Impact of reimbursement and health care reform on the ambulatory oncology setting

Impact of Reimbursement and Health Care Reform on the Ambulatory Oncology Setting Deanna M. Xistris and Nancy G, Houlihan

EALTH CARE reform, both actual and anticipated, permeates all levels and practice H settings of oncology care today. Amid a flurry of insurance company, hospital and physician acquisitions, mergers, and alliances, along with insurance regulations that appear to change daily, it is the ambulatory care settings, both in the private office setting and hospital-based clinics, that appear most immersed in the details of change posed by the current reform environment. The threat of diminished revenues can undermine the creative models of ambulatory care delivery that have evolved over the last decade. It is useful to acknowledge the uncertainty and tension that is part of health care today. This recognition provides the impetus for the clinician to remain engaged in the change process and to define what is important about both the content of oncology care and how it is given. To effectively influence the current health care debate and to solve the reimbursement difficulties encountered in daily practice, the clinician requires a knowledge of health care trends. These trends include primarily the movement of care to community and ambulatory settings, insurance types and terminology, and the strategies useful in resolving billing issues unique to the ambulatory oncology setting. TRENDS IN AMBULATORY CARE

Awareness of increasing medical costs spurred new interest in cost containment by hospitals and insurers. Throughout the 1980s with decreasing reimbursement available, hospitals began examining lengths of stay and reasons forl admission. It became generally recognized that more efficient models of care were needed. This was especially true for cancer patients. At the time, it was estimated that 60% to 70% of the direct cost for cancer patients was for hospital care. ~ Over the last decade, shifts to ambulatory care included delivery of complex chemotherapy in "Day Hospital" units, development of outpatient treatment regimens for chemotherapy and radia-

tion, and more widespread use of ambulatory (day stay) surgery. Modalities requiting continuous or more lengthy intravenous infusions such as chemotherapy, antibiotics, and total parenteral nutrition support moved to the outpatient or home care setting. This was possible because of advanced technology (ie, portable infusion pumps) and the availability of skilled and specialized clinicians. Throughout the last decade, hospital-based ambulatory care settings have increased. Parallel growth has also occurred in the physician-nurse collaborative practice models of the office-based oncology practice. It is projected that hospitals of the future will be reserved for complex surgery, intensive care, and emergency trauma treatment. All other care will be delivered in outpatient (day-stay hospitals, community cancer centers, and private oncology offices) or home care settings, causing a major shift in the primary workplace of the nurse.

Nursing Care Delivery Current and expected changes in reimbursement create new demands for the oncology nurse working in the ambulatory setting, whether hospital or office based. The nurse requires increased and specialized skills to deliver complex therapies and to performtelephone assessment as well as symptom management. Patients and family members require extensive education about their illness and selfcare interventions necessary to prevent or shorten illness and to improve quality of life. This expanded or intensified nursing role brings with it increased accountability and a stronger collaborative practice with physicians. From the Bennett Cancer Center, Stamford, CT, and the Memorial Sloan-Kettering Cancer Center, New York, NY. Deanna M. Xistris, MSN, RN, CS: Clinical Nurse Specialist, Hematology-Oncology PC, Bennett Cancer Center; Nancy G. Houlihan, MA, RN, OCN: Clinical Nurse Specialist, Ambulatory Care, Memorial Sloan-Kettering Cancer Center. Address reprint requests to Deanna M. Xistris, MSN, RN, CS, Clinical Nurse Specialist, Hematology-Oncology PC, Benhen Cancer Center, 34 Shelburne Rd, Stamford, CT 06902. Copyright 9 1994 by W.B. Saunders Company 0749-2081/94/1004-000755.00/0

