Life Sciences

Copay assistance, patient balances up in downturn, but long-term payer contracts are greater concern

Medicare & Reimbursement Advisor Weekly, June 3, 2009

Although there haven’t been significant average sales price/average wholesale price reimbursement changes for specialty providers such as oncology practices, there’s concern on the horizon. Many practices lock in payer contracts for multiple years. Mid Ohio Onc/Hem in Columbus locked in contracts in January for three years in some cases, and the reimbursement is based on 2008 Medicare rates. “If rates go down, it will be harder for us to go back and negotiate better rates. And even if they don’t go down, what if inflation goes up? We could face a more challenging business setting than what’s going on today, making payroll harder to meet, for example, bringing in access issues,” says Glenn Balasky, executive director at Mid Ohio Onc/Hem. The economic downturn has lowered volume about 5% and increased patient balances by 20%, compared to this time in 2008, forcing the group to reduce staff time on Fridays and shop for lower drug prices—even 20-cent savings on generic support agents, says Balasky. Pharmaceutical assistance is tracking at about $70,000 per month, up 40% from the same time last year. Judy Stone, director at Carolinas Hem/Onc, says free drug assistance has tripled in the first half of the year due to flattening volume, higher deductibles, and odd plan policies that only cover inpatient chemo treatment. Stone is concerned that patients will present to the group more sick, “at a higher-stage cancer.”