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What's New
December 5, 2007
The Impact of Medicare
Reimbursement Changes on Hematology/Oncology Practices
In late
2006, the Centers for Medicare & Medicaid Services (CMS)
finalized the much-anticipated 2007 Physician Fee
Schedule (PFS), which included two major changes that
affected reimbursement. These Medicare PFS changes
have several distinct implications for compensation
planning and reimbursement for hematology/oncology
practices. On November 1, 2007, CMS released the
2008 PFS final rule. This article assesses the
impact of these reimbursement changes. |
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Cancer Programs
Cancer programs and service lines are at the forefront of healthcare
change in this country. While the population ages and the incidence
of people with cancer rises, legislative changes have decreased
hospital and physician payments for cancer therapies. Patients are becoming more intelligent consumers who choose
hospitals and physicians based on reputation, supportive services,
access to advanced treatments, and high-quality care. To be
successful in this environment, hospital and physician organizations
need to:
- Proactively manage within the complex and ever-changing clinical reimbursement environment.
- Look for ways to creatively affiliate or joint venture with one another to increase market share and achieve some economies of scale.
- Develop a more coordinated, customer-focused delivery
model, such as tumor-site specific programs or full-service
cancer centers, that will benefit both patients and
providers.
- Create a patient care model that is both efficient and cost-effective utilizing the appropriate mix of physicians and mid-level providers.
- Implement a physician model that maximizes efforts in the patient care, bench research, translational research, and clinical research areas.
- Ensure that a majority of their research effort is funded (through the National Cancer Institute [NCI] and
well balanced clinical trials program).
Our clients have benefited from a variety of cancer-related services, including:
- Cancer service line strategic/business planning and implementation.
- Creation of joint ventures and other affiliation options.
- Review of research structures and the financial
performance of clinical trials.
- Development of physician productivity metrics.
- Implementing multidisciplinary clinics and creating
comprehensive cancer programs
Examples of our experience in this area include:
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Selected Projects
- Developing strategic and business plans for a comprehensive cancer center.
ECG assisted a cancer center in the development of a 5-year strategic plan. By working with a faculty advisory committee and over a dozen issue-specific work groups, the final strategic plan included a revised vision and mission statement for the organization, an assessment of internal and external environments, the identification of
four major strategic directions, and the development of 50 goals and over 140 specific initiatives that are to be implemented in support of the strategic directions. A sensitivity analysis was also performed, outlining the financial position over the next 5-year period that included a conservative, moderate, and aggressive outlook on the local, state, and national comprehensive cancer center environment.
- Developing an NCI-designated cancer center.
ECG is assisting a cancer center planning committee to develop a comprehensive stand-alone cancer hospital. We are currently working with the committee to develop a detailed business plan that includes a range of strategic planning areas such as program description; management organization, roles, responsibilities, and reporting relationships; market analysis and volume projections; physician and support staff estimates; facilities and capital requirements; and funds flow and financial projections. The conclusion of this assignment will demonstrate the business case for a stand-alone cancer hospital, which will be utilized in implementation.
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Evaluating options for developing business
relationships between health systems and medical
groups.
ECG
is assisting a healthcare system and a
medical oncology group in evaluating options
for developing a deeper business
relationship. The major objectives of
the project are to address the financial
concerns of the medical oncologists given
the pending changes in drug reimbursement
and evaluate alternative business
relationships for stabilizing the group and
growing cancer services.
- Negotiating affiliation agreements between physician practices and hospitals.
ECG assisted a cancer research center in the development of an affiliation agreement with the school of medicine, the medical center, and a children’s medical center. The agreement out-lined specific affiliation arrangements and responsibilities, fellowships, training grants, and research grants. The affiliation agreement documents the overall operating relationships that would enhance the image of all institutions involved, facilitate the recruitment and retention of high-quality professional staff, and contribute significantly to the cost-effectiveness of patient care, medical education, and research programs.
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