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Reimbursement for Nursing Services Direct reimbursement for nursing services persists as a major goal within nursing. The struggle for nurses in obtaining reimbursement remains largely because of the lack of documentation showing how much of a particular service now billed by a physician is actually performed by a nurse and how many services are delivered by a nurse and billed under the physician's name. The ambulatory setting is uniquely burdened with the dilemma of securing reimbursement for nursing services through a system defined primarily for physician-rendered care (Medicare " B " ) . Efforts over the last 2 years by the American Nurses Association (ANA) and the specialty organizations, including ONS, have identified those services that advanced practice nurses provide that are covered in the Current Procedural Terminology (CPT) manual. They have also identified and quantified nursing interventions that are not included. This has been accomplished primarily through surveys distributed to the nursing specialties and is the focus of an ongoing study between ONS and ANA. The following challenges are faced by oncology nurses in obtaining direct reimbursement: better documentation of cost benefit through measurement of patient outcomes; achieving recognition of the advanced practice nurse; achieving unity within nursing in definition of roles, credentials, regulation, and education; and continued representation with legislators to ensure a position for nurses in the health care system. Currently, ambulatory nursing services are covered under the Medicare provision of services furnished "incident to" a physician's service. This includes the services of a physician's employee delivered in an ambulatory setting if the service is within the scope of the nurse's practice, if the physician is on site, and if the service is related to the physician's plan of care and the primary condition for which the patient is under medical care. This category of reimbursement limits nursing practice to physician supervision and does not allow for treatment or interventions for conditions that are within the defined scope of nursing practice, particularly on the advanced practice level. 2 In response to requests by nurses to examine the impact of the CPT-revised payment system, the Physician Payment Reform Commission made its first recommendation concerning nonphysician providers

(NPPs). The commission stated that NPPs should be paid at a percentage of physician payment levels reflecting differences in resource costs. The ANA disagreed saying that nurses should be paid the same when the service provided is the same. 3 Several state and federal proposals are taking up this debate, including the Health Care Financing Administration (HCFA). Hopefully, the current health care reform environment will bring about meaningful change in the reimbursement available to nurses. Presently, reimbursement for nursing services varies by type of practitioner, location of practice setting, insurance carrier, and state. DIFFERENT TYPES OF REIMBURSEMENT

Insurance coverage varies greatly by population, group, services covered, and the percentage of the medical bill that is covered. Insurance contracts may include limits or maximums of coverage and deductibles and may exclude certain diseases that are preexisting. Definitions of common health insurance terms are listed in Table 1. The major types of reimbursement for the government and private sector are shown in Table 2. Table 1, Health Insurance Terminology Deductibles

Coinsurance

Limits/maximum

Service plan

Indemnity plan

Prescriptive plan

Consumer pays a flat dollar amount before insurance covers all or part of the remainder of the price of the service. Third-party payer reimburses the patient for a fraction of the price of the service--the patient pays the remaining amount or may bill a secondary insurance. The third-party payer will reimburse patients for medical expenses up to a maximum dollar amount--above that limit the patient is responsible. Payment is made directly to the service provider (ie, hospital) for the cost of the services provided~usually limited to a maximum number of days. The reimbursement is paid to the patient, not to the provider of the service. The reimbursement is for the medical cost incurred by the patient. Drugs purchased, usually from a pharmacy, are paid for in full. This includes oral drugs and parenteral drugs intended for self-injection.

REIMBURSEMENT'S IMPACT ON AMBULATORY ONCOLOGY Table 2. Major Type of Reimbursement

Government Programs Medicare Covers all individuals over the age of 65 regardless of income, Medicare " A " Reimburses for hospital costs. Medicare " B " Reimburses for cost of physician services, Medicaid Federal state-matching program for poor or lowincome patients.

Private Sector BCBS

Commercial carriers (ie, Metropolital Life).

HMOs (ie, Kaiser, US Health Care).

PPOs (ie, Oxford).

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Finally, Medicaid, which also began in 1966, is a federal-state matching program whose designated beneficiary group consists of low-income patients. Although the federal government shares the cost of the program, it is the states that define eligibility requirements and benefit coverage. As a result, wide variations in both eligibility and coverage exist across the nation with less than half of those living below the national poverty being eligible for Medicaid benefit. 5 This fact is the basis of the current debate in health care reform to ensure coverage for all.

