Engaging with Local Payers: The Oncology Practice Perspective

Cancer care, which can encompass inpatient treatment, imaging, diagnostics, office visits, pharmacotherapy, and end-of-life support, continues to increase in cost. As government and private payers seek to rein in the rising costs of care, there has been a clamor for consistency in patient care decisions and a reduction in treatments that deviate from evidence-based clinical guidelines. Health insurers thus continue to seek ways to eliminate waste and promote standardized care. Although oncology practices and providers can agree on the ultimate goal of efficient, patient-centered treatment, they may not, however, agree on the details of how oncology management should evolve.

Within this landscape, oncology practices can take an active role to ensure that their interests are represented fairly in discussions with payer organizations, and that conversations with local payers are productive for all stakeholders. To further this discussion, Innovations in Oncology ManagementTM recently interviewed Dawn Holcombe, President of DGH Consulting and Executive Director of the Connecticut Oncology Association, who brings more than 30 years of management experience in hospital, system, network, and physician practices. She is a former president of the Medical Group Management Association’s Administrators in Oncology/ Hematology Assembly and a Fellow in the American College of Medical Practice Executives. In addition, she serves as the editor-in-chief of Oncology Practice Management and is on the editorial advisory board for Value-Based Cancer Care.

Q: Describe the current climate for collaboration between payers and oncology practices, especially within the community oncology setting?

Dawn Holcombe (DH): The climate is ripening, and I believe that oncology is where the true innovation is going to happen. In many ways, oncology is a microcosm of the entire healthcare arena. What we learn in terms of collaboration and managing our patients with cancer will translate to the larger healthcare landscape. There is going to be change in oncology management, and it is important that those who are treating the patients and those who are paying for their care are the ones sitting at the table.

Q: There have been many well-documented efforts by payers and providers to come together at the corporate level; however,examples of successful organic collaboration at the local level are far fewer. What has your experience been?

DH: Yes, there have been less local efforts for several reasons. In many markets the opportunity is limited because the majority of oncologists are hospital-based. Therefore the conversations are being held between the payer and the institution, rather than between the payer and the oncology practice.

Also, it is not always clear to practice leadership with whom they should be speaking. Payers often delegate management responsibilities, and third-party companies are getting involved in decisions about appropriate oncology care. Several specialty pharmacies and pharmacy benefit managers are seeking to step into the arena as well.

Regardless of other entities that may potentially be involved, I think that the practice should be speaking with the organization that is ultimately responsible, and typically that is the payer or even the employer. Local efforts have been limited to some degree, because the different parties do not know how to begin the dialogue.

Q: How does an oncology practice begin to engage in collaboration with payer organizations or employers? How do they start the process?

DH: It starts with smart baby steps. First, practices should conduct a preliminary internal assessment to identify the number of patients who are members or employees of the payer organization or employer with whom they wish to engage. A practice should not even knock on the door until they can answer that question internally.

The practice also needs to understand its value portfolio: what is it about the practice that would make a potential partner want to work with it as opposed to somebody else? The practice must understand what that is and what it brings to the table before it starts the conversation with a payer or employer.

Q: If a practice conducts this internal assessment and decides to move forward, how does it initiate the discussion with a local payer or employer?

DH: First, the practice needs to define what it wants to discuss and create a framework to guide the discussion; therefore, developing an agenda is critical. When creating this agenda, each party must think about the other party’s interests, not just about its own. The challenge is to develop an agenda that focuses on what the other party needs and wants—planning a meeting to say “I need to be paid more for what I do” will not lead to success. In my experience, the chance of success is greatly enhanced when the 2 groups are willing to put themselves in each other’s shoes and truly prepare for the conversation. The collaborative process unfolds gradually, and working together requires trust, which takes time to develop.

Q: How do practices and payers determine where their interests align?

DH: Any successful collaborative relationship must bring value to both parties. To understand value in this context, both parties need to look at the big picture, using the information that is available. Both sides have data that are crucial to painting the larger picture: the treating provider or institution has the detailed, patient-level clinical data, and the payer has the claims information with medical, pharmacy, and laboratory data. When you can marry these 2 sets of data, this is where you will get the information needed to move forward.

Too many physicians or provider groups are still preparing to obtain information. In the hospital setting, data collection is often complicated by legacy information systems, which lack details regarding oncology specifics, making it difficult for those cancer centers to integrate clinical data. In some large cancer centers, there can also be huge billing systems that may be connected to the clinical data, but it is difficult to pull out the information that payers need.

Q: Assuming that the conversations are productive and moving forward, at what point in the process will payers begin to involve their actuaries?

DH: There should be enough relevant data on the table for the payer and the practice to be able to look at it and say, “This alignment makes sense.” Then, the payer and the practice will interpret that data for the actuaries to ensure that nothing gets missed.

From a practice perspective, it is important that the discussion is not focused merely on drug costs. A comprehensive analysis should also account for potential medical cost offsets, such as reduced hospitalizations or emergency department visits.

When the payers bring their actuaries to the table, it usually means that they are serious about working out an arrangement that is mutually beneficial to both parties. At that point, the conversations will have been productive, and the 2 groups will already have established a good comfort level and trust in working together.

Q: In these types of discussions, which individuals represent the practice?

DH: At a minimum, the managing partner, physician or physicians, and the chief practice administrator should be present.

The key clinical manager––typically the nursing administrator who sets up the clinical policies and procedures––should also be at the table.

From the payer’s side, the medical director should be present in the beginning, along with the pharmacy director. Provider relations should also be represented.

Q: Why do many of these collaborative efforts fail?

DH: Both sides need to be willing to compromise. Practices should realize that they must take the steps that will help to meet the needs of the payer organization, and payers must be ready to offer reasonable incentives if the practice is willing to build consistency into their practice patterns. Discussing reimbursement from the onset is not going to get the practice very far.

Q:We covered discussions at the practice level. Do state oncology societies become involved in these types of collaborative discussions as well?

DH: Yes, state oncology societies have also participated in these discussions, including those in Michigan, Connecticut, Southern California, Alabama, and Florida, to name a few. Several state societies have been active in discussing clinical pathway launches on behalf of their member practices. For example, the state society in Alabama was actively engaging BlueCross BlueShield of Alabama about its different pathway programs in oncology. In addition, the Florida Society of Clinical Oncology is engaged in promoting the discussion of the business of oncology and the collaboration between payers and its members; we are doing the same in Connecticut.

The societies themselves rarely have a direct financial stake in the outcome; however, they can play an important role in facilitating local discussions between payers and their member practices.

Q: Are there any other examples of payer and community oncology collaborations that are currently taking place?

DH: Yes, several discussions are ongoing. For example, Aetna, a large national health plan, conducted several pilots around tumor-specific clinical protocols, and it has identified what it would like to see in a practice that wants to come to the table. It has engaged in specific contracts with approximately 10 different practices and is in discussions with another dozen practices.

Anthem (formerly WellPoint) and BlueCross BlueShield of Michigan have engaged in similar initiatives. However, the Anthem pathway rollout is meeting challenges in several of the states where it has been implemented, in part because it was built by the payer with limited input from the oncology community. As a result, providers are saying, “Wait, this is not exactly what we are comfortable with.” It all goes back to the importance of true collaboration.

Despite these challenges, however, I expect to see more collaboration between oncology practices and payer organizations in the near future.

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