Barry Russo Discusses How CMS and HHS Regulatory Changes Are Affecting Practices

With all the regulatory changes that CMS and HHS are rolling out, community oncology practices are facing significant changes in how they take care of patients, said Barry Russo, chief executive officer of The Center for Cancer and Blood Disorders.

Transcript

CMS, and HHS more broadly, have multiple regulatory changes in motion that are affecting cancer care. Which ones are most important to your practice and how are you responding to them?

Currently, obviously [the Oncology Care Model] is the biggest change that we’ve had to deal with which has created a significant change for us in process in the way we take care of patients and the way that we look at the total cost of care and all of that. What’s coming in the future is bundled payments for radiation, and we’re really going to have to learn and understand the financial risk associated with bundled payments and the complexity of understanding all the pieces of what should go in the bundled payment documentation requirements associated with that and again the actuarial risk and potentially even having to look at reinsurance to support us through a bundled payment structure until we understand it better in the future.

The other item that CMS is really looking at is drug pricing and either potentially reducing our ASP [average sales price] structure or going to the sort of IPI [International Pricing Index] model where they’re looking at drug pricing internationally. And we have no idea what the IPI model may mean and the way we buy drugs and the pricing of drugs and then ultimately the reimbursement for drugs. But it’s clear if ASP drops, at least the reimbursement structure, as potentially one of their proposals we’re airing out there, that we’re really going to feel that financially.

Most, if not all, of our Medicare business is really barely covering the cost of the drug, especially if the patient doesn’t have a supplement or a secondary insurance and we have quite a population of patients that do not have Medicare secondary insurances. We have a lot of Medicare-only patients and they have large out-of-pockets with drug costs and, given that many of them don’t pay those out of pocket, that’s all below cost. We’re actually paying more for the drug than we’re getting paid to administer it, and if the ASP structure goes down even further, we’re going to be even more challenged on that front, as well as our many practices across the country associated with that.

From an IPI standpoint we have no idea what that mean, we really don’t. It sort of sounds good, but we’re not sure what the roll-down effect of that at the community practice level is going to be.