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?

Persistence Pays Off: A Success Story Worth Discussing

On behalf of a client, we have a great success story to report. One of our oncology clients was having continued denials with a large private pay insurance company. Regarding this particular situation, the oncologist was following AMA coding guidelines, however, the insurance company did not agree. The issue at hand was relative to CPT 96413, used for initial drug infusion, along with CPT 96416, used for chemotherapy administration via IV infusion (when patients are sent home with a pump).

The physicians were doing chemo and charging the administration and chemo fee. The insurance company told them only one charge could be “initial”, and that they would not be able to bill these codes together on the same day for the same patient. This started in October of 2006. They received continued denials. We exhausted the official appeals process for this physician. We then participated in a conference call with the insurance company and their legal department. The results of that call were still negative. We provided them with more information and documentation.

Fast forward a year later. They reversed their decision. We won. The oncologist won. Reimbursements will be made retro to January of 2006. This was a huge win for a solo practitioner. Persistence pays off.

If you have success stories please let us know what they are. We will share them.