BMT Programs in the Managed Care Era

WASHINGTON--Although once a "very profitable program" for cancer centers, bone marrow transplants now present major financial challenges and risks in today’s managed care environment, said Patricia J. Goldsmith, vice president for Managed Care and Business Development, H. Lee Moffitt Cancer Center and Research Institute, Tampa.

Speaking at a seminar on negotiating contracts in oncology, Ms. Goldsmith noted, however, that with careful contract negotiation and management, Moffitt has succeeded in keeping costs and risk under control while maintaining high quality in the more than 180 transplants it performs each year, many for breast cancer. To date, most of Moffitt’s transplants have been autologous, but Ms. Goldsmith sees growing emphasis on the more costly allogeneic transplants.

Key to a successful BMT program are managed care contracts that realistically reflect the cost requirements and extreme variability of providing excellent treatment, she said. At Moffitt, a 162-bed facility that is Florida’s only NCI-designated cancer center, the key to negotiating such contracts has been a clear understanding of the cancer center’s costs for BMT procedures and care, and an active collaboration between physicians and the hospital in controlling expenditures and sharing risk.

In negotiations with smaller, local payers, Moffitt found that few of these companies, which ordinarily deal with full-service community hospitals, understood very much about BMT or the unique requirements and particular advantages of sending patients to a major regional cancer center.

In dealings with large, national payers, on the other hand, Moffitt has found them to be highly sophisticated in the intricacies of both financing and transplantation, and eager to refer large numbers of BMT patients to a small number of nationally recognized centers.

"This was an incredibly profitable product" in the days when payers reimbursed according to a percentage of charges, Ms. Goldsmith said. But with more payers now demanding global contracts, reimbursement is rapidly falling. To maintain a high-quality BMT program, a hospital "has to accept the reality that profits will shrink," she said.

Key Payments to Transplant Stage

In analyzing the cost structure of BMT, Moffitt strives to develop a case rate that recognizes and pays for each of the four stages of transplant care, as well as for various types of procedures and expected complications. Ms. Goldsmith emphasized the importance of keying payment to each stage of treatment, as the entire BMT process can stretch over a year or more, and long waits for payment can become very costly for the hospital.

• Stage I involves the evaluation of the patient and includes vital organ studies to assess the patient’s eligibility for high-dose chemotherapy; restaging of the cancer; and, for "allos," donor typing and matching, she said. BMT contracts should exclude standard treatment of the patient’s disease as well as outpatient medications and marrow registry fees. The excluded costs should be covered under standard contracts.

• Stage II, harvest and pretransplant care, includes priming chemotherapy and stem cell collection, processing and preservation for "autos," and surveillance of "allos" to monitor the patient’s continuing eligibility, she noted. BMT contracts should again exclude standard disease treatment, outpatient medications, and treatment for sepsis or neutropenia after chemotherapy.

• During stage III, the transplant event, length of hospital stay can vary considerably among patients, Ms. Goldsmith noted. This stage also includes harvest of donor cells. With all hospital and physician services covered by a managed care contract, this stage can involve considerable risk for the hospital, she said.

• In stage IV, post-transplant care, outcomes can be extremely variable. Ms. Goldsmith emphasized that treatment for complications, administration of blood products, dialysis, and laboratory and pharmacy expenses are excluded from Moffitt’s BMT contract, and covered under standard contracts because "we are not an insurance company and cannot bear the entire risk of this very unpredictable period."

Some payers ask that the cancer center take total risk for a year, but Moffitt refuses these contracts and believes that all transplant centers should do likewise. "We harm one another when we accept such offers," she says.

Other factors that must be considered in negotiating a BMT contract include housing, especially for patients who have traveled to Moffitt from homes in other places. Many payers "prefer to remain fairly ambiguous about this," she said, but Moffitt tries to build use of an apartment into the case rate, and finds that arranging such rentals is not expensive.

Home health care must also be carefully considered because "not all agencies are appropriate for these patients." To assure that Moffitt’s patients have proper home health care, the center provides free training to local health care agencies.

No two transplants are identical, Ms. Goldsmith emphasized, and there should not be a single rate for the so-called typical" "allo" or "auto." Rather, rates should be "tiered" to take into account a variety of circumstances.

For successful contracting of global bone marrow contracts, she said, hospitals must offer payers a "one-stop shopping" contract covering all necessary services and procedures (with specific exclusions for each stage as described above).

In addition, she said, the center must know its costs and understand that as technology and practice patterns change, costs are a "moving target" that must be re-evaluated periodically.