Medicare Part B payment cap will limit outpatient access to CAR-T
TThe revolutionary approach to treating cancer that prolongs life, known as CAR-T, is threatened by a daily source: policy proposals to limit Medicare reimbursement on an outpatient basis to the average selling price of the treatment plus a small surcharge for overhead.
Chimeric antigen receptor (CAR-T) T cell therapies have changed the landscape of cancer treatment. These one-time personalized treatments created from an individual’s own T cells represent a significant breakthrough in treatment. Expanding their use in all healthcare settings is critical to improving patient outcomes and quality of life.
The economic viability of CAR-T, however, could be constrained by proposals to limit reimbursement of Medicare when administered in outpatient settings, such as outpatient hospitals and specialist cancer centers, at retail price. average (ASP) of therapy plus an amount capped at $ 1,000 for most drugs and up to $ 2,000 for immunotherapies like CAR-T.
These additional amounts represent a substantial reduction in what facilities are currently reimbursed for providing a CAR-T patient. Medicare currently pays for therapies such as CAR-T at the average retail price plus a 4.3% margin to cover the costs associated with providing these therapies. Here is an example using Yescarta, a CAR-T therapy with an acquisition cost (list price) of $ 373,000: under the current rule of 4.3%, its top-up amount would be $ 16,000. The add-on cap at $ 2,000 represents an 8-fold decrease.
CAR-T therapies have historically been administered in certain hospitals – primarily academic centers – limiting where patients can access this therapy. Recent advances in improving the safety profiles of CAR-T therapies allow their administration on an outpatient basis. This change can improve patient access and be less costly for providers, patients and payers.
But the initial investment required to provide outpatient CAR-T is well over $ 1,000 to $ 2,000 per patient. As a result, many practices – especially small outpatient practices – face insurmountable economic barriers to administering CAR-T therapies if they cannot recoup the financial risks and expense.
Long before administering a CAR-T infusion to the first patient, setting up a program requires considerable expenses recruit, train and prepare staff; expand the facility; and to establish contracts with other suppliers and manufacturers. Unless Medicare covers these upfront capital costs and the ongoing costs of running a CAR-T program, many centers will decide not to adopt this therapy.
Changing the reimbursement policy can thus paradoxically limit access to CAR-T therapy among people covered by Medicare, a population in which cancers are most often identified.
Reimbursement of Part B of Medicare
Drugs administered in a doctor’s office, such as infusion or injection therapy, are covered under Part B of Medicare. As specified by the Health Insurance Modernization Act 2003, Medicare was to pay for Part B drugs at the average retail price plus a 6% margin to cover overhead associated with the provision and administration of these therapies.
In 2011, the Budgetary Control Law initiated spending cuts across the federal government and reduced the additional margin of 6% to 4.3%. Even this relatively moderate reduction in the amount of the mark-up has been associated with community oncology practice closures and increased consolidation in this sector. The effects of a modest reduction in the amount of the supplement are a harbinger of the impact that the more dramatic proposal to cap the supplement for CAR-T therapy at $ 2,000 could have.
CAR-T: An Example of High-Value Therapy Adoption Costs
CAR-T represents therapy with additional Part B costs that significantly exceed $ 1,000 to $ 2,000.
To start a CAR-T program, a hospital outpatient department or independent networked oncology site must hire or train staff for new clinical, administrative, and reporting obligations, including FDA obligations. Risk assessment and mitigation strategy programs (REMS). The REMS requirements differ by product, so a site administering various CAR-T therapies will have mandatory training of all staff involved on multiple REMS programs.
Once operational, the outpatient office must collect a patient’s T cells, prepare them for shipment (which may include cryopreservation), transport the product to the manufacturer, take care of the storage of the frozen cellular product, manage thawing of modified T cells. at the bedside and finally reinject CAR-T therapy into the recipient under close supervision.
The practice must also coordinate and contract with a variety of stakeholders, including local oncology offices for the ongoing care and follow-up of patients; manufacturers of pharmaceuticals for the purchase of CAR-T therapy and the transport of original and reconfigured cells from a patient; and hospital care systems and providers for the management of potential toxicities.
