Robert A. Dowling, MD

Dr. Dowling is president of Dowling Medical Director Services, a private health care consulting firm specializing in quality improvement, clinical informatics, and health care policy affecting specialty care. He is the former medical director of a large, 

Growth in drug costs and spending for Medicare beneficiaries continues to be an area of concern for patients, policy makers, and regulators. In an article last year,1 I reported that for 7 of 16 drugs commonly administered in the office by urologists, spending increased faster than Part B drug spending overall. There have been no significant regulatory changes that have directly affected Medicare Part B drug policy in 2019. In this article, I update the spending and costs for Medicare Part B drugs commonly used by urologists in the office setting.

The Centers for Medicare & Medicaid Services recently released detailed drug spending data for the years 2014-2018 (Medicare Part B Drug Spending Dashboard. Centers for Medicare & Medicaid Services. December 17, 2019. Accessed May 11, 2020. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/MedicarePartB.html). “Spending” in this context includes the estimated total costs including deductible, coinsurance, and Medicare spending. Total spending in 2018 for the Part B program was $33.3 billion, up 9.3% from 2017. Spending on any single drug may increase because of increased utilization, increased price, or both. Let’s take a closer look at some individual drugs that urologists typically use in their practice (it is not possible using these data to determine what fraction of spending is “ordered” by urologists, or the indication for any individual drug).

Of 17 common drugs used in the urology office for Medicare beneficiaries 

 the drug with the largest 2018 total spent was denosumab ($1.42 billion). In 2018, utilization for denosumab increased 12.4%, spending per dose increased 1.79%, and total spending increased 14.39% compared with 2017. Denosumab spending has increased 4.53% per year over the past 5 years and continues to be the target of automated medical review in some areas of the country.

The drug with the largest annual growth in spending per dose unit among this selected group is mitomycin (54.18% annual growth over the past 5 years); spending per dose on mitomycin increased 13.4% in 2018 alone. Although overall usage of mitomycin and gemcitabine (Gemzar) declined in 2018 compared with 2017, the impact of the recent bacillus Calmette-Guérin shortage will probably result in greater utilization of mitomycin and gemcitabine in 2019 reports.

Among the same set of drugs, spending on onabotA was $348 million, up 7.1% over 2017 and due primarily to increased utilization. The annualized growth in spending/dose (a surrogate for price) for onabotA has been just 1.7% over the past 5 years.

, leuprolide acetate was still the most common drug with spending in 2018 of $272 million (1.7% higher than 2017). Over the last 5 years, growth in spending per dose has decreased 1.3% annually. Spending on triptorelin pamoate decreased sharply (26%) in 2018, whereas the price of goserelin (Zoladex) rose almost 16%, increasing spending on that drug by 3.8% over 2017.

In general, among these 17 drugs, those with 1 or 2 manufacturers have seen higher annual growth in spending per dose (a surrogate for price) and those with 3 or more manufacturers have seen lower or negative annual growth. Mitomycin is the notable exception to this rule as mentioned earlier.

The bottom line: of 17 Part B drugs commonly used by urologists, only 3 drugs increased in spending faster than Part B spending overall in 2018. The drug with the largest total spending is denosumab, and the drug with the largest annual growth in spending per dose over the last 5 years is mitomycin (54.2%). Urologists should be familiar with the average sales price and trends of the common Medicare Part B drugs administered to their patients.

1. Dowling, Robert A. CMS data reveal trends in Part B drug spending. 

Articles

Mitomycin sees the largest annual growth in spending per dose over the past 5 years, Robert A. Dowling, MD, reports.

Denosumab tops spending for common urology Part B drugs

In a previous column, “Disaster preparation: Make sure your practice is ready” (December 2018, p. 37), I wrote: “Natural disasters serve as a reminder that most urology practices are small businesses and should have a basic plan in place for dealing with events that cause the temporary or permanent closure of the office. Your plan should address the needs of patients, staff, providers, and the business. Benjamin Franklin said, ‘By failing to prepare, you are preparing to fail.’ While the chances are small you will face a natural disaster, preparation is your best defense.”

