Ophthalmology Management spoke to two practice administrators about how they handle anti-VEGF drugs in their clinic. Lucentis and Eylea are approved to treat wet AMD, Avastin is used off-label, but what impact do they have on a clinic? According to an article published on the AAO’s website in July 2015, Avastin (bevacizumab, Genentech) costs approximately $50 per treatment, due to its off-label use for wet AMD. However, Eylea (aflibercept, Regeneron) costs about $1,800 per treatment, and Lucentis (ranibizumab, Genentech) approximately $2,000. How should a practice handle the billing, storage and security of such a high-value item?
Albert Castillo has been an ophthalmology practice administrator for 17 years; he is the director of business and financial development for the San Antonio Eye Center, the executive director of South Texas Total Eye Care and the member services consultant for the Outpatient Ophthalmic Surgery Society.
Ophthalmology Management: What are some of the challenges your practice faces in managing anti-VEGF medications?
Albert Castillo: We have all the same challenges with this economic model: from cash flow to managing medications to making sure the practice is getting reimbursed. Avastin is the least expensive option for patients. The cost varies but is under $30. Medicare covers it, and for those with a single insurance Medicare they have a 20% copay. We never had a hard time getting reimbursed. In a lot of practices, it’s a first line of defense because it’s affordable to the patients and the practice, and it comes with very little financial risk.
The other injectable medications can range from $1,000 to $9,000 per injection in our area, so a 20% copay can be very costly for patients and may not be an option in some cases. The challenges we face with those more expensive drugs are two-fold.
If a patient has Medicare only, it’s a challenge trying to collect the 20% co-insurance upfront from the patients. If patients can’t afford to pay, drug companies all have different foundations and resources to help these patients.
One of our challenges with foundations, though, is they can have limited funds or resources to help — when those run out, it’s back to dealing with the patient.
OM: What are the logistics of payment?
AC: We order on a weekly basis — we anticipate the amount of drugs for the following week, place an order and they come in overnight.
Most insurances will reimburse for the drug within 30 days. All told, the reimbursement for our clinic can total hundreds of thousands a month. These payments have to be set aside to pay for medications when it is due 60 days later from the date ordered.
We use the PODIS inventory management system to help track our inventory as well as payments. It’s tied into our EMR and it can generate reports to ensure that a practice is indeed being paid properly for these medications.
OM: Do many patients skip paying their share?
AC: The entire process is set up so that a patient cannot skip their 20% insurance or copay when applicable. The process starts when a patient is scheduled for the medication. They are counseled on what their out-of-pocket cost is going to be, and we let them know to be prepared to pay that at check-in. If a patient cannot afford the medication, the paperwork is completed to begin the process for seeking help from the foundations to cover the cost of the medication or co-insurance.
If a patient has Medicare Advantage, they may not have a 20% co-insurance; however, they may have deductibles and or copays that will have to be paid. Usually this is less than the 20% co-insurance with traditional Medicare.
As you can see, systems from traditional Medicare, to Advantage plans, to commercial carriers can create quite the challenge in knowing what to collect from which patients and where to find them help when necessary.
OM: Can the practice lose money?
AC: The risk of losing money is great. Some examples of when you can lose money are when you don’t get authorizations from insurances that require one; if you aren’t collecting the co-insurance, copay or deductible from the patient; or if you are billing incorrectly.
One recent change a payer made is it has its own specialty pharmacy and all medications have to be ordered from this pharmacy. This has created more work; however, I prefer this method of obtaining medications for patients. In this case we schedule the patient and contact the pharmacy. The pharmacy then works out the financial details with the patient and collects from them. The pharmacy then ships us the medication to treat the patient. In this case the financial risk and burden are handled by the payer and pharmacy. I would prefer that all payers did this.
OM: Are there any special considerations for training?
AC: You have to make sure everyone on your staff understands what is at stake and that all steps are being followed and everything is correct prior to treating a patient. This goes for obtaining authorizations, to collecting from patients, or making sure they are all set with a foundation for financial assistance.
Training is critical because you are dealing with an expensive product. Staff realizes the importance when they order medications for a week, and they see 50 injections that cost $100,000, for example. That really opens their eyes. One mistake can cost a practice tens of thousands of dollars.
Shawn Harkey became chief operating officer of Retina Consultants of Houston in 2016, and previously served as the director of financial services for Texas Retina Associates for six years. He has worked in health-care administration since 2008.
Ophthalmology Management: How do you anticipate the quantity of anti-VEGF injections that Retina Consultants of Houston will need?
Shawn Harkey: RCH was the largest enroller and was part of many of the initial national clinical trials for anti-VEGF, so we’ve been using these medications for over 10 years now. Because of that, we have historical volume data to rely on, which helps us anticipate what we need to order at any given time. We resupply every 7 to 10 days and order overnight if we have to. It wouldn’t make sense for us to have several months’ worth since we’d be forced to pay the invoices of the drugs before actually using them.
There is a shelf life on these medicines. We use the PODIS inventory management system to help keep track of that. Once we scan a medicine into the system, the expiration dates are automatically tracked so we know to use it before a certain time.
OM: Have you seen demand for these drugs increase in recent years?
SH: We’re seeing the number of annual injections increase with the population getting older in general and the expansion of approved indications we can use the medication for. Many patients have to return every 4 to 12 weeks for subsequent injections. That regularity helps us plan for the amount of medication we’ll need.
OM: Do you ask your patients to fill out their insurance information ahead of time, so you know whether a specific anti-VEGF is covered by their provider?
SH: Absolutely — you have to today. We ask for that information when we schedule their appointments, if we don’t already have it. We definitely identify all patient’s insurance and any out-of-pocket portions before we inject the drug, because these medications are expensive. Health-care costs across the nation are increasing; we can’t run a business without knowing insurances and what the reimbursement is. We need to make sure we’re collecting what we can if we’re injecting these expensive drugs, otherwise you run the risk of losing revenue on each injection.
Reimbursements are very important for these medications, especially with already slim margins, if you don’t do everything right 100% of the time. We review a variety of financial reports on a regular basis as it is key for us to ensure we’re getting paid the contracted rate from insurance companies.
OM: Given that these drugs can be very expensive, are there any special precautions that you take to help secure or store them?
SH: We have one person dedicated to overseeing the medicine’s order. She devotes a large portion of her time to the entire inventory management process of all our drugs. We ship all the anti-VEGF orders to our main office locations and this person coordinates with the clinical manager on site to guarantee the drug is received and put into the refrigerator. We have to individually label and scan the drugs into our inventory management system. They are scanned out when used each time. That way, if we’ve ordered something and it doesn’t show up in the system, we know there’s a problem.
Having these extra dedicated staff and systems in place are added expenses but are precautions that are needed in today’s retina world.
A good inventory management system, and someone to oversee and manage it, definitely help with staff accountability. Also, they are important for keeping track of these drugs, especially with multiple physicians and locations. There can be a lot of variables in play with these expensive medications. OM