists, especially small practices and solo practitioners, supposed to do? There are a couple of possible alternatives.

1. write their patients a prescription, and send them off to the pharmacy to purchase their own chemotherapy.
2. send Medicare only and self-pay patients to the hospital.

We think the bundling/rebate practice is unfair and enables drug companies to form monopolies.

For more than 25 years, we’ve successfully represented medical oncologists/hematologists within the private practice, hospital and university settings. Due to the high cost of drugs and the unfair rebate process, several of our small and solo practice clients have been forced to close their doors. Others are currently considering doing the same.

Neltner Billing and Consulting is requesting ASCO to take action on this issue. Physicians should be able to purchase drugs as cheaply as possible in order to provide affordable care to our patients. Stop the rebates. Stop the bundling. Simply focus on getting the cost of the drugs down.

Friday, June 20, 2008

Reimburse Doctors For Their Brains

Ancillary services are causing a major problem in accomplishing health care savings. In fact, it is so bad that many physicians look to joint ventures with hospitals and other entities in order to supplement their income with ancillary revenue. Why? Because “cognitive” services for all physician specialties have gone unrecognized and are not reimbursed. Rather, physicians are compensated for the volume of services rendered as well as ancillary services (i.e., MRI, Pet CT, catheterization and other test ordering).

Why is it that physicians are not paid properly to use their brains and to problem solve for their patients? That is what they trained to do. In my opinion, this is backwards and it’s costing the system a lot of money. Included under the not reimbursed “cognitive services” umbrella are: chronic disease care management, multidisciplinary coordination with other physicians relative to patient care, participation in tumor board conference and cancer committee, pain management while the physician is not present, phone calls related to patient care, pharmacy management, education, etc. While these activities directly relate to patient care and management, they are not currently billable. We think this is wrong.

Specialists are often billing at the same rate as primary care physicians when they should be able to bill a Level IV or Level V for the complex management of their patients. CMS previously tested a model eliminating profits from ancillary services when the Congress passed a bill that reduced ancillary drug payments – from AWP methodology to ASP – then added physician value and extra overhead cost to the new oncology codes. These were adopted by the AMA in 2005. CMS declared success in saving money by this action; however, with the implementation, CMS unfortunately did not add enough physician cognitive value in the new codes. Additionally, CMS continues to audit physicians who document and bill the highest level of visit codes.

We believe the solution to the issue relative to cognitive services is simple. The answer lies with the development of 3 new specific codes (levels VI, VII, VIII) that do not require face-to-face contact to recognize the cognitive services for the care and management of chronically ill patients. These codes could be utilized not only by medical oncologists and hematologists, but by physicians in all specialties when treating their patients. This solution would provide a remedy benefitting the entire health care system and would enable patients to get the quality care they deserve.

Neltner Billing has been trying to solve the cognitive services problem for several years now. We previously proposed treatment planning codes (specific to medical oncology/hematology) to the American Medical Association as a solution, and we were denied. The AMA either needs to embrace those treatment planning codes or adopt the higher level codes mentioned above that all medical specialties can utilize.

We are preparing a white paper to distribute to key congressional representatives and various health care organizations in the next 30 days in order to get our opinion heard on this and other key issues. We really believe that making some fairly basic changes could save the entire health care system money.

Thursday, May 29, 2008

Oncology Reimbursement: Where Have the Drug Profits Gone? Part 2

Where is all the money going? In identifying who is making what profit in the oncology drug distribution system, there are four parts to consider in pricing:

Manufacturer cost: the technological cost to produce, shop, or otherwise bring the drug to market. Their profit margin should be transparent – they know the end user’s profit margin is at a maximum 6%.

Distributor cost: includes acquisition costs, storage costs, and a reasonable profit margin. This margin is 2%, considering their cost is only 1% above the manufacturer cost. ASP (average sales price) does not include this 2% shipping, and distribution cost and this is a permitted cost added on to the ASP.

GPO (group purchase organization) cost: commissioned to help medical oncologists in the community purchase drugs at their lowest possible price. The GPO secures a .25% to .75% discount from the distributor, who would negotiate an even better cost with higher volume. The manufacturer does need to know the demand to appropriately staff and manage production.

Acquisition cost (or Oncologists’ cost): should be ASP less 2% as an industry standard, but in reality, it is typically 4% above ASP.

The Million Dollar Questions
Who is taking the 2% to 4% margin?
Are all these costs necessary?

In the end, the oncologist is suffering from this process. It’s way too complicated.

We would like to hear your thoughts on what process should we engage in to eliminate both the GPO and distributor overhead factors. Simply reply on the “comment” button below. You can provide your name or be totally anonymous. You can also email me (Marty Neltner) at mneltner@earthlink.net.

Monday, May 12, 2008

New Codes May Be the Answer to Evidence Based Medicine

The challenge of oncology is to recognize and establish incentives for the cognitive skills of physicians that will create both cost savings and superior outcomes for both patients and payers.

I recently attended a the world conference on health care titled “Leadership Summit on Evidence Based Medicine” in Alexandria, VA. The major speakers at this meeting were medical directors of insurance companies, think tank experts, Gail Walinsky the prior CMS director and the Institute of Medicine. The overarching conclusion is there is no independent measurement of Evidence Based Medicine. The Institute of Medicine (IOM) issued a compelling report suggesting an independent agency (I thought, “Oh great, another agency to measure nothing”) be established to perform this task. The problem is how to fund it. As you know, private industry, insurance companies and the government are trying to develop this process of Evidence Based Medicine. Everyone agreed whoever funds this will have a difficult task of developing a process that is encumbered by special interest.

