Managed Care - April 2008 - (Page 29) what constitutes a life-saving treatment. Payers say a drug offers a survival benefit if it extends a patient’s life by at least nine months over an alternative; oncologists say three months. Average sales price increasingly accepted The majority of health plans will use ASP to pay for oncology drugs by 2009. Payers’ top strategy Oncologists frequently make more than half their income from the markup on chemotherapy drugs they administer in their offices, so changing the way in which they are paid for those drugs is no small matter. That is why Medicare’s 2005 move to use average sales price (ASP) to pay for those drugs instead of the traditional average wholesale price (AWP) was pivotal for oncology practices nationwide. ASP pricing has lowered the amount that oncologists are paid for those drugs. In some cases, the difference is extreme: More than half of the oncologists that Zitter surveyed said that they are “under water” — meaning the price they are paid does not cover their cost — on some chemotherapy drugs. Medicare’s move to ASP paved the way for private payers. By 2009, more than half of health plans expect to be using ASP, but the change is not going exactly as they envisioned. Oncologists, particularly the large practices that have more leverage in negotiations, balk at accepting the lower payment. Health plans expecting to pay the Medicare rate — the average sales price plus 6 percent — have been forced to pay more to get physicians to sign contracts. “They are offering ASP plus 12 percent or ASP plus 18 percent and trying to make some concessions to soften that transition,” says Nicole Dautel at Zitter. For example, she finds that 63 percent of payers have increased fees that they pay oncologists for drug administration, outcomes reporting, and other types of services. UnitedHealthcare is one of many payers experimenting with new ways to pay oncologists. One large oncology group is following breast cancer regimens that its physicians chose first because they offer the highest efficacy and lowest toxicity and, second, because they cost less than alternatives. Lee N. Newcomer, MD, senior vice president for oncology at UnitedHealthcare, says his company is measuring the difference in cost and Not planning move to ASP 35% 36% Currently using ASP 29% Will move to ASP by 2009 Current oncology payment policy Of 100 plans surveyed, 36 use ASP to pay oncologists. 42% 28% 22% 8% ASP +6% (Medicare rate) ASP +12% ASP +18% Other Cancer therapy management tools The use of compendia listing requirements and step edits has increased significantly in the past year. Percent of plans using this tool Prior authorization Copayment/coinsurance Compendia listing requirements Tier placement Supported by published study Specialty pharmacy vendor/ pharmacy benefit manager Quantity limits Specific lab or diagnostic values Step edits 56% 56% 53% 53% 50% 48% 48% 48% 78% Source: Managed Care Oncology Index, Winter 2008. Zitter Group, based on survey of 100 health plans covering 105 million lives and 126 oncologists APRIL 2008 / MANAGED CARE 29
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.