Private Sector Sel~insurance companies.

Government Programs A large percentage of health care in this country is financed by the government. Medicare, which started in 1966, is the federal program to cover medical expenses of the elderly. Individuals over the age of 65 regardless of their income levels are included. The benefits and the prices each person must pay, that is, the deductibles and copayments for both Medicare " A " (hospital service costs) and Medicare " B " (physician services cost) are the same for each person. The intense scrutiny currently focused on the Medicare program with the concomitant changes in reimbursement to the providers is the direct result of how the program is financed. Medicare " A " is financed by a designated social security tax. It is this tax that is expected to be bankrupt by the year 2005. Medicare " B " is financed through general tax revenues. Expenditures under this program reached $43 billion in 1990, a doubling from the previous 5 years. 4 Because it is not funded through a designated tax, Medicare " B " contributes directly to the budget deficit and consequently has been severely scrutinized as a rich source for potential savings in counteracting the nation's huge national budget deficit. In 1989 Congress took a first step in limiting Medicare " B " cost by enacting a physician's payment system, a national fee schedule for physician services, which is the basis for the CPT codes used in all ambulatory care settings. This new payment system is being implemented over several years and is the basis for much of the seemingly constant changes in reimbursement encountered in the ambulatory setting.

The major private insurance plans in this country are offered through group employment benefits, primarily Blue Cross and Blue Shield (BCBS) plans that are nonprofit, and the commercial cartiers, which are for profit. A growing portion of the health insurance's market consists of prepaid health maintenance organizations (HMOs) such as Kaiser Permenente. Preferred Provider Organizations (PPOs) have emerged and are comprised of a closed panel of providers who are willing to discount their prices and/or have lower user rate than other providers with the goal of attracting a greater volume of clients in return for discounting their prices. 4 A growing trend in the insurance industry is "self-insurance." Increasing numbers of American companies are moving towards self-insurance, assuming the financial risk of health insurance for their employees and using the companies' assets to pay the claims. According to the Health Insurance Association of America, more than half of all employees in the United States work for companies that are fully or partially self-insured. The selfinsurers are exempt from the usual regulations required of all other payers and types of insurance. This has raised concern as to discrimination in benefits for people with catastrophic illnesses such as acquired immunodeficiency syndrome and cancer.6 The HMOs, PPOs, and to some extent the selfinsurers all use a managed care approach to determine reimbursement. Managed care is a system of health care services initially developed by private insurers in an attempt to control hospital costs. The concept is no longer limited to hospital cost and is regularly applied to ambulatory care settings with

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special attention applied to not only a prescribed treatment but also how and where the treatment is delivered. Managed care involves a network of care providers who are linked by insurers with the stated goal of delivering the best available treatments while controlling costs. The major role of managed care companies is to conduct a case-bycase review to match a patient's medical needs to what the HMO believes is the most effective but least expensive treatment. Managed care is at the heart of most congressional proposals for health care restructuring in 1994. Increasingly, both government programs and the private sector are adopting the concept. For ambulatory oncology providers the diversity of insurance coverage poses both a challenge and dilemma of how to provide high technological and optimal, often expensive therapy in the face of questionable reimbursement. REIMBURSEMENT ISSUES UNIQUE TO AMBULATORY ONCOLOGY

The chemotherapy and biologic regimens used in cancer therapy are easy targets for reimbursement denials because of regulations against their investigational status, "off-label" usage, methods of administration, and relatively high cost.

Investigational Drugs Investigational status applies to any medication not yet approved by the Food and Drug Administration (FDA). Phase I and II clinical trials are in this category as are many of the National Cancer Institute's class " C " drugs. All of these therapies are administered with increasing frequency in the ambulatory setting and are frequently challenged by payers. Sporadic degrees of reimbursement are received and often only after appropriate documentation is supplied to the third-party payer.

