Facts Are Stubborn Things: The Medicare Part B Experiment, a Patient Advocate's Perspective (Part I)

“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.” ~John Adams, from The Portable John Adams

As a young adult cancer survivor, an active cancer research advocate, and an American citizen, I’ve become increasingly concerned as I watch our country slide deeper into contentious, complex, and combative debates about healthcare access, coverage, and cost. When CMS recently announced a plan to test new payment models for Medicare Part B prescription drugs in an attempt to lower costs, this served to further fan the flames for many, including myself, where my alarm grew on 2 important fronts:

1. The proposed “demonstration project” to randomize the amount paid for Part B prescription medications to the clinicians administering these drugs based on zip codes, and to track drug usage patterns and costs, yet not to assess patient benefit
2. The reaction to CMS’ proposed approaches to “value-based” pricing, where cost varies for a particular drug based on its different levels of clinical effectiveness for different disease indications

Both areas have generated a tremendous amount of controversy—with many clinician organizations, hospitals, and patient advocacy groups expressing adamant opposition to the CMS initiative overall. I share this deep concern regarding the first part of the proposal. Today, when Part B drugs are administered for patients, CMS typically pays providers the Average Sales Price (“ASP”) plus a 6% add-on. But with this proposed demonstration project, CMS will geographically randomize clinicians, testing whether decreasing the add-on payment to 2.5% plus a flat fee of $16.80 per drug per day impacts prescribing incentives and clinicians’ prescribing patterns. In contrast, as noted above, my concern regarding the value-based portion of the proposal is the reaction to that proposal. Although this may seem contradictory, the basis of my concern is actually the same: the level of transparency and evidence that underlie both.

An Experiment to Reduce Costs

Let me begin with the proposed change to the ASP payments to those providers who are treating patients with prescription Part B medications in the clinic, including infused oncology drugs. My misgivings are many, including that:

• The purpose of this non-voluntary demonstration project—which is more accurately termed a mandatory, real-world experiment—appears to be tracking drug utilization patterns and focusing on decreasing Medicare costs only, rather than on assessing patient benefit and quality of care.
• Importantly, in addition to the ASP payment change described above, these payments would be further reduced by the mandatory 2% sequester cut to Part B drugs based on current law. Yet nowhere is this further 2% reduction discussed in the Federal Register’s announcement of this proposed rule. (The Federal Register is described as “The Daily Journal of the United States Government.”) This noteworthy omission demonstrates a tremendous lack of transparency, resulting in what could be termed a misrepresentation of the true reduction in reimbursement rates that physicians will receive for Part B drugs.
• This CMS experiment may well prevent an increasing number of community-based oncologists from being able to provide optimal cancer care based on their expert clinical judgment—through potentially reduced use of certain drugs that may be most appropriate and effective for specific patients, increased closure of community oncology practices or their consolidation with larger healthcare systems, and increased transition of patient treatment to much costlier hospital settings (which in turn may lead to reduced access and treatment disparities).
• CMS apparently developed this proposal without seeking any direct input from critical stakeholders, including clinicians, clinician groups, patients, and patient organizations, and without providing them (i.e., us) with any knowledge of this experiment—again demonstrating a breathtaking lack of transparency.

Further, this portion of the proposal does not appear to be based on any evidence. Rather, CMS is making a troubling assumption that oncologists and other clinicians are basing drug treatment decisions solely on financial incentives—rather than selecting the optimal treatment for each individual patient based on the clinical evidence. Many cancer groups that are opposed to the proposal appropriately argue that no data exist to support CMS’ assumption that changing their payment schema would reduce costs or enhance care. In its March 8, 2016, edition, The Cancer Letter notes the results from a voluntary UnitedHealthcare project with 5 community oncology practices, where removing financial chemotherapy drug incentives actually proved the opposite to CMS’ assumption. When compared with a national fee-for-service payer registry, when the cost difference was analyzed before and after introduction of the payment change, eliminating the chemotherapy drug incentives actually increased the use of chemotherapy. Further, the predicted fee-for-service cost of the cohort based on the registry was projected to be $98.1 million, whereas the total cost was almost a third lower at $64.8 million.

As the paper concluded, “Modifying the current fee-for-service payment system for cancer therapy with feedback data and financial incentives that reward outcomes and cost efficiency resulted in a significant total cost reduction.” (The emphasis is mine.) Importantly, such savings were generated without impacting quality and without any measureable impact on toxicity.

Despite the fact that the CMS project references “value-based pricing” in the second part of the proposal, the crux of the problem with the ASP portion is that CMS does not appear to include value and quality of care as endpoints, did not engage critical stakeholders in the development of the proposal, and is focusing solely on drug utilization and associated costs.

In Part II of this article, Ms Madden will discuss her concerns from her perspective as a patient advocate regarding the reactions of many stakeholders to the value-based pricing proposed in the CMS Part B Drug Payment Model.