It's a tough trail to secure payment for high-tech drug therapies
It’s a tough trail to secure payment for high-tech drug therapies
Patient advocacy, determination can overrule poor policy
It’s always been a tortured trail to obtain reimbursement for many high-tech, costly drug therapies and related physician services under the fee-for-service system, particularly for chronic or terminal diseases. Physicians operating in a managed care environment aren’t immune to this problem either. The reason: Managed care contracts typically provide carve-outs for high-tech services.
In our "quick-fix" culture, experts say, insurers and government authorities are more inclined to pay for one-shot services that see a patient through to recovery. But when it comes to more complex and incremental care provided over longer periods, payments tend to be lower, if present at all.
This payment gap creates higher costs and pushes costs into other parts of the health care system costs that would be avoidable if payment policies were revised, points out John Kirkland, MD, a pediatrician at the Baylor College of Medicine in Houston and an expert in growth hormone deficiency (GHD).
$20,000 a year for drugs alone
The payment gap also has a human side. Kirkland can cite many examples such as this: A young child is diagnosed as suffering from GHD. The cost for drug treatment for one year will be at least $20,000. Unless the child can receive the therapy, he’ll never have a shot at a life free from the debilitating effects of GHD. Kirkland pleads the child’s case to a drug company, which agrees this time to provide the drug as charity. Next, he appeals to insurers, seeking reimbursement to cover all the necessary follow-up visits.
The young child with GHD is not alone. Physicians tell Physician’s Payment Update that this kind of situation arises frequently for patients requiring more expensive or long-term care. Even in managed care, capitation or discounted fee-for-service payments start with basic payment history and then go from there. Amid countless policy inconsistencies among private payers and Medicare, experts tell PPU the one key ingredient that has won payment victories for physicians is this: a passionate commitment by both physicians and administrators to fight for payment that’s deserved.
Fight for every penny
Said one administrator in an interview, "I’ve been in this business for 25 years, and I’ve fought for every penny." Said another, "Children can’t vote, and because of that, no one represents them unless it’s one of us."
Increased use of off-label drugs, accompanied by inconsistent and changing payment policies for covering off-label uses, is one trend emerging for high-tech or high-risk drug therapies and diagnoses (see related story, p. 19). Carol L. Brosgart, MD, an infectious disease specialist at Alta Bates Medical Center and the East Bay AIDS Center in San Francisco, says off-label drug use is more often the norm than the exception for her AIDS patients. Other common payment trends are emerging for high-tech or high-risk drug therapies and diagnoses, including:
• poor access to many drug therapies and diagnoses for patients in need;
• low reimbursement (if any), which causes a shift of patient care from physician offices to hospitals, where the cost is even greater.
Reimbursement pitfalls in drug therapies and diagnoses promise to be a growing threat to chronic disease patients and the physicians who treat them, particularly given expert predictions that chronic disease will outstrip infectious disease in prevalence over the next decade and beyond.
Recent studies, and interviews with experts conducted by PPU, point to at least three types of diseases that are especially tough for which to secure fair reimbursement sometimes for both diagnosis and treatment:
• AIDS;
• cancer chemotherapy;
• GHD diagnosis (currently, the drug to treat this condition is donated by drug vendors Eli Lily of Indianapolis and Genentech of San Francisco).
One-time fixes are easier to understand
"It’s a nightmare trying to get payment for [various] infusions," says Rocco Mastricolo, chief financial officer for Children’s Surgical Associates in Philadelphia. Formerly an administrator for home infusion services, Mastricolo points out that one-time surgical care remains an easier sell to payers than long-term drug therapy.
"Most carriers won’t accept the therapy as a proven modality," Mastricolo says. "You often have to get the pharmaceutical house to underwrite the cost.
"There is enough scientific evidence that the insurance companies should begin to accept more drug therapies. Somebody needs to champion that particular item at the national level and get reimbursement because of Medicare’s reluctance to approve it. If you can get Medicare to recognize something, then the rest of the world usually does. Medicare has never been quick to reimburse pharmacology. It’s a real dilemma," he concludes.
By contrast, Mastricolo notes that children’s surgical services are accepted by both managed care and indemnity payers much more readily, although he admits he does some targeted advocacy for specific patient cases frequently to ensure insurance payment. Either way, most of his specialists are paid on a fee-for-service basis. In managed care arrangements, his physicians perform their surgeries on a referral basis from primary care physicians, and their payments typically are made as discounted fee for service.
Even high-tech specialty services are more palatable to payers than drug therapies that can be needed for years at a time.
"We’ve started doing a unique surgery here related to fetal disorders," Mastricolo says. "We have a group of surgeons who specialize in a fairly new bone marrow transplant for infants, and they have been very successful. If you are precertified, the commercial carriers and the HMOs will pay for it. If you are successful, you’re talking about giving a child a normal life vs. a life that would end earlier. We do some really unique things like that."
Part of the reason surgical treatment is more readily reimbursed is that surgical costs are more definable, and thus costs are more predictable. "Surgery is easier to understand," he points out. "We walk them [insurers] through how we’re going to do it and give them the success rates. Some [success rates] aren’t that great, but it’s better than doing nothing. One in four babies has a life after some of these surgeries.
"If we do nothing, those born with a genetic heart defect have a restricted life span. Pharmacology is harder to understand, and resources are spread over a period of years. You can spend $20,000 to $30,000 a year on them. With surgery, you do the procedure, you know the cost."
As overall physician payment shifts from fee for service to managed care, the issue of payment for high-tech therapies is growing more dire, experts say. Insurers and government authorities are less inclined to look for a single technology or service-specific treatment. Instead, capitation leads to more holistic payments that may not include or at least take into specific account "outlier" drugs or treatments.
Children don’t have representation they need’
Payment won’t come without physician and administrator commitment to showing why it’s important, says Kirkland. "In Texas, more effort needs to be made to take care of children. Children have no vote. They don’t write letters, and in many situations their parents are young and don’t have influence.
"In the past, when something came up adverse to patients who are receiving Medicare, [former U.S. Senator] Claude Pepper from Florida held a hearing and those issues were quickly taken care of.
"Compared to the amount of money spent on adults, children are really getting less support from both government and the private sector. If you are a 65-year-old man and you have been drinking yourself into an alcoholic stupor, you can go to the finest hospital in Houston and get a transplant. Yet there are children who do not have the representation that they need to ensure medical care." These battles, experts suggest, will be won at the grass roots with individual efforts like Kirkland’s, committed to achieving payment changes one patient at a time.
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