Saving Money or Harming Patients? An Update on Brown Bagging
Oncology Issues, March/April 2003
Thomas Marsland, M.D., an oncologist who practices in Jacksonville, Fla., is angry. After prescribing the drug Neupogen‚ for one of his patients, he discovered that the patient’s insurance company practiced “brown bagging” (when an insurance company finds an inexpensive wholesale supplier of oncology drugs and has the supplier ship the drugs). This meant the insurer wouldn’t let Marsland dispense the medication from his practice pharmacy. Instead the company ordered the drug from its preferred supplier and insisted that the supplier deliver the drug directly to the patient’s home instead of to Marsland’s office.
Thanks to the delays caused by brown bagging, Marsland’s patient didn’t receive the drug until the first day of his therapy, which was too close for comfort