As you can guess I was one of few representing the physician interest. I might mention that speaker after speaker referenced the disastrous bone marrow transplant failure brought on by the oncology community. My sense is that this group did not have much respect for what oncology does for its patients on a day-by-day basis. After three days of listening I finally had an opportunity to comment. I am always struggling with what to say to convince those attending there are solutions – if only they would listen to us “privates in the trenches”.

My solution is simple: create level six, seven and eight evaluation and management codes for chronically ill patient care. These codes can be utilized by any physicians in any specialty providing chronic care. This would solve the issue surrounding the failed lobbying for oncology treatment planning codes. Treatment planning never happened (even at our urging with a proposal including detailed documentation) as the AMA RUC Committee has stated oncology treatment planning is recognized in the level five services. The AMA has denied requests for treatment planning at least two times. In my opinion, however, the AMA would accept the argument for level six, seven and eight codes for management of chronic illness. These new codes would reduce health care costs; therefore their value would generate the measurement for Evidence Based Medicine.

The compelling excellent outcome evidence is ever present in oncology care. The problem of course, is the oncology community is not engaged in utilizing the Evaluation and Management coding to prove its worth. Instead, they continue to under code and produce documentation that has no real true measurement. The oncology bell curve unfortunately looks like that of Internal Medicine and Family care. The verbiage in the note is full of ROS and exam points that are negative and without real substance offering data about the current condition of the patient, where we started and the goal of therapy. There is no clear evidence of success and outcome. Yet 99.9% of the patients who pass through the daily offices of thousands of oncology offices tell a different story.

So, the challenge of oncology is to “Change the Wheel” and redirect attention to creating the perfect level five note that will show 70% utilization in every oncology practice. Acquiring this data by year-end will be the calling card to support the need for level six, seven and eight coding that will clearly define the outcome measurement of Evidence Based Medicine. So join the Neltner Marines, board the bus and get ready for “Neltner Billing Level Five Boot Camp”. We’ll be posting more about this training that we will conduct. At the end of this training you will have the tools and the confidence to collect what the GAO says you are entitled to. We believe you will be paid for 50% of your value which will lead you to six, seven and eight codes to complete the cycle.

Friday, April 11, 2008

Oncology Reimbursement: Where Have the Drug Profits Gone?

A physician called me recently and said, “I am mad as heck and I am not taking this anymore.” He is not making 6%, he is making 2%. He believes the drug distributors are taking too much of a margin on the drugs. Another issue that is of major concern is why are the GPO’s owned by the distributors? Is this not a conflict of interest? If you note that when you switch, two white shirts show up at your door. One represents the distributor and the other represents the GPO. How can one impose savings if the physician is paying for two salespersons, two distribution systems? It is apparent we need some transparency in the game of drug purchasing.

I believe it is time for oncologists to demand some transparency and demand a 6% margin on drug purchases. I would think an investigation is needed to identify what margin of profit the distributor takes and what margin of profit the GPO takes. If they are one in the same company then we have a double dip. Instead of simply giving me the best price, the GPO offers many gimmicks and trickery into thinking you are getting the best price.

It is time to eliminate our current drug pricing methodology. Since 2001, our drug distribution system has convinced oncologists that it is okay to accept a 2% margin, or in many cases a 2% negative margin, on the drugs they purchase. Contrary to what should be happening in the industry, drug representatives are still encouraging physicians to use their drug more frequently. And the current drug rebate programs being offered to oncologists (if your volume is high enough) are an abomination that promotes the mentality of “use our drugs and treat like crazy so you get a rebate.” Forget patient care and the best drug for the patient.

Not only are many oncologists tied into the drug distributors and GPO’s for hundreds of thousands of dollars, they are also trapped and are now paying excessive interest for the 75 day hold.

As we consider all this information, it is important to realize that the perception in Congress is that oncologists are still making excess profits on drugs. Where are the needed dollars to provide the excellent care patients demand? Oncologists aren’t seeing them.

Wednesday, March 12, 2008

Today’s Oncology Drug Procurement: Effective or in Crisis?

Is the drug procurement process for the cancer delivery system in crisis or is it working?

In Economics 101, the law of supply and demand suggests that as demand increases, supply should follow and eventually the price should decrease accordingly. The customer expects to receive the best value for the product or services received at the lowest price.

But this “price drop” is not a term frequently used in the healthcare industry, especially when we look at oncology drugs. When a patient finds out that they are diagnosed with cancer, there is no goal to compare prices for the best deal; the goal is to be cured.

The patient has no incentive to focus on finding the best price for the product they were prescribed. The patient’s focus is on improving and recovering. The question is who becomes the advocate for the patient to ensure their best interests are being met? Who asks for the prices of Taxol versus Taxotere, Procrit versus Aranesp, Neupogen versus Neulasta?

Believe it or not, oncologists and insurance companies share a common problem. The drug distribution system is depleting precious financial resources from Medicare. But the solution is not to hurt the drug industry, but to instead cut out the waste of inappropriate costs that are added by the manufacturer to the end product.

This will enable oncologists to avoid the enormous debts that they are incurring today because of the price of drugs. The distributors gain security because the likelihood of Oncologists filing bankruptcy or repudiating their debts is lessened.

Is your oncology practice incurring debt due to the costs of drug procurement?