Do reimbursement trends signal another Dr. Lupron moment?

"In the short to medium term, many urology practices are facing a tidal wave of increasing costs and decreasing revenue, which unless appropriate steps are taken, could cause significant financial problems in the future," writes Henry Rosevear, MD.

Dr. Rosevear is a urologist in community practice in Colorado Springs, CO. Urology Times blogs present opinions, advice, and news from urologists and other urology professionals. Opinions expressed by bloggers are their own, and do not necessarily reflect the views of Urology Times or its parent company, MultiMedia Healthcare.

All societies have myths-stories that are passed down from one generation to another, that at some point become so incredible when viewed through a modern eye that the younger generation hardly believes them.

In urology, one such myth is Dr. Lupron. Dr. Lupron was a great doctor. His specialty was metastatic prostate cancer, and he was a game changer. He was also very well reimbursed, and the joke went, "Why don't urologists work on Fridays? Because Dr. Lupron does.” At one point though, the big bad wolf came around and changed the reimbursement for Dr. Lupron and a lot of urology practices who had become too dependent on him fell into financial disrepair.

I am starting to wonder if urology is about to experience another Dr. Lupron moment.

Urology is still a great field, and I truly consider myself blessed to be a member. It is an aging field, though, with over half of all urologists over 55, according to the AUA Census, which means there will always be a job for us younger urologists. Further, the population is only getting older and we all know that our average patient is on the older end of the spectrum.

That being said, in the short to medium term, many urology practices are facing a tidal wave of increasing costs and decreasing revenue, which unless appropriate steps are taken, could cause significant financial problems in the future.

Let's start with the cost side. In 2015, when the government passed the Medicare Access and CHIP Reauthorization Act of 2015 (better known as MACRA) and put all medical practices on the path toward the Merit-based Incentive Payments System (also known as MIPS), many people I spoke with expected the government to treat this no differently than the old sustainable growth rate equation for Medicare and simply pass a "doctor fix" each year to prevent significant pay cuts from hitting doctors. That hasn’t happened, and while I'm certainly not walking the halls of Congress on a regular basis, I've heard no rumors about such a fix in the future either.

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Don't forget, the only alternative to MIPS is to join an alternative payment model (APM), of which there are precisely zero in urology. And when you realize that MIPS is curved and revenue neutral, meaning that even if your group scores a 98 out of 100, if everyone else gets a 99, you lose. And they win. This year the cut to Medicare reimbursement is 5% and by 2022 it will be 9%. Ask yourself, can your business survive a 9% cut to all Medicare-related reimbursements?

On the revenue side, it's no secret that over the last 20 years the pay that urologists receive for doing their job (the professional component of the bill) has not seen any increase. As a result, most groups aggressively pursued ancillary income streams such as dispensing advanced prostate cancer medications, intensity-modulated radiation therapy (IMRT), and extracorporeal shock wave Lithotripsy (ESWL) to name a but a few.

It only made sense that ESWL can and should be controlled by the doctor specifically trained to treat stones. The technology behind IMRT for prostate cancer has improved dramatically over the last few decades, and as the complications decreased and patients started asking about this option, the specialist specifically trained to treat prostate cancer should be able to discuss it. The same is true for dispensing advanced prostate cancer medications. I've heard some consultants say that up to one-third of all of our business is related to prostate cancer, so being able to provide these lifesaving drugs to our patients is not only vital, but simply good medicine. The fact that doing so was also good business was simply good luck.

But the times are changing. Let’s start with ESWL. CMS recently made a seemingly minor change in how ESWL is paid and as an unintended consequence, it’s possible that starting this year we will see a 22% reduction in payment for ESWL. (See the LUGPA response to CMS for the full story.) I ask, is your ESWL practice profitable after a 22% reduction in reimbursement?

Continue to the next page for more.The IMRT situation is equally troubling. It is no secret that since the early 2000s, the number of urology groups that own and operate their own IMRT has increased dramatically (Medicine [Baltimore] 2017; 9625: e6929). More recently, however, reimbursement for IMRT has been declining. Just as important, the recommended number of fractions is decreasing when reimbursement is on a per fraction basis and not a per patient basis. In the most recent NCCN guidelines on prostate cancer, table 1 of the Principles of Radiation Therapy shows that 60 Gy at 3 Gy per fraction could be considered equivalent to 80 Gy at 2 Gy per fraction. That is a reduction from 40 to 20 fractions. I ask, is your IMRT practice profitable at half the average daily number of patients?

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And how about those advanced prostate cancer drugs? Very appropriately, many urology groups started dispensing these lifesaving drugs and were well compensated for doing it. Compensation from dispensing drugs comes in two forms: the reimbursement for the actual drug and any rebate the drug company provides. There is legislative action to reduce the reimbursement on both fronts. A CMS report explains in great detail that, while the rebates have gone up over the last few years, those savings are not being passed on to CMS, according to a Policy & Medicine article.

Further, just look at the recent Senate hearing on drug pricing (see this article in The Atlantic) and ask yourself if these costs are sustainable. I’m not in a position to predict how reimbursement will change over the next few years, but I find it unlikely that reimbursement will go up.

There will always be a need for urologists. Of that I have no doubt. I simply fear that unless some smart businessperson can find a new source of revenue or a new business model for independent urologists, we are facing our generation’s Dr. Lupron moment.


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