Off-Label Drugs "Off-label" therapy has traditionally been defined as the use of drug(s) for a specific disease that is not listed in the package insert as indication for therapeutic usage or, alternatively, not listed in the three compendia (Drug Evaluations by the American Medical Association, American Hospital Formulary Service Drug Information, or The United States Pharmacopeia Drug Information) as

an acceptable indication. The Medicare Cancer Coverage Improvement Act (The Omnibus Budget Reconciliation Act [OBRA] 1993) now mandates coverage for off-label drug use if it appears in one of the three major compendia and is not found medically inappropriate by HFCA or another compendia, or if it is supported by published clinical evidence, or if it is medically accepted in the community.

Method of Drug Administration Chemotherapy and biotherapy treatments vary greatly in length, administration, and care requirements associated with the treatments. Drugs that may be self-administered, primarily the biologics (granulocyte colony-stimulating factors and erythropoietin), are consistently denied reimbursement by Medicare if self-administered. However, this same drug therapy is covered if the patient comes to the office or clinic and the drug is administered by a nurse or physician! The private carriers generally recognize the appropriateness of selfadministration. This is particularly true if the insurance contract includes "prescriptive" coverage. Progress has recently been made regarding oral chemotherapeutic agents. The OBRA of 1993 added a new section to the Social Security Act that extends coverage under Medicare " B " (physician reimbursement) to include certain self-administered oral cancer chemotherapeutic drugs. Designated drugs and physician guidelines for dispensing oral chemotherapy are listed in Table 3.

Clinical Trials Trends in clinical trials have followed other health care trends, namely the move to the ambulatory and community settings. Obviously driven by the desire to decrease overall cost, these changes also reflect the availability of expert oncologists and oncology nurses in the community setting. Clinical trials, once limited to the specialty hospitals and major cancer centers, are now possible in university- and community-based practices with participating physicians often providing some aspects of the care in a private office setting. The community-based practice can make a major contribution to clinical research; at the same time, providing a more cost-effective patient care setting. There are usually three costs attributed to clinical trials: (1) the administrative and data gathering

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Table 3. Oral Chemotherapy Coverage Requirements Under OBRA 1993 Drug Requirements Be prescribed by a physician or practitioner as an anticancer chemotherapeutic agent. Be a drug or biological that has been approved by the FDA. Have the same active ingredients as a non-selfadministrable drug or biological that is covered when furnished incident to a physician's services. The oral anticancer drug and the non-self-administrable drug must have the same chemical/generic name as indicated by the FDA's Approved Drug Product (orange book), Physician's Desk Reference (PDR), or another authoritative drug compendium. Be used for the same indication, including unlabeled uses, as the non-self-administrable version of the drug. Be reasonable and necessary for the individual patient.

Drugs Currently Included Cyclophosphamide. Etoposide. Methotrexate. Melphalan.

ProvidersApprovedto Dispense Pharmacies.* Physicians {if they have the authority to dispense under state pharmacy laws).* Institutional providers (hospitals, skilled nursing facilities, home health care agencies, and hospice programs).

* Physicians and pharmacies must have valid Medicare supplier billing number to be eligible to receive payment.

costs; (2) the specific and unique costs of the drug and tests/procedures unique to the study project; and (4) the cost of the clinical care of the patient. Traditionally the first two categories have been supported by the institution or group sponsoring the trial. Less clear and more troublesome is the patient care or "associated costs" of clinical research. As previously reviewed, most third-party payers exclude "payment for experimental unproven methods." Many insurance companies view clinical trials as "experimental and unproven" and deny payment for the usual medical costs associated with the treatment. At a time when clinical research is at a particularly promising point--when community and private practices have committed to research through investment in such aspects as skilled staff and appropriate physical space, the ability to support this necessary structure is threatened by the lack of reimbursement. Yasko described the current dilemma as "the greatest challenge looming before cancer care professionals." "The cycle continues: with the need for new therapies, the need to demonstrate that a therapy is effective for reimbursement to occur, and the inability to demonstrate patient outcomes because patients cannot afford to participate in the research that has the potential to reach useful conclusions. ''7 The threat of decreased reimbursement for clinical trials and partieularly the associated patient care costs is generating serious concerns within oncology and is an issue of national debate. The growing denials and the associated publicity brought on by the emergent and increasingly vocal patient activist groups

