The impact of the ACA on oncology treatment: a gut check at year three

Loreen Brown provides us with an overview of the American Affordable Care Act and its impact on oncology treatments. 

Since it was signed into law a little more than three years ago, The Affordable Care Act (ACA) continues to shape the healthcare industry and influence how healthcare will be delivered in the United States for years to come. It is a living, breathing piece of legislation, one that has both proponents and critics, particularly within the cancer community. The ACA has three predominant goals:

• Expand access to health insurance coverage

• Improve affordability and sustainability for those who have healthcare insurance

• Control the rising costs of healthcare while improving quality

There are several key areas in which the ACA has already had an impact on oncology treatment. In this article, we’ll examine these and forecast how ongoing implementation will continue to influence the patient experience.

Reversing the trend in patient out-of-pocket costs

While out-of-pockets costs of oncology treatment can be staggeringly high for many cancer patients, provisions of the ACA have begun to somewhat reduce the financial burden of treatment. Prior to 2012, Part D patients taking oral oncolytics were often subject to high co-pays often in the hundreds and thousands of dollars before entering into the catastrophic phase of their plan, at which 95% of prescription costs were covered at 95%. In 2011, the department of Health and Human Services (HHS) began making efforts to close the coverage gap by offering patients a nominal prescription rebate of $250. In subsequent years, the efforts to close the gap have become more substantial and require pharmaceutical manufacturer participation. Rather than pay 100% of the cost of all drugs in the coverage gap, pharmaceutical manufacturers were required to offer patients a 50% discount on branded drugs. Over the next several years, the coverage gap will continue to close until 2020, at which time pharma manufacturers will still cover 50% of the cost of the drugs, but health plans will also cover 25% of the cost, leaving the patient the remaining 25%. HHS estimates to date that Medicare beneficiaries have saved more than $6.1 billion in drug costs through the closing of the Medicare drug gap1.

“…Medicare beneficiaries have saved more than $6.1 billion in drug costs…”


Other ACA-related consumer protections include limitations on plan deductibles and out-of-pocket costs that apply to employer-sponsored plans, as well as those offered within the state exchanges, which may help to decrease patients incurring overwhelming medical bills from oncology treatments. In February of this year, HHS released the final rules which outlined cost sharing limitations for all commercially insured patients. Beginning in January 2014, the maximum deductible an exchange plan can require is $2,000 for an individual or $4,000 for a family. Limits on annual out-of-pocket spending are $6,250 for individuals or $12,500 for families. While this is a positive step, based on the large number of plans HHS admitted that in the first year, enforcement of the new limitations will not likely be feasible.

An FAQ, published by the Department of Labor (DOL) in late February, admitted that they will not be able to enforce the requirement for employer-sponsored plans who may utilize more than one administrator for plan benefits. The document indicates that for the first plan year, the DOL will consider plans to have satisfied the annual limitation on out-of-pocket maximum requirements if the plan applies the limitation to major medical coverage. Consumer groups argue that this leaves open the door for plans to apply separate out-of-pocket limitations to other types of coverage (i.e., prescription drug benefits), essentially doubling a patients out-of-pocket maximum for that plan.

Increased access to preventive screening

With many forms of cancer being preventable, regular screenings have become an important staple of standard care for many Americans. According to a press release from HHS earlier this year, approximately 71 million Americans with private commercial insurance, and 34 million Medicare and Medicare Advantage beneficiaries have received coverage for at least one free preventive healthcare service mandated by the ACA2. Based on guidelines from the US Preventive Services Task, this includes colorectal cancer screenings, BRCA counseling, cervical cancer screening, breast cancer mammography, and breast cancer chemoprevention3. Studies suggest that being uninsured significantly reduces the likelihood of cancer screening, and with an estimated 7 million new patients accessing coverage through the exchanges, and Medicaid expansion increasing enrollment by another 8 million, it’s likely that the influx of the newly insured may lead to an increase in patients accessing these types of preventive services4,5.

“With many forms of cancer being preventable, regular screenings have become an important staple of standard care for many Americans.”

The carrot and the stick driving reporting of quality measures & treatment pathways

Another aim of the ACA is to improve patient quality of care, while also reducing expenditures. The ACA provided funding to support programs that incentivized providers to meet quality standards and encouraged organizations to experiment with integrated care delivery models.

