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.

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.

Reimbursement of Administering Chemotherapy is at a Low Level

Unfortunately, professional services for medical oncologists and hematologists administering chemotherapy and other infusables are getting reimbursed at a low level.

Oncology infusion codes are still using technical descriptors based on 1985 to 1989 CPT codes, which present their descriptors as a “nurse only” type of service. This does not take into account the knowledge, years of training and experience the physician has. We believe the infusion codes must take this into consideration.

Radiation oncology has treatment planning codes, and medical oncology should as well. Or even better yet, the capability to bill level six, seven and eight codes.

Are you receiving the reimbursement needed to take care of your patients, much less just cover your costs of chemotherapy? What are you experiencing? Share your comments with us. We would like to know.