ACCC views 2008 as a year of economic challenges

February 1, 2008

Since the passage of the Medicare Modernization Act of 2003, community cancer centers around the country have been struggling to balance the delivery of optimum care with an ever-tightening reimbursement climate. Cancer Care & Economics (CC&E) talked with the Association of Community Cancer Centers (ACCC) Manager of Provider Economics & Public Policy, Matthew Farber, MA, about the challenges of the upcoming year.

Since the passage of the Medicare Modernization Act of 2003, community cancer centers around the country have been struggling to balance the delivery of optimum care with an ever-tightening reimbursement climate. Cancer Care & Economics (CC&E) talked with the Association of Community Cancer Centers (ACCC) Manager of Provider Economics & Public Policy, Matthew Farber, MA, about the challenges of the upcoming year.

CC&E: Are there any changes in ACCC leadership for 2008?

MR. FARBER: Yes, at our annual meeting in April, Ernest R. Anderson, Jr., MS, RPh, will assume the ACCC office of president. Mr. Anderson is nationally acknowledged for excellence in healthcare and management during his 30 years of pharmacy practice. He will bring a deep understanding of oncology pharmacy issues to ACCC during a very challenging time. Mr. Anderson has twice been recognized as Pharmacist of the Year from the Massachusetts Society of Health-System Pharmacists.

CC&E: Is there a major reimbursement issue that ACCC is looking at for 2008?

MR. FARBER: On the hospital side, despite recommendations from the Ambulatory Payment Classification (APC) Panel, ACCC, and other key stakeholders, CMS [Centers for Medicare & Medicaid Services] lowered payment for separately paid drugs without pass-through status to ASP [average sales price] + 5%.

CMS believes that adequate payment for drugs is ASP+3%; however, in 2008, CMS will provide a "transition" year with payment at ASP+5%. We're working with CMS and legislators on Capitol Hill to raise the volume on this issue in the hope that we can get back to at least ASP+6%. We really believe that there should be reimbursement parity between the hospital outpatient and the physician-office setting. This is a major concern for us.

CC&E: Is pharmacy overhead on the hospital side another challenge?

MR. FARBER: Absolutely. ACCC and other key stakeholders proposed a three-phase plan for reporting pharmacy overhead costs that had the backing of quite a few influential groups. We presented our proposal to the APC panel, and they agreed with us, but unfortunately CMS did not.

The good news is that CMS did make a compromise in that hospitals won't have to deduct pharmacy overhead costs from drug acquisition costs on Medicare claims under the outpatient prospective payment system for 2008, and they won't have to report overhead charges as a separate billing line item.

However, there are data out there showing that there is a substantial amount of pharmacy overhead and handling costs that are being under-reimbursed. So this issue is certainly going to remain on our radar screen.

CC&E: Physician payment is another point of contention. Anything positive to report from that side?

MR. FARBER: We were certainly happy that Congress pulled back the 10% cut for physicians and replaced it with a 0.5% increase; however, the increase is slated for just 6 months so we're going to have to revisit this problem in June or July.

Naturally, our concern is that this is just a temporary fix, and pushing for a long-term solution during an election year is all the more challenging.

It seems like every time they do these Band-Aid fixes, it results in larger cuts the following year. So that's one of the reasons we continue to support a permanent solution to the SGR [sustainable growth rate] problem.

CC&E: Is there something from the Hill on the positive side to report from ACCC's perspective?

MR. FARBER: Actually, we were pleased that Congress included in the new Medicare legislation passed by the House and Senate a section that extends the 2007 reimbursement methodology for therapeutic radiopharmaceuticals to June 2008. We had asked our members to weigh in on this before we spoke to CMS.

Surprisingly, this issue received quite a bit of coverage, not only in the oncology press but also in the mainstream media. Once again, it's an interim fix, but hopefully it will give drug manufacturers and CMS time to seek a permanent reimbursement procedure that more accurately reflects hospital costs associated with the therapy.

CC&E: Any closing thoughts?

MR. FARBER: The cancer community is facing considerable challenges in the new economic environment, and it's very important to stay informed and active. There are a host of issues that might, if left unchecked, directly impact the financial health of our cancer care providers.

For instance, we conducted a survey using 12 common cancer therapies. Under the CMS proposed rule of ASP+5%, adding pharmacy overhead into the equation, we found that upward of 60% of the respondents were going to be underwater on these 12 drugs.

You can't ask hospitals to take losses on reimbursement and expect them to deliver the kind of cancer care our patients deserve.

ACCC plans to keep these issues at the forefront of our work on the Hill.