Oncology buy-and-bill evolving

January 15, 2011

Oncology treatment and benefits are changing. Buy-and-bill, the traditional methodology that had physicians buying chemotherapeutic products, treating in the office, and billing the payer, is going the way of surgery by barbers. But no one is quite sure what will replace the one-time standard of payment.

Key Points

Oncology treatment and benefits are changing. Buy-and-bill, the traditional methodology that had physicians buying chemotherapeutic products, treating in the office, and billing the payer, is going the way of surgery by barbers. But no one is quite sure what will replace the one-time standard of payment.

"We are in the midst of an evolution," said Burt Zweigenhaft, CEO of OncoMed, an oncology pharmacy based in New York. "Physicians who used to make 30% or 40% on oncology drugs are now making 6%. Payers are squeezing reimbursement to cut costs and looking at standardizing treatment guidelines, as they have done in other areas."

He added, "One answer is specialty pharmacy. But specialty pharmacy typically has no experience in oncology. Neither do pharmacy benefit managers. Everything you thought you knew about treatment is turned upside down in oncology."

At least one payor has gotten the message. UnitedHealthcare is rolling out a benefit that sends oncology prescriptions to an oncology specialty pharmacy.

Oncology pharmacy does a better job, said Lee Newcomer, MD, senior vice president of oncology services for UnitedHealthcare.

Compared with results for standard pharmacy services, patients went from 50% to 75% compliance with oncology pharmacists. The total drug-spend increased, but the overall cost of care fell by $19,000 per patient. Oncology pharmacists had a mean of 2.5 contacts per member per month and a median of 10 minutes per contact.

"We think this is better care," Newcomer told Drug Topics. "Asking an ordinary pharmacist to manage these drugs would be like asking your family doc to manage cancer care."

That statement gets no argument from, Paul W. Lofholm, PharmD, FACA, owner of Ross Valley Pharmacy and professor of clinical pharmacy at the University of California, San Francisco. His store is located near a local hospital and an oncology practice, but oncology remains a problem area.

Take Tarceva (erlotinib, Genentech), approved for advanced non-small cell lung cancer and advanced pancreatic cancer. It comes in bottles of 30 tablets, but the typical prescription is for 14. That leaves $1,500 worth of inventory sitting on the shelf, sometimes for months at a time.

Dealing with adjunctive products can be even more complex.

Aprepitant (Emend, Merck) is used for nausea and vomiting associated with chemotherapy. But it can be reimbursed only with dexamethasone and only when the patient has had methotrexate administered in a physician office. All 3 agents have to be billed on the same day and may require prior authorization.

"I can physically dispense at any time, but I have to hold off on the billing until the patient gets chemo," Lofholm said. "Most pharmacists are not trained to deal with that kind of administrative nightmare."

Spreading the costs around

Oral oncology agents are commonly placed on the second tier of pharmacy benefits. Oral agents with a generic equivalent typically go to the more expensive third tier, while generic oncolytics are typically first-tier products. Some plans place oral agents on the basis of price. A more expensive product could land on the third tier even if it has no generic equivalent and is the first-line treatment.

"We are seeing a gradual increase to the patient copay and co-insurance," said Julie Segar, director, managed oncology services, Health Industries Research Companies. "We have not seen an effect on compliance yet, but I don't know what the tipping point will be."

Tweaking the plans

Plans are tweaking oncology benefits in a variety of ways. The Centers for Medicare and Medicaid Services began squeezing physician payments more than a decade ago. Medicare Part D added more complexity. As the number of oral oncolytics grows, more and more patients are seeing their oncology treatment covered as an outpatient benefit, which can drop them into the Part D donut hole with the first cycle of treatment.

"The philosophy is to make people economically indifferent as to how their treatment is covered," said Ira Klein, MD, MBA, FACP, medical director, Oncology Condition Analysis, Aetna.

"That can be complex in practice. Co-insurance payments and out-of-pocket expenses can act as barriers to treatment that patients never encountered under Part B. Patients need to have some skin in the game, but you have to titrate their exposure. You can't just increase out-of-pocket costs and not expect to see changes in behavior."