Where Does the Money Go?

In response to the comment on our post “Considering Solutions for Oncology Drug Purchasing”, we agree and that is why we are pushing into new directions in this area. The key ingredient we need is for small groups to band together to arrive at a critical mass to break up this price fixing between the distributors. Medical Oncologists were supposed to be able to purchase drugs at ASP and it's not the case. Right or wrong, our government says it is our responsibility to find the solution. With that said, we have three goals:

Goal 1: Attempt to find a way to purchase drugs at ASP,

Goal 2: If that fails, accumulate the data and visit CMS with specific information,

Goal 3: If CMS and government fail to act on the data we accumulate, then we collectively take legal action to prove that price fixing is occurring in the market.

These are the choices in a free market system. Call us and join our effort.

Reality is in the Results, and It is No Surprise

In our previous post, “Considering Solutions for Oncology Drug Purchasing”, we asked for you to fill out our short “worksheet” in the News area of our website. We had several responses from oncology/hematology practices, comparing what they are paying to the Medicare allowable. No surprise: most physicians are paying way too much. We have posted these current results on our Neltner Billing website, and will update this as we get more data from hematologists/oncologists across the country.

Now that you see the data, is it reality or myth that:

• Oncologists cannot purchase drugs at ASP or lower.
• Oncologists have been misled by industry representatives that oncologists are purchasing drugs at or below ASP.

The answer is reality, and you are proving it in your numbers. The table shows that most payments are red and blue. Red numbers denote payments of ASP+6% or higher; blue numbers denote payments between ASP and ASP+6%. There are few numbers in black which actually fall below ASP.

Thank you for the responses we have received so far and please keep them coming. It is clear from what we have collected so far, that ASP is flawed. The more data we can collect, the stronger we will be in lobbying for change. The data, the reality, cannot be ignored.

If any of you would be interested in attending pre-scheduled airport meetings, please comment back to us as we have considered this as a venue to discuss the ASP issue together in person.

Myths and Realities in Oncology Drug Purchasing

The price of oncology drugs is sky rocketing and reimbursement for them has continued to fall. This may be hurting your practice more than you know. What are you paying for your drugs as compared to the Average Sales Price (ASP)? Do you know the Medicare allowable for these drugs? If you cannot answer these questions, what you don't know may be hurting you.

What person would enter into a business where:
· 85% of his/her product has a margin less than 2%?
· The cost of the product is paid in not less than 90 days?
· The product purchase price requires a huge cost of labor to support the product and has a bad debt of not less than 5%?

Probably no one. Now, let’s take a quiz.

Reality or Myth:
· Oncologists cannot purchase drugs at ASP or lower.
· Oncologists have been misled by industry representatives that oncologists are purchasing drugs at or below ASP.
· Many oncologists are now faced with hundreds of thousands of dollars in debt using the “buy now and pay later” leverage.

If you answered “myth” once and reality twice, you are in the same boat as many of your colleagues. The unfair practices occurring in oncology drug purchasing are putting small private practice oncology groups out of business as we speak. Within our client base, we are finding that several small oncology/ hematology practices and solo practitioners are ending up in the red relative to the purchase of their oncology drugs.

At the helm of a Midwest billing and consulting firm that works with many oncology practices, I intend to continue to investigate what is happening here.

Smaller practices and solo practitioners don't have the purchasing power of larger practices. Therefore, they pay higher drug prices. That does not seem fair. The Medicare allowable for these drugs is ASP plus 6%. Medicare's payment is 80% of their allowable. While this may seem to come out in your favor, many times it does not and you end up paying for your patients' drugs.

There is a difference between purchasing drugs at ASP and at ASP + 4%, 5% or higher. Many oncologists think they are purchasing drugs below ASP, when in fact, they are purchasing drugs at ASP + 6% or 7%. Yes, there is a difference. Calculate your complete numbers and see what you are really paying. Don’t rely on certain drugs with their rebates that come later.

The free enterprise system suggests you, the oncologists, must figure out the process to purchase your drugs at ASP. Is that your job? The perfect world would be when every oncology practice can buy at ASP – because no one would be offering a drug cost below ASP. We’d all be on a level playing field.

So now that we have identified the problem, what is the solution? Share your thoughts by clicking the comment button below.