CMS developed the Physician Quality Reporting System (PQRS) to provide a financial incentive bonus to physicians who volunteer to report on best practice quality measures for the Medicare patients they treat. If participants successfully meet the criteria of the PQRS program and report all applicable measures, they receive a bonus of a percentage of total allowed Medicare Part B charges for that reporting period. Since the program was implemented in 2007, PQRS has continued to expand, and the number of cancer care-related quality measures doubled from 13 in 2011 to 26 as of the end of 2012. The ACA authorized the payment of incentives for successful reporting of quality measures through the PQRS through 2014. Both 2013 and 2014 mark the last 2 “carrot” years, in which providers will be eligible for incentive payments for successful participation, as beginning in 2015, non-participating providers will be subject to a 1.5% reduction in Medicare Part B fee schedule amounts.

The creation of the Medicare Shared Savings Program (MSSP) allows qualified groups of providers and suppliers to work together to manage and coordinate care for Medicare fee-for-service (FFS) beneficiaries through an Accountable Care Organization6. ACOs participating in the Medicare Pioneer and Shared Savings programs account for 250 of the total 428 ACOs that currently exist in 49 states. The total number of ACOs has nearly doubled since 20117. The success of these programs will largely depend on the ACO’s ability to achieve the desired saving and improvement in care through enhanced coordination of healthcare services. In 2012, the first oncology-focused ACO was formed with the collaboration of Florida Blue, Baptist Health South Florida, and Advanced Medical Specialties, a Miami-based oncology group8.

While the current number of oncology-focused ACOs may be limited, integrated care models such as the patient centered medical home (PCMH) model, have has been adopted by various practices and healthcare organizations throughout the country and is growing in the oncology community. Last August, the Centers for Medicare and Medicaid Innovation awarded a $19 million grant to the New Mexico Cancer Center and Innovative Oncology Business Solutions, to implement and test an oncology PCMH. This PCMH demonstration will be dedicated to providing care to newly diagnosed or relapsed Medicare and Medicaid beneficiaries and commercially insured patients for the treatment of breast, lung, and colorectal cancer9. There is significant interest among community oncologists regarding the outcome of this project.

“…the high cost of oncology treatment makes cancer especially vulnerable to change.”

The increased focus on and funding behind ACOs appears to have provided a boost to efforts to inject treatment pathways into the delivery of care for cancer. Clinical pathways strive to standardize oncology treatment. A 2012 survey of medical and pharmacy directors representing 100 million lives showed that 40% of the respondents had already adopted or were planning to adopt clinical pathways10. Previous studies have shown that the utilization of pathways can reduce costs, however as new oncology treatments come to market, pathways will need to be revisited and the potential cost savings could fluctuate in favor of improved patient outcomes11. While commercial payers are on board, it remains to be seen how patients with coverage through Medicare and Medicaid will be treated. As more patients are moving from fee-for-service to managed care, participating plans receiving capitated payments from the state and federal government may also adopt clinical pathways.

Sequestration cuts shaking whole foundation of private, community-based oncology

While the ACA has had a significant impact on oncology treatment the most recent government action, or better yet, inaction has had the most immediate impact on oncology treatment. The results of a recent survey conducted by the American Society of Clinical Oncology suggest that the 2% cuts to Medicare payments resulting from sequestration have impacted oncologist’s ability to treat their Medicare patients. A total of 50% of respondents reported sending their Medicare patients elsewhere for chemotherapy, primarily to more expensive hospital outpatient infusion centers, and 50% indicated they would no longer treat Medicare patients unless they had supplemental coverage. While the ACA aims to improve quality and reduce costs, sequestration is forcing oncologists to move patients to alternate sites of care that can disrupt treatment and is more expensive for the Medicare program.

While all medical specialties are impacted by healthcare reform and legislation that impacts Medicare reimbursement, the high cost of oncology treatment makes cancer especially vulnerable to change. The future of cancer care is ever evolving. Pharmaceutical manufacturers will need to be nimble in order to adapt health economic strategies, launch plans, and patient access services to support cancer care providers and patients within an ever changing healthcare system.







6. ACA §3022










About the author:

Loreen M. Brown, MSW, is a Senior Vice President leading Xcenda’s Commercial Consulting business, an area that includes payer marketing, reimbursement and market access strategy, and field support services. Before joining Xcenda in 2008, Ms. Brown worked for Bayer Healthcare Pharmaceuticals, most recently as the Director of Oncology Customer Marketing. There, she helped design and implement an oral oncolytic distribution and support program during the launch of the Medicare Part D benefit. Ms. Brown has over 10 years of pharmaceutical industry experience primarily focused in the oncology marketplace.

How has the ACA impacted oncology treatment in the US?