has brought the issue out of academic and professional circles to the level of public and legislative inquiry. Growing concern over the lack of reimbursement for investigational therapy has fueled coalitions and professional organizations including the Institute of Medicine, The American Society of Clinical Oncology, and the Association of Community Cancer Centers to support, educate, and work toward assuring reimbursement for clinical trials. 8 Critical to the solution is the education of both legislators and insurance companies as to the standard of care in oncology and the expanded use of the ambulatory setting as the treatment for investigational treatment regimens.

Office Setting The cost and billing issues of drug therapy pertain to all oncology care settings. However, they are felt most intensely in the private office setting. It is in this setting, without the "layers" of staffs and departments usually present in any hospital struciure, that the clinician must reconcile the dilemma of how to provide "state-of-the-art treatment" in the face of questionable reimbursement. Office-based oncology nurses must help ease the distress of patients and families that must make choices based in part by financial constraints. Likewise, few buffers exist between the physician/ nurse owners of the private practice and the overhead costs of drug inventory, treatment rooms, and clinical and business staffs. It is often the clinician who must gather the information necessary to obtain reimbursement in the difficult situations just described. Although this is often successful, the

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magnitude of the problem makes severe time demands on the clinician because time is spent on billing rather than on direct patient care. REIMBURSEMENT STRATEGIES

The economic issues related to patient care and treatment are integral to the oncology nurses professional role. For the hospital-based nurse this may mean assisting and educating patients to negotiate with representatives of their insurance plans. Patients have a need and responsibility to be informed of the financial issues related to their cancer treatment, particularly if it involves investigational therapy. They generally assume that their insurance covers any therapy they need and are frequently frightened and angry to discover that this is not the case. Grassroots efforts have increased with such national groups as CAN ACT being formed by patients to put pressure on both private payers and legislators to develop and maintain a system of payment that ensures access to state-of-the-art care for the treatment of cancer as well as funding for ongoing research. For office-based oncology nurses, the involvement with reimbursement issues is often more direct. In many practices, the clinical nurse is also the "purchasing agent" and "inventory manager" for drugs and medical supplies and is thus aware of the current drug and supply cost. This same nurse meets regularly with the drug company representatives and is aware of the drug companysponsored reimbursement services. In all practice settings the nurse has a thorough understanding of the special skills, services, time, and equipment required to administer a given therapy, as well as the predictable need and care requirements of the patients receiving it.9 A clear role exists for nurses to help their practices accurately and thoroughly determine costs and allocate these costs to the most appropriate Medicare CPT category. In addition, office-based oncology nurses can pursue various strategies to help their patients and practices obtain reimbursement and to overcome specific obstacles regarding the ambulatory care setting and investigational therapies (Table 4). This can best be accomplished through collaboration between the managing partner, the office manager, and the nurse. In today's health care environment, the necessary attention to reimbursement issues can cloud a

Table 4. Strategies for Obtaining Reimbursement 1. Accurately and thoroughly identify costs and allocate them to the most appropriate CPT code. Determine cost of drugs and medical supplies. Determine costs of administering therapy (time, special skills, services and equipment, patient care, and other requirements of each therapy). 2. Advise, inform, and educate third-party payers on the appropriateness and necessity of newest modalities. In general, contact case managers, state Medicare directors, medical directors, In individual cases, help document the scientific data, clinical outcomes, and cost benefits supporting a treatment decision. 3. Participate with professional societies to set standards of care that differentiate between state-of-the-art and experimental therapy.

