Highmark now will reimburse by procedure, not location

It's time to rationalize medical payments

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As a practicing physician for decades, I welcomed the opportunity to help improve the quality of life for individual patients. Now, as a physician executive for a health insurance plan, I am able to touch thousands of patients’ lives by helping affect the quality and cost of their care and creating more value for the dollars they spend on health care. Scanning today’s health care landscape though, I’m troubled that the cost of care doesn’t correlate to the quality of care patients are receiving. As a consumer, you can be served better.

Higher-quality care should cost less if processes are streamlined, recommended care pathways are followed, financial incentives are aligned and pricing is rational. Problems with poor quality and excessive cost abound.

I am particularly alarmed by the irrational pricing of oncology care. The recent Pittsburgh Post-Gazette article about the inexplicable cost of oncology drugs (“Hospital Charges Can Vary Widely,” Feb. 16) underscores my concern, and it is time to intervene.

Highmark is taking measures to make sure our members battling cancer don’t pay more than they should have to for their treatment. We can save millions of dollars for members without compromising their care.

During the past several years, many cancer patients in Western Pennsylvania have been paying much more for their infusion chemotherapy treatment than they should. Why?

It’s because several Western Pennsylvania health systems changed their billing practices so chemotherapy treatment is billed as a higher-cost hospital outpatient service even though treatment continues to be administered in the same setting — a physician’s office. As a result, these distorted billing practices are costing tens of millions of dollars in excess of what was paid previously without additional clinical benefit. It’s not right, and it needs to change.

For example, we’ve learned that for one specific patient, the cost of treatment increased from $10,000 to $32,000 and that the member’s portion of that bill increased from $1,000 to $3,200 without any change in the physical location of the infusion and no change in the drug used.

Irrational billing practices aren’t unique to our region. They can be found in health-care settings around the country. In fact, a 2013 report from the Medicare Payment Advisory Commission pointed out that Medicare payments in 2011 were $1.5 billion higher for physician office visits and echocardiograms when services were billed as hospital outpatient services even when they were delivered in a physician’s office.

In Western Pennsylvania, patients, public officials and the public at-large have been adamant that health insurers such as Highmark should address these costly billing practices while also maintaining high-quality care.

Beginning immediately, Highmark is putting in place policies that will eliminate the financial incentive of these practices and save our members money. We estimate that these actions will save an estimated $200 million annually without limiting access to appropriate chemotherapy and with no impact on quality patient care.

The change to the infusion-fee schedule does not mean a change in covered services; Highmark will continue to reimburse providers for ambulatory oncology-related services performed at hospital outpatient facilities, including the administration of oncology drugs, but changing the price of the oncology drug based on the setting of care will no longer be tolerated.

This step is an important one to begin correcting inequitable and artificial billing procedures. We intend to continue to move toward aligning incentives so that we will reimburse physicians more for better outcomes and higher patient satisfaction, rather than simply paying for delivering more services or for changing provider billing practices to increase revenue. Progressive-thinking physicians understand this is the right thing to do for the health and well-being of patients and the community at-large.

All of us at Highmark take seriously our commitment to Western Pennsylvanians. Through a collaborative approach and an emphasis on value, we can provide the best possible care for our community at lower cost.

Donald R. Fischer, a pediatric cardiologist, is chief medical officer for Highmark Blue Cross Blue Shield.

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