Independent Health has told about 560 members who receive cancer treatment from CCS Oncology that it is dropping the region’s second-largest oncology group from its network come Jan. 1.
That means those patients face the choice of finding a new cancer doctor, or paying far more for their care.
The Independent Health decision follows more than 18 months of negotiations over the insurer’s attempts to rein in spending at the provider.
This is part of an industrywide battle, with Independent Health and other insurers trying to move away from reimbursing providers for each treatment session or drug used and toward a system that rewards physicians, hospitals and other providers for value and outcomes. That’s a trend nationwide as commercial payers and governments confront rising health care costs.
The conflict between CCS Oncology and Independent Health highlights the tension that arises as payers seek to change the reimbursement model while providers seek to protect a system that pays more for higher volume.
That strain also plays out when health insurers seek to offer narrow-network plans. Locally, BlueCross BlueShield of Western New York in the fall of 2014 engaged in a public feud with Catholic Health over a Medicare Advantage plan, offered by BlueCross BlueShield, that excluded non-emergency treatment at the system’s hospitals.
“We’re in a time of enormous flux for how health care is paid for,” said Dr. Nancy H. Nielsen, senior associate dean for health policy at the University at Buffalo’s Jacobs School of Medicine and Biomedical Sciences and a former president of the American Medical Association. Nielsen worked at Independent Health for 10 years, most recently as chief medical officer, before leaving in 2007.
Independent Health said other oncology practices have agreed to change to a value-based reimbursement model but CCS Oncology would not.
“We’ve had good engagement with providers,” said Dr. Thomas J. Foels, Independent Health’s chief medical officer.
But Dr. W. Sam Yi said Independent Health relied on a flawed analysis to conclude CCS’ oncologists charged more for cancer treatments than other practices in the region.
“This is not the right way to reduce the cost of health care,” said Yi, who is the CEO and executive medical director of CCS Oncology. “And cancer patients are going to suffer.”
Independent Health produced three analyses of cancer care in the region between 2014 and this year, Yi said. All found CCS was more expensive, to varying degrees, than the other oncology providers, but CCS objected to the findings, Yi said.
Foels confirmed Independent Health relied on analyses to bolster its shift to a new reimbursement model, but the insurer declined to comment on Yi’s characterizations of the data.
“This has become industry standard,” Foels said.
Yi said all oncologists in the region follow the same national guidelines, so there shouldn’t be much variation at all in the cost of care among the different providers in the area.
“Nothing’s wrong with our oncologists,” Yi said.
Yi said the insurer proposed cutting, or withholding, a portion of CCS’ reimbursements for oncology services, but CCS objected and Independent Health never followed through.
However, Independent Health in mid-June sent letters to CCS’ 22 oncologists, informing them the insurer would not renew their status as in-network providers as of Jan. 1, Yi said. Independent Health also informed CCS patients, employers and insurance brokers of this planned change in status. The decision does not affect the 51 doctors in the umbrella CCS Healthcare organization, which provides other medical services.
The decision applies to patients who receive insurance through an employer, through an individual plan and through Medicare Advantage. The practice can appeal the decision on behalf of its Medicare Advantage members, Yi said.
The roughly 560 Independent Health members make up 30 percent to 40 percent of the practice’s oncology patients, Yi said. He would not say how much revenue they account for.
CCS Oncology is weighing its options, including legal action against Independent Health. “They need to be held accountable,” Yi said.
Independent Health’s Foels said the decision had nothing to do with concerns about the quality of service at CCS.
He said the insurer has never before removed a provider from its network because the practice declined to agree to a value-based model.
“We don’t take this decision lightly,” Foels said.
The insurer said it has started working with CCS patients to help them find another oncologist. A statement from Independent Health mentioned Buffalo Medical Group, Cancer Care of WNY and Roswell Park Cancer Institute by name.
Independent Health also said it is giving CCS patients six months’ notice, instead of the required 90 days, out of an abundance of concern for them.
The patients could stay with CCS, but that is unlikely.
An in-network contract offers access to services at a deeply discounted cost to patients, who typically pay a co-pay or co-insurance and deductible. Some plans don’t offer any out-of-network coverage. Plans that do would include a requirement that the member pay a larger percentage of the cost of the care, and a problem for patients is that it’s hard to find out what that cost is, Nielsen said.
Is this just a negotiating tactic by the insurer to convince CCS to accept its terms?
Nielsen said that’s unlikely, because the decision letters have already gone out to patients and the insurer said it already is working with them to find new oncologists.
She said government and private payers are seeking innovative ways to reform the reimbursement model.
Cancer care is on the frontlines because of its expense, as individual courses of a chemotherapy drug can cost tens or hundreds of thousands of dollars. The National Institutes of Health estimated cancer spending totaled $125 billion in 2010 and was projected to reach between $158 billion and as much as $207 billion by 2020.
The question of quality has to be part of any discussion, she said, because if there’s a difference in cost then there should be a difference in outcomes.
“I think there is going to be an increasing search for, in quotes, ‘value,’ ” Nielsen said.
CCS Oncology has set up a hotline for its Independent Health patients to call if they have any questions about the change in status. The number is 932-7779 and it is staffed from 9 a.m. to 5 p.m., Monday through Friday.