practitioner's focus on clinical and patient care issues. Although the nurse can make a critical contribution to the economic and reimbursement policies of a practice, a critical awareness must be maintained that the nurse's role is advisory with a focus on patient care issues. When the reverse becomes true, the nurse and the practice must make the conscious decision to change from a clinical position to that of a billing position. Many offices have currently implemented distinct insurance/ billing staff and clinical staff. This is clearly the result of the increased time and billing specific knowledge that are required to maintain a successful practice in today's health care/reimbursement environment. One example that demonstrates the importance of collaborative effort is the reimbursement appeals process. Even the most efficient billing departments are often stymied by an insurance denial. It is useful to remember the decentralized nature of the health industry that results in inconsistent coverage policies, lo Even Medicare, a national program, suffers from inconsistent coverage policies. This occurs because local intermediaries are allowed to determine coverage. An insurance denial often results from incomplete filing of the claim, which can be Table S. Common Reasons for Reimbursement Denials 9 Incorrect billing (CPT) code, 9 Use of drug therapy that is not yet approved for the diagnosis under which the billing is submitted. 9 Insufficient documentation. 9 Complicated coverage and payment issues related to the use of an investigational drug. 9 Services related to the administration of complex chemotherapy regimens.

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REIMBURSEMENT'S IMPACT ON AMBULATORY ONCOLOGY Table 6. Documentation to Support Reimbursement Claims 9 Written documentation and/or medical records that provide the rationale for the prescribed therapy--justify the medical necessity. 9 Written documentation (chart review) that describes the elements of the billed service level. 9 Articles, preferably from "peer review journals," that support the use of drugs or biological agents for off-label use. Refer to major drug compendia, published articles, position papers from medical societies. 9 Letters from colleagues, experts' "second opinion" that establish that the treatment requested is "the standard of practice" for the particular patient.

simply remedied by the billing staff. Denials may be based on other issues (see Table 5) that require the involvement of the clinical staff to provide additional information (Table 6). The need for clarification often provides the necessary format through which one can negotiate the complex re-

imbursement issues associated with cancer therapy. CONCLUSION

Whatever else is true these days, change is something that is part of our professional being. Rules and regulations that govern reimbursement change frequently. However, diligence and patience most often bring about reasonable reimbursement. For now, and for the immediate future, the oncology nurse's role must include aspects of case manager, patient advocate, and educator. A clear and critical role is to educate, inform, and influence third-party payers, legislators, and employers--both about the essence of oncology and the role of oncology nurses. Oncology nurses have the skills to meet the current challenges of reimbursement and to help shape health care reform in a way that is favorable to oncology care.

REFERENCES 1. Baird SB, Mortenson LE: Economic concerns in the changing health care delivery system. Cancer 65:766-769, 1990 2. Mittelstadt PC: Federal reimbursement of advanced practice nurses empowers the profession. Nurse Pract 18:43-49, 1993 3. Griffiths HM, Fonteyn ME: Let's set the payment record straight . . . payment reform decisions. Am J Nuts 89:10511058, 1989 4. Feldstein P: Health Care Economics (ed 4), Albany NY, Delmar, 1993 5. Eckholm E: Solving America's Health-Care Crisis. Times Books, 1993

6. Inglehart JK: The political contest over health care reforms. N Engl J Med 316:639-644, 1987 7. Yasko J: Reimbursement of biotherapy: Present status, future directions. Semin Oncol Nurs 8:2, 1992 (suppl 1) 8. Freidman M, McCabe M: Commentary--Assigning costs associated with therapeutic oncology research; a modest proposal. J Natl Cancer Inst 84:760-763, 1992 9. Xistris D: Reimbursement of biotherapy: Present status, future directions--Perspectives of the office-based oncology nurse. Semin Oncol Nurs 8:8-12, 1992 (suppl 1) 10. McCabe MS: Reimbursement of biotherapy: Present status, future direction--Perspectives of the hospital based oncology nurse. Semin Oncol Nurs 8:3-7, 1992 (suppl 1)