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Read the bottom line: Eye doctors, Independent Health clash over drug costs

Retina specialists are seeing red after a major health insurer told them they could be penalized next year if they too often use $2,000-a-dose brand name drugs to treat an eye disease instead of an off-label drug that runs about $50 a dose.

Independent Health told eye specialists in October it wants them to use off-label Avastin when treating at least 60 percent of patients with wet macular degeneration, instead of two similar drugs specifically designed to keep the debilitating condition at bay.

Practices in which even one doctor uses the more expensive drugs too often would stand to lose 15 percent in reimbursements for all the work they bill to the second-largest regional health insurer.

"They’re asking us to play God,” said Dr. Gareth Lema, a Buffalo eye surgeon whose two-doctor practice was told by letter that Lema wasn’t meeting the desired threshold for Avastin use.

Analytics and metrics are increasingly being used in the health field to measure how groups of medical specialists handle common health conditions.

Independent Health started to crunch data five years ago to weigh quality and cost of care provided by specialists. Its letter to eye specialists about a "potential fee schedule reduction" was the first time an insurer in the region — and possibly the nation — threatened to penalize doctors financially who don't fall in line with a median standard of care derived by such data comparisons.

"Within the first line, they say their policy is to 'promote the most cost-effective treatment for macular degeneration' — and nothing about patient-centered care or promoting better clinical outcomes,” Lema said. "It really was, in my opinion, a means to ration care on cost alone."

Independent Health revised the potential policy for 2019 after hearing from eye doctors. It will instead ask the specialists to start all treatment regimens with Avastin to gauge its effectiveness — a step other insurers have begun to take across the country — and decide with physicians on a case-by-case basis whether the costlier drugs are necessary.

The insurer, which also heard from state lawmakers and professional medical associations, will exempt practices from the fee adjustments "based on their plans to address clinical variances and issues related to the overall cost and effectiveness of care," said Dr. Thomas Foels, chief medical officer with the Amherst company.

Foels also stressed that other specialists may see adjustments going forward as insurers try to limit more costly treatment preferences of “outlier” doctors who have too little regard for drug costs shouldered by all patients, insurers and taxpayers.

Those who fall below thresholds established by their peers "are not setting themselves up for success in the new health care world,” he said. “They're not doing their patients a fiscal service, either. For some patients, out-of-pocket on these drugs is 20 percent of the costs."

A big problem

A vial containing the drug Eylea, which costs almost $2,000, sits alongside a hypodermic needle pre-filled by a compound pharmacist with another drug, Avastin, which costs about $50 per injection. (Derek Gee/Buffalo News)

Age-related macular degeneration is a chronic, progressive disease most common in those over age 50. A dry form often can be slowed with vitamins. The wet kind — a leading cause of blindness for those over 65 — results from blood vessels bleeding or secreting fluid into the eye that blur the field of vision and eventually leave those with the condition unable to see loved ones, drive, read or watch TV.

An estimated 8·4 million people across the globe deal with the most severe symptoms.

There were no treatments until three drugs began to emerge in the mid-2000s. Each is generally administered by injection into an impacted eye every four to eight weeks.

The price disparity between Avastin and two similar drugs — ranibizumab (brand name Lucentis) and aflibercept (Eylea) — have roiled the ophthalmology community since 2005, when a Miami eye surgeon, Dr. Philip Rosenfeld, discovered that Avastin could help treat wet macular degeneration.

That disparity: $300 to $24,000 each year.

Avastin is the oldest of the drugs, designed by the pharmaceutical giant Genentech, and approved by the federal Food and Drug Administration in 2004 as a chemotherapy drug to treat colon cancer. Rosenfeld and colleagues in South Florida soon learned that a tiny fraction of the amount to treat cancer also could be used to temporarily halt blood vessels from leaking into the eye.

Genentech, a San Francisco company, also created Lucentis, a brand-name drug specifically made to dry the eye in generally the same way as Avastin, but at roughly 50 times the cost. The FDA approved it to treat wet macular degeneration in 2006.

Eylea, created by Regeneron, was approved five years later to work much the same way, also at a much higher cost than the off-label drug.

The challenge for retina specialists and others who use the three drugs is that while they are similar, they are not the same — and different patients respond differently to them — said Dr. John Thompson, past president and chairman of health policy with the American Society of Retina Specialists.

Ophthalmologists and retina specialists often start all wet macular degeneration patients on Avastin for three to six months, to see how well it works. If they think patients will see better results on the costlier drugs, they move to them, said Thompson and two retina specialists in the region, including Lema.