Of course, I had no idea that 1 year later we would face a global pandemic that, as I write this article, has disproportionately affected the U.S. and has claimed some 25,000 U.S. lives as of mid-April. No medical practice could have anticipated the scale of this disruption, and it is likely that many small businesses will not survive. It is widely believed an economic recession awaits those businesses that do survive the next few months.

In this article, I will offer a possible vision of what urology practice could look like in the near and intermediate future, and why. I will also share several lessons for urology practices that have come out of the present situation.

Cancelation, postponement of elective procedures

In early March 2020, the U.S. Centers for Disease Control and Prevention, many specialty societies, and many state governors called for canceling or postponing elective procedures, surgeries, and non-urgent outpatient visits. The initial rationale for these recommendations was to preserve valuable resources, but as the virus spread through communities, the broader concern focused on not exposing people to each other and “flattening the curve” of patients requiring those precious resources.

Niche urology practices that have focused primarily or entirely on elective care (vasectomy, erectile dysfunction, uncomplicated BPH) will be significantly impacted. Other practices that have not pursued an intentional strategy may have never understood until recently exactly how much of their practice involved elective, non-urgent care.

While the definition of elective is obvious in some cases, there has been considerable debate as to what other procedures or visits can be postponed without jeopardizing the health of the patient. Prostatectomy for intermediate-risk prostate cancer? A routine visit for active surveillance? A visit for a patient on intermittent androgen deprivation therapy?

We don’t know the answers to these questions because, generally, these types of procedures are scheduled according to personal habits or loose guidelines, not a firm knowledge of the impact of delay. The first major lesson of this crisis is that practices will develop a clearer understanding of what proportion of their business depends on truly elective, semi-urgent, and truly urgent presenting problems, and thus how vulnerable they are to a persistent economic recession. That understanding may guide a strategy for diversification of the business.

Similarly, urology practices tend to think of their business as divided into new patients and established patients. Mature practices may be full of established patients who come in for their “annual visit”; at the other end of the spectrum is the young practice where almost every patient is “new.”

In general, new patients have problems requiring diagnostic evaluation and treatment-bigger sources of revenue for a practice than well-established patients. Some practices are intentional in creating and maintaining a balance of new versus established patients, discharging enough patients in a clinically appropriate way to make room for new patients. The second major lesson of this crisis is that a practice full of annual established patient visits is vulnerable to disruption and that the true value of a practice is to the patient with new and/or acute problems that can only be addressed by a urologist. This understanding may inform a review of your own control over the practice and whether there is an opportunity to restrike the balance of patients.

Urologists may also categorize their skills, and thus their practice, as cognitive and procedural; indeed, this mix of medicine and surgery is often what attracts physicians to the specialty. It is a diversification that may also serve to temper the disruption of the current crisis.

The Centers for Medicare & Medicaid Services (CMS) has issued several waivers and other flexibilities to address the public health emergency. Notable among these changes are those that expand access to telehealth for patients and their providers. Many commercial payers have followed suit, though each with slightly different rules for conducting and billing for the visit. This represents a lifeline for the cognitive side of the urology practice. Many new and established patient visits can now be conducted with the patient and the physician remote from each other using interactive audiovisual technology, in many cases for the same reimbursement as if patient and provider were face to face.

Adoption of this interim solution has been rapid, even as the bugs are still being worked out. The third major lesson of this crisis is that many patients and their problems can be adequately assessed and treated without the need to physically touch the patient. This disruptive innovation is likely to forever change the urology practice, if the flexibilities and reimbursement rules become permanent. The urology office of the future may be primarily designed, built, and operated for the procedural aspects of care, resembling an ambulatory surgery center more than a traditional office. The term “office visit” may be replaced by “tele home visit” as patients come to expect this new normal.

