May 2014, Vol 3, No 3

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The Affordable Care Act: Where Are We Now, What’s the Future?

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The Affordable Care Act (ACA) is in its infancy, but it is already changing oncology practice, said panelists during a roundtable discussion at the 2014 meeting of the National Comprehensive Cancer Network (NCCN). The changing composition of oncology patients, the risk pool of the exchanges, new payment and reimbursement models, acquisition fever, and oncology workforce demands were the real and potential consequences of the ACA discussed during the roundtable.

Forming the panel were moderator Clifford Goodman, PhD, senior vice president and principal, The Lewin Group, Falls Church, and panel members:

  • Christian G. Downs, JD, MHA, executive director, Association of Community Cancer Centers
  • Liz Fowler, PhD, JD, vice president, Global Health Policy, Johnson & Johnson
  • Michael Kolodziej, MD, national medical director of oncology strategy, Aetna
  • Lee H. Newcomer, MD, MHA, senior vice president, UnitedHealthcare
  • Mohammed S. Ogaily, MD, president, Michigan Society of Hematology and Oncology; clinical assistant professor, Michigan State
  • University, East Lansing; medical director, Oakwood Center for Hematology and Oncology – Downriver
  • W. Thomas Purcell, MD, MBA, associate director for clinical services, University of Colorado Cancer Center, Denver; executive medical director, Oncology Services, University of Colorado Hospital
  • John C. Winkelmann, MD, private practice physician, Oncology Hematology Care, Cincinnati

Since the rollout of the ACA, the composition of cancer patients hasn’t changed from the perspective of risk, said Purcell, but many patients covered by commercial insurance are for the first time participating in a narrow network. In addition, many patients who qualify for Medicaid and those selecting Bronze ACA plans have large co-pays and more out-of-pocket expenses than they did previously, and managing these expenses will be challenging.

The narrowing of networks has also had the consequence of interrupting continuity of care for some patients. “We’re getting situations in which patients are unable to come to us because they’re in a particular narrow network that we don’t cover,” he said.

Patients with rare or complex cancers best managed by an academic medical system that delivers multidisciplinary care may therefore not receive optimal care if the academic medical center is outside the patient’s narrow network, he said, “unless he pays out of pocket or we make an exception to treat him and cover the cost.”

Patients with immediate needs for care that could not be addressed previously are presenting at his clinic, said Ogaily. “Certainly, some [patients] are more complex because of the time that they have lacked coverage and did not seek medical care,” he said.

Risk Pool Uncertainty
In this early stage of the ACA, the risk pool is uncertain, creating a quandary for insurers, the panelists agreed. Because enrollment in ACA by younger persons is lagging, insurers may have insufficient data to make premium bids for next year, said Fowler.

“If the risk pool stays risky, does the thing fall apart?” asked Goodman.

Certain adjustments, such as a temporary reinsurance program, a temporary risk corridor program, and a permanent risk adjustment program may be necessary, said Fowler.

Other adjustments to the ACA, such as delaying the individual mandate, have been expensive to insurers as they continually reprogram their systems to comply with new regulations. Said Newcomer, “It has been an extremely expensive product to roll out. It takes a lot of our time, energy, and resources to keep making all of the changes that occur. It takes money away from other innovative programs.”

“One of the things that you’re starting to see is provider networks looking at doing things like accountable care organizations [ACOs], oncology medical homes, and broad medical homes,” said Downs. “I do worry a little bit though about providers going in risk, because that’s very difficult to manage, and it’s not necessarily their area of expertise. There is some concern about providers going too quickly into models they don’t fully understand.”

In Michigan, while ACOs are sprouting, the enthusiasm for oncology medical homes has not been robust, said Ogaily.

More Integrated Networks
The new payment and reimbursement models with a shared savings environment will favor independent or group practitioners who have established relationships with payers, while putting at risk the practices that aren’t well integrated, said Downs. Acquisitions of oncology group practices and hospital mergers may be the new norm, a trend that started with the Medicare Modernization Act, he said.

“The concept of an integrated network becomes very important,” he said, noting the large number of disciplines involved in cancer care. The ACA may facilitate integration with its mandates for quality care measures and reporting requirements.
Razor-thin margins due to lower government reimbursement for oncology treatments are expediting hospital acquisition of physician practices, which are finding it difficult to survive on these low margins, said Newcomer. The consequence is an increase in prices as hospitals use their expanded leverage to negotiate fees. “We’re seeing as much as a 10-fold increase in the price of a drug if a community practice is acquired by a hospital or facility,” he said. “That’s 10-fold on drugs that are not cheap in the first place. The patients pay for that with their co-payments and deductibles…and we also have to raise premiums to cover it.”

“One of the consequences of healthcare reform stimulated by the ACA is the requirement that, irrespective of site of service, you become sensitive to your price point and sensitive to quality metrics because network management is part of the strategy,” said Kolodziej.

The rapid rate of consolidation has resulted in less opportunity to negotiate appropriate site-of-service payment rates (ie, site-of-service differential), he added. The cost differential between a community practice and a large hospital system may not reflect differences in services but “winds up being a contracting issue,” he said.

Even though the site of care, the services, and the patients may not change when a hospital system acquires a community oncology practice, “the fee schedules convert to the hospital’s negotiated fee schedule, which would be typically higher than we can get in community physician-based clinics,” said Newcomer.

The high rate of acquisition of community practices also runs the risk of leaving remote areas not adequately covered because larger hospital systems tend to focus on large metropolitan areas, said Ogaily. Traditionally, small community practices have been able to provide and extend coverage to remote areas.

Healthcare Demand and the Oncology Workforce
The potential effect of a backlog of patient demand created by the ACA on the hematology and oncology workforce needed to meet this demand was raised by Goodman. When added to the demographic shift in the population, patient volumes may exceed the capability of the supply of hematologists and oncologists, necessitating increased use of physician extenders, said Winkelmann. Unfortunately, other specialties are scrambling to add physician extenders as well, creating competition for their services.

“We’ve got to start over and figure out how we can meet the needs of this large group of cancer patients coming forward into the system. That means a whole different way of approaching,” said Newcomer. Physicians may be the ones directing the care and devising treatment plans, with extenders administering treatments. The physician might then only be involved in the case of toxicity.

“If we rethink it, we can solve the problem, but it needs changing the financing and needs changing how we work with all of our other ancillary providers that care for cancer patients,” he said. “It can be done, but we’ll have to be innovative, and that’s the reason that all of us are toying with new ways of paying for cancer care. Whether it be episodes, bundles, or capitation, we’re trying to find a way to realign the incentives to help physicians and hospital communities restructure how they deliver that care. The quicker we can get to that, the better off we’ll all be.”

Provisions under the ACA were geared toward moving providers from a fee-for-service system that warrants volume to one that values outcomes and quality instead, said Fowler. “It’s rough transition, particularly for providers that weren’t prepared or didn’t have the technology in place to do this,” she said.

Thirty percent of reimbursement incentives are based on patient satisfaction, she continued. “When you are thinking about what you need to do to meet the quality measures, you’ve got to start thinking about what matters to patients. That might be where survivorship and other issues come into play.”

ACA Shortcomings
When asked where the ACA falls short, Newcomer mentioned the medical necessity clauses that prohibit taking cost into consideration when balancing treatment options that deliver equal outcomes.

“You have in any NCCN guideline multiple options for adjuvant breast cancer therapy or the treatment of non–small cell lung cancer. Some of them are far less expensive than others, but they have the same end results and often may have the same toxicities. In those scenarios, we should be thinking about using lower-cost alternatives,” he said. “We’re not allowed to do that in Medicare or the ACA.”

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