Eylea and Lucentis are better at drying the retina, and their effects tend to last two to four weeks longer.

"Obviously, patients don't like having needles stuck in their eye,” Thompson said, “so the Independent Health policy also means that patients would have to get more frequent injections."

Doctors with patients from poorer communities, who tend to wait longer for treatment and can have more serious cases, would be unfairly penalized by the potential policy, he said. So, too, would patients at higher risk of blood clots and stroke, because a greater amount of Avastin — designed as an intravenous drug but used as an eye injectable — has a greater tendency to leave the eye for the bloodstream.

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A challenge underlined

Several colleagues in Buffalo contacted Thompson after they received letters from Independent Health about the “potential fee schedule reduction.”

Thompson said the plan, as first laid out, is the most restrictive he has seen in his roles with the international association that represents more than 3,500 retina specialists.

"Having quotas may be appropriate for a car salesman but to apply this to medical care is just outrageous," he said. "Essentially what Independent Health is doing is trying to dictate medical care for patients they've never examined or never treated."

Retina specialists and Independent Health agree on one thing: Health care costs in the U.S. are out of control. Both blamed drug companies.

Federal law prohibits Medicare from negotiating drug prices with pharmaceutical companies — a practice that trickles down through private insurers and allows drug-makers essentially to set the cost of the products they make. President Trump and others have called on Congress to pass legislation that would change that dynamic.

Meanwhile, most insurance companies look to address the disparity in drug cost in other ways. Chief among them: preauthorization, essentially what Independent Health has now decided to do in most cases where Avastin is insufficient to treat wet macular degeneration.

"This way, you're allowing medical care to be individualized for the patient rather than have some blanket policy,” Thompson said.

Foels said other insurance companies also handle doctors who tend to use more brand name drugs by moving those physicians onto higher-cost tiers or out of their insurance network altogether.

More medical specialists are likely to see such dynamics play out, he said, as national health care continues to move from a fee-for-service model of care to a value-based model more focused on quality, cost-efficiency and a strategy to prevent needless tests and hospitalizations.

Independent Health and at least one other regional insurer will next year continue value-based payments started this year with primary care providers. The change pays more for providing quality care at a lower cost, including choosing specialists who tend to use less costly medications that are generally proven similarly effective to their more expensive counterparts.

Wide variance

Independent Health took its first deep data dive into specialty care in 2013, crunching numbers on the way cardiologists treat patients across the region, comparing their work with peers on benchmarks that included outcomes and costs. Analysts discovered a 40 percent variation in treatment patterns, Foels said.

The company more recently also crunched data on gastrointestinal, neurology, pulmonary and allergy specialists.

It has spent the last two years educating doctors to drive quality and efficiency — including encouraging primary care doctors to refer patients to specialists because of what they know and how they treat patients, not because of friendly personal connections they may have formed.

“In most part of our lives, we look for reliability,” the chief medical officer said.

Foels said federal officials tell Independent Health that the high cost of prescription drugs is the thorniest problem for a health care system where an estimated one-third of costs are tied up in unnecessary expenses. That sort of waste requires the insurer to look at a variety of ways to bring more efficiency, he said.

Independent Health started sharing medication data with eye specialists a couple of years ago to encourage Avastin as a first-line of treatment, said Marty Burruano, vice president of pharmacy services. The insurer raised the reimbursement for the drug to bring it more closely in line with reimbursements for the expensive drugs. Still, Burruano said, Medicare and most other insurers in the region — which account for 70 percent of reimbursement payments — have yet to follow suit, meaning that specialists receive higher reimbursements for the more expensive drugs.

Avastin is used 64 percent of the time by the 15 retina specialists in Western New York, though three or four of those doctors continue to fall outside the desired Independent Health 60-percent threshold, Burruano said.

"The distribution hasn't really changed much" after the effort to encourage new habits, Foels said.

Lucentis and Eylea are used on 36 percent of patients in the region, yet account for 95 percent of related drug costs borne by Independent Health.

That amounts to $1.5 to $2 million a year, said Foels.

"I don't think the pharmaceutical company that has margins of $30 billion a year is worried about this," he said.

Thompson and Lema encourage insurance companies to let doctors be doctors, and focus on the root of challenges in the system.

"We're not the ones who set the prices," Thompson said. "What Independent Health needs to do is speak with their state legislators and national legislators and try to get some sort of system in place where prices can't just keep going up and up and up."

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