Transitioning staff to ‘remote’ status

Finally, the national efforts to address the public health emergency have resulted in a surge of “remote” workers in the patient care field. It is now apparent that schedulers, call center employees, billing personnel, administrative staff, and even providers do not necessarily need to be in the office to do their jobs in a urology practice. The fourth major lesson of this crisis is that there are opportunities for efficiency and cost savings by transitioning employees to part- or full-time remote offices. The urology office of the future may have less square footage devoted to “the back office.”

Bottom line: One of the tools to deal with uncertainty is to see the possibilities. When the acute public health emergency is over and the future is more certain than it is today, the possibilities include having a practice that does not rely as heavily on elective visits and procedures, cultivates patients that truly need the skills of a urologist, thins out the unnecessary annual visits, and embraces virtual visits using modern technology.

Replacing office visits with virtual visits may become the new normal, writes Robert A. Dowling, MD.

Four lessons urology practices can learn from the pandemic

The shift from fee for service to value-based care and reimbursement may be happening faster than some physicians like and slower than most payers would like. While urologic care is estimated to comprise only 2% of the “health care spend” in the U.S., it may not logically follow that urologists will delay or escape the consequences of oversight, scrutiny, and policies of government and commercial payers.

The increased burden of preauthorization faced by many physician practices is but one sign that payers are watching the dollars closely. Another trend is the availability of your practice and physician data in the public domain. In this article, I will review the concept of “utilization review” in the modern context and describe how you can gain insights into how payers and other stakeholders view your own practice.

Utilization review in health care dates to the 1970s and was defined by Merriam-Webster then as “a critical evaluation of health care services provided to patients that is made especially for the purpose of controlling costs and monitoring quality of care.” The term evokes an image of a nurse, or an entire department, in a hospital poring over individual charts in the pursuit of reducing the cost of care in the hospital. Others may think of utilization review as a mechanism used by payers to systematically delay or deny care.

In the modern context, utilization review is more likely to be conducted by examining large data sets looking for service patterns, outliers, or comparisons to a benchmark that can help lead to better “value.”

One example familiar to many urologists is the American Board of Urology’s collection of practice logs from diplomates during the maintenance of certification process. According to the ABU’s website 

 “the practice logs allow the trustees to be certain that the Diplomate has a sufficient case load to maintain their skills. Most importantly we have the opportunity to provide feedback to the Diplomate.”

Another example is the publication of utilization and payment data by physician in the Medicare program 

 Medicare also publishes Part D prescriber data for individual physicians 

 and drug utilization and cost data. Commercial private payers have their own physician utilization data, though they do not usually publish it. Other companies collect pharmacy dispensing data, claims submission and remittance data, pharmaceutical sales data, and more-at the physician level. Many companies understand your utilization, payment, and prescribing data much more thoroughly than you might think.

How can you begin to understand your practice-as it is reflected in how much you “cost” those paying for the care-as well as these outside entities? The process begins with access to your claims data-something that almost all practice management systems allow in the application, with an inexpensive reporting module, by employing a third party with very basic database skills, or by using a commercial platform.

The next step that can be very helpful and save time is determining what question you would like to answer. For example, the data extracted for a review of procedures for stone surgery might be completely different than that needed for a comparison of physician in-office administration of injectable medications. By thinking through the purpose of your review and how you would act upon the results of that review, you can streamline the analysis, find your answers faster, and put that knowledge to work.

A common challenge in understanding utilization of health care services is comparing apples to apples. Building on the example of utilization of stone surgery, raw claims data are likely to show some physicians perform more surgery than others-perhaps by an order of magnitude (10 times) in a large practice. This information by itself is of limited use and needs to be calibrated to some reference common to the physicians being compared.

For example, the rate of stone surgery per unique patient with a diagnosis of a ureteral or renal stone might provide the necessary indexing to make a better comparison. The Quality Payment Program levels its comparisons of episode costs using risk adjustment. Commercial payers often index their utilization metrics simply to number of beneficiaries, and you can do the same.