Firms may need to expand office space and hours of operation to accommodate dedicated observation rooms. They should also allow time and staffing capacity for possible manufacturing delays and side effects of therapy. Laboratory requirements for testing and monitoring patients are increasing. An outpatient treatment center should also store tocilizumab by FDA Mandated Rules for each patient treated, a relatively expensive and highly demanded therapy used to manage toxicity.
To quantify the costs involved in running a CAR-T program, we interviewed five experienced CAR-T providers, performed an analysis of Medicare claims on the Limited Data Set of 100% Standard Analytical Files for Ambulatory Patients 2019, and categorized the use of resources into fixed initial investments, ongoing program management and cell preparation. The estimated average total capital costs are shown in Table 1. The total average capital costs for a CAR-T cell therapy program were estimated at $ 889,531 and amounted to $ 1.6 million.
Table 1. Estimate of the provider’s average initial investment costs for an outpatient CAR-T cell therapy program
|Category||Construction, technology and logistics||New FTE Employees||Overtime among existing employees||Staff education and training||Arrangement management||Inventory of supportive therapies||Total costs|
|Estimated average cost (USD 2020)||$ 66,640||$ 793,565||$ 5,852||$ 6,483||$ 2,991||$ 14,000||$ 889,531|
We estimated that the average provider would have initial capital costs of approximately $ 2,500 per patient treated, with ongoing program management costs of approximately $ 10,000 per patient, as shown in Table 2. Many practices are expected to result in much higher costs.
Table 2. Estimated initial and ongoing costs of a CAR-T cell therapy program per patient treated *
|Costs per patient treated|
|Amortized initial investment (5 years)||$ 295||$ 690||$ 2,534||$ 8,887|
|Ongoing program management||$ 0||$ 6,689||$ 10,376||$ 34,824|
|Cell preparation||$ 1,146||$ 3,493||$ 3,195||$ 3,493|
|Total cost of investment and preparation of cells||$ 1,441||$ 10,872||$ 16,105||$ 47,204|
* To estimate costs per patient, an optimistic growth assumption that providers would treat 10 CAR-T patients per month over the next 5 years, on average, was used. This assumption underestimates the costs per patient because most providers will not treat as many patients in the short term.
In addition to these recognizable upfront costs, oncology practices incur several indirect costs for CAR-T programs, including the uncertainty of the resources needed for each patient and the amount, timing and reimbursement requirements for CAR-T. Reimbursement for these valuable therapies has also been less than in time, further straining the finances of ambulatory care centers attempting to provide CAR-T therapy.
Despite the strong improvements in cancer patient survival and remission associated with CAR-T therapies, their uptake among those covered by Medicare has been lower than expected, maybe due to insufficient reimbursement in a hospital environment. Another potential barrier is that CAR-T therapies have been offered mainly in medical centers with experience in clinical trials or stem cell transplantation. With the rapid expansion of indications for these interventions, the limited number of sites experienced in treating Medicare patients may not be sufficient to meet their demands.
If barriers to accessing CAR-T therapies persist, patients may deal with long journeys to reach a supplier. Outpatient administration has the potential to improve geographic and demographic equity by expanding access to sites closer to where patients live.
Policy for expanding access to ambulatory services
New CAR-T and other cellular immuno-oncology therapies are entering the market with improved safety profiles. These agents could be administered on an outpatient basis, along with other chemotherapy or immunotherapy agents, improving access and reducing costs. Policies to reduce Medicare Part B reimbursement, however, would make such an expansion difficult. And as private insurers often have follow the advice of health insurance, reimbursement decisions made for the federal program would likely have repercussions on the entire health care system.
Any changes to Part B reimbursement must balance political concerns about financial incentives while preserving – and expanding – access to new transformative treatments such as CAR-T in outpatient settings.
Richard Maziarz is a hematologist and director of the Blood and Marrow Transplantation and Cell Therapy Program at Oregon Health and Science University, where he is also a professor of medicine. Sophie Snyder is Managing Director of Qualia Bio. Maziarz declares to be an advisor or consultant for AlloVir, Artiva, CRISPR Therapeutics, CytoDyn, Incyte and Novartis; received honoraria from Bristol-Myers Squibb / Celgene, Incyte, Intellia, Gilead / Kite, Omeros and Orca BioSystems, and research support from BMS and Novartis; served on data and safety oversight committees for Athersys, Novartis and Vor Pharmaceuticals; and has a patent with Athersys.