Dr. Bailes Updates MMA Issues, Congressional Activity

May 1, 2006

Although the Medicare Modernization Act (MMA) is into its third year, the full effects of this legislation on the oncology community are still a matter of speculation. To bring our readers up to speed on current MMA issues, Cancer Care & Economics (CC&E) spoke with CC&E editor, Joseph S. Bailes, MD. Dr. Bailes is interim executive vice president and chief executive officer of the American Society of Clinical Oncology (ASCO). He also serves as co-chair of ASCO's Government Relations Council.

ABSTRACT: Although the Medicare Modernization Act (MMA) is into its third year, the full effects of this legislation on the oncology community are still a matter of speculation. To bring our readers up to speed on current MMA issues, Cancer Care & Economics (CC&E) spoke with CC&E editor, Joseph S. Bailes, MD. Dr. Bailes is interim executive vice president and chief executive officer of the American Society of Clinical Oncology (ASCO). He also serves as co-chair of ASCO's Government Relations Council.

CC&E: Does ASCO maintain a working relationship with the Centers for Medicare & Medicaid Services (CMS)?

DR. BAILES: Yes, ASCO interacts regularly with CMS. It's in the best interest of the oncology community for the Society to have a positive working relationship with agencies such as CMS that develop policies affecting cancer care. One thing to remember is that, as a general rule, where Medicare goes, so go the private payers. That is why it is very important to set the best policy you can with the federal government, because the private payers tend to follow this policy.

CC&E: The 2006 CMS Demonstration Project (see articles on page 32) is projected to yield about $150 million in additional payments to community oncologists, about half of the 2005 Demonstration Project's yield. How will this cut affect community oncologists?

DR. BAILES: Unlike the 2005 Project, which paid oncologists for collecting data on patients' symptoms per chemotherapy encounter, the 2006 Demonstration Project is tied to levels 2 to 5 of E&M (evaluation and management) services, so there are a lot more individual payments involved. We don't have significant data on the '06 Project's net effect because practices are currently being reimbursed for claims they filed in January and February. The carriers seem to be implementing the payment system correctly, but it will probably be mid-year before community practices have a handle on its true economic impact.

CC&E: What is the current status of the pay-for-performance initiative and will ASCO's National Initiative on Cancer Care Quality (NICCQ) help reach a consensus on assessing quality measures?

DR. BAILES: The American Medical Association (AMA) has an agreement, so to speak, with Congress to develop measures for the proposed pay-for-performance initiative using the NICCQ validated quality measures and National Comprehensive Cancer Network (NCCN) practice guidelines. So far we have developed quality measures in breast and colorectal cancer, so on our end we're ahead of the process.

CC&E: How will the transition to pay-for-performance occur?

DR. BAILES: Congress will decide when they want to put pay-for-performance into actual practice. I believe that we'll probably see an incremental process, with Congress first implementing a pay-for-reporting system, similar to how we're being paid for collecting patient data in the CMS Demonstration Project. After the doctors are familiar with the reporting process, pay-for-performance will likely be instituted.

CC&E: Are there any proposals that address the lag between the time average wholesale price (ASP) data are collected and when Medicare ASP-based payments are updated?

DR. BAILES: There are a couple of bills in Congress that have "true-up" provisions for drug payments, but those provisions can cut both ways. In other words, if CMS determines that certain doctors have, in fact, been overpaid for drugs, the doctors will have to refund the overage. There are also some members of Congress contemplating a bill that would give Medicare the authority to correct reimbursement for "underwater" drugs (drugs not available at the Medicare payment amount) at the ASP + 6%. But whether any substantive MMA legislation is passed this year remains to be seen.

CC&E: Is there any activity on the Hill focusing on appropriate payment for cancer care services?

DR. BAILES: There's one bill in the House and one in the Senate, but, quite frankly, the current legislative efforts just tweak around the edges of the issue. There is really no bill that comprehensively addresses the problem. We still have underpayment for drugs. We still have underpayment for services. The overarching problem is actually quite simple: There's very little money in the current budget to pay for anything. It's a big problem for everybody.

CC&E: Are there any data showing how MMA has thus far impacted oncology practices around the nation?

DR. BAILES: None from any of the major cancer organizations. However, at the end of last year, the Medicare Payment Advisory Commission (MedPAC) issued a report on access to chemotherapy services, which found that most beneficiaries did not experience significant modifications in their cancer treatments as a result of MMA. Some satellite facilities have closed, and there has certainly been a lot more activity trying to secure drug coverage for Medicare beneficiaries without secondary insurance. But on the whole, there has not been substantial change in oncology practice as a result of MMA. That said, the Demo Project payments of last year may have masked an underlying economic situation that will ultimately surface. We'll have to wait and see.

CC&E: Is there concern that Part D (the Medicare prescription drug benefit) will have an adverse effect on oncologists' ability to prescribe off-label drugs?

DR. BAILES: Right now there is no merging of Part B and Part D; the off-label provisions of Part B apply to Part D as long as the requirements are met. So prescibing off-label drugs under Part D shouldn't be problematic. The bigger issue is that many of the antineoplastics covered under Part D end up having very costly co-pays because they are in higher tiers of the formulary. For a beneficiary living on a fixed income, co-pays for some of the expensive new cancer drugs could prove problematic.

CC&E: In short, do you think Part D has more benefits than negatives for the oncology community?

DR. BAILES: Yes, I do.

CC&E: What can we expect from your annual reimbursement forum at this year's ASCO meeting?

DR. BAILES: Obviously, we will discuss the 2005 and 2006 Demonstration Projects and any relevant data that CMS has released. We will review Part D and how Medicare is approaching off-label uses of FDA-approved drugs. We will also talk about physician fee schedule changes and pay-for-performance.

CC&E: The National Cancer Institute (NCI) and the Food & Drug Administration (FDA) are undergoing leadership changes. Is this a concern for oncology?

DR. BAILES: Most people in oncology feel strongly that there needs to be dedicated leadership at NCI and FDA. Both of these institutions are vital to the oncology community, but it's a political process of nomination and hearings, so we'll have to see how it plays out.

CC&E: Are politicians finally beginning to understand the complexities of practicing oncology?

DR. BAILES: Some do, but the residual feeling on the Hill is that oncologists are still making too much money off of drugs. It's a mindset that's difficult to undo, but we're working hard to educate members of Congress. The legislation that will be introduced this year looks at survivorship issues, coding changes, and treatment planning. Unfortunately, the drug pricing battle is dead, so the goal for us is to ensure that our services are appropriately covered.

CC&E: Are you optimistic that CMS and the oncology community will reach common ground on the economic issues surrounding MMA?

DR. BAILES: I certainly don't think that in the intermediate term we are going to reach a point where everybody can declare victory and go home. So again, we need to remain focused on making sure that all of our services are properly paid for so our doctors can continue to deliver the high-quality cancer care their patients deserve.