Another challenge in using utilization data is finding a definition of average, normal range, or outlier for comparison-a benchmark. Benchmarking in health care can be internal to an organization (such as comparing physicians in one practice) or external to an organization (such as comparing your urology practice to hundreds of others across the country). Statistical methods used in benchmarking include comparisons to mean, median (the midpoint of data or 50th percentile), rank, or decile. Medicare’s Quality Payment Program uses deciles in the Quality, Cost, and Promoting Interoperability categories to determine relative performance.

The median or 50th percentile is often a better point of comparison than the mean in health care data, which may not always follow a “normal” distribution. Available sources for external benchmarking of claims data include Medical Group Management Association survey data 

 Medicare public use files mentioned earlier, the Quality Payment Program (limited at this point), and commercial platforms.

Perhaps the biggest challenge is once you understand your utilization data, you will need to decide what to do about it. Some decisions may be easy; if you have a large practice and a single outlier, your data and internal benchmarking may convince the outlier physician to examine and change their practice. Other decisions may be more difficult and require an external credible benchmark to support a crucial conversation. The larger that benchmark, the more closely you can understand the perspective of a large payer. The underlying premise for understanding and acting on your utilization data is the knowledge that this information is available, and being used, by the sources of revenue for your practice.

Bottom line: Your utilization data are widely available and understood by the federal government, commercial payers, and commercial data aggregators. Improving your literacy with your own data will position your practice to better face the challenges of value-based care and reimbursement.

"Many companies understand your utilization, payment, and prescribing data much more thoroughly than you might think," writes Robert A. Dowling, MD.

Utilization review data: How do payers view your practice?

The complexities of the Merit-based Incentive Payment System (MIPS) have prompted some physicians to claim they would rather absorb the penalties in Medicare payments than incur the costs of reporting under the program (

). Indeed, one of the most common questions I am asked is, “Is MIPS really worth it?”

Remember that MIPS is not “optional” for most contemporary urology practices that wish to participate in Medicare. If minimum patient volume, service volume, and charges are exceeded, clinicians are automatically subject to MIPS, unless they are a qualified participant in an advanced alternative payment model. (Few urologists are participating in an advanced payment model as of 2019). So the real question is what is the potential upside, downside, and cost of participation?

In this article, I will examine some of the things you need to know and understand in order to answer that question in your practice.

First, let’s do a short review of how Medicare payment adjustments work under MIPS. Beginning in 2020 and continuing until 2024, the Medicare Physician Fee Schedule conversion factor is frozen (0% adjustments) under MACRA; while individual CPT codes may be revalued each year, the only opportunity to see the basic fee unit go up (or down) is through an adjustment under MIPS. That adjustment is determined by your MIPS Composite Score relative to certain thresholds that update each year and your relative performance to every other eligible clinician subject to MIPS.

CMS releases MIPS data; how does urology measure up?

Your score in any given year determines the payment adjustment 2 calendar years later. Payment adjustments are applied at the claim line level for professional services only (not drugs) and only on the Medicare payment amount (not the patient portion). For example, if your MIPS composite score was 95 in 2018, Medicare payment for 80% of an allowed charge of $100 line item would be adjusted up about 1.5% to $81.20.

MACRA and other pertinent laws require that payment adjustments under MIPS must be “budget neutral.” That means that any penalties (negative adjustments) projected to occur must be balanced by positive adjustments. Here is the key: Negative adjustments under MIPS are assigned on a linear scale between 0 and the maximum negative adjustment allowed under law for that particular year. Positive adjustments are also assigned on a sliding scale, but that scale is further adjusted by a scaling factor to be sure the projected positive adjustments do not exceed the negative adjustments 

In performance year 2 of MIPS (2018), the maximum negative adjustment was 5%, but because so many clinicians achieved positive scores, scaling had to be applied such that the maximum positive adjustment was only about 1.67% for a perfect MIPS composite score of 100. (This includes some adjustment for exceptional performance.) Results were similar in year 1 of MIPS.

The accompanying figure from the CY 2020 MPFS Final Rule (

) may make this a little easier to understand. In the current year 2020, a clinician must achieve a MIPS composite score of 45 to avoid a negative payment adjustment in 2022. A score of 30 would result in a –3% payment adjustment in 2022; a score of 20, a –5% adjustment; and a score of 0, a –9% adjustment. However, adjustments for scores over 45 cannot be determined until all of the projected penalties for negative adjustments are determined by actual results. Therein lies the uncertainty: The potential downside is clearer than the potential upside, according to the rules of the game as currently understood.

In order to calculate the cost of not participating in MIPS, one need only project the revenues for professional Medicare services for the year. For example, a mature, stable practice might have $400,000 in such revenue. The cost of ignoring MIPS altogether would be $36,000 (9%), a substantial penalty.

What about trying to just do the “easy” reporting to avoid some or all penalty? Quality reporting is without doubt the most time-intensive and complex part of the reporting burden for clinicians. What if you could just avoid that, which accounts for 45/100 points in 2020? The main problem with this approach is that you will have to score almost perfectly in the Promoting Interoperability category (25% weight) and the Improvement Activities category (15% weight), and do reasonably well in the Cost category (15% weight) to meet or exceed 45 points.

The Cost category is based on data that are not currently available to you (and there is no reporting burden/cost), so your only predictor of “success,” perhaps, is past performance. Furthermore, the threshold for 0 adjustment and the weight of the Cost category are increasing each year, leading to more uncertainty in the ability to predict your MIPS score in real time. Taken together, ignoring the entire Quality category may be a risky strategy in 2020 and beyond.

What is the cost of participating fully in MIPS, and is it offset by the upside? In our same example, a 1% positive fee schedule adjustment-$4,000-may not seem like much annual gross revenue. MIPS participation costs over and above baseline overhead might include: paying a consultant or EHR vendor for turnkey services (data collection and submission)-typically much less than $4,000/provider, registry fees (typically a few hundred per provider), paying an internal resource, and intangible costs like data entry (clinical staff and physicians) and tracking solely to support MIPS.

Again, most of these costs pertain to the Quality category and your experience will vary tremendously based upon your EHR vendor’s ability/willingness to create reports, export data, or communicate with qualified clinical data registries. Economies of scale are important, and large groups are better positioned to reduce the costs of participation/provider. Small practices may wish to investigate “virtual groups,” a relatively new option in MIPS designed to allow disparate practices to achieve economies of scale.

How MIPS Cost category changes will affect urologists

With respect to the intangible burden of “data entry,” MIPS is simply an intermediate version of value-based care, the central paradigm of which is to improve quality and reduce cost. If your providers are having to click boxes in the EHR to document quality or your billing staff is applying G codes on claims, there may be an opportunity to reexamine their work flow to eliminate redundant work, or even take a fresh look at a newer EHR. Value-based care is probably here to stay, and the next generation of documentation should passively contribute to quality metrics, with minimal special effort by the user to separately comply with a government program.

Bottom line: There is now and for the foreseeable future a 9% negative fee schedule adjustment for practices that ignore MIPS because “it isn’t worth it.” While the costs of participation may offset or exceed the potential revenue increase in a small practice, these costs of data collection and reporting are the new normal in a value-based reimbursement paradigm and are likely to become the cost of doing business even outside of Medicare.

"Ignoring the entire Quality category may be a risky strategy in 2020 and beyond," warns Robert A. Dowling, MD.

Author | Robert A. Dowling, MD

Articles

Denosumab tops spending for common urology Part B drugs

Four lessons urology practices can learn from the pandemic

Utilization review data: How do payers view your practice?

Can you afford to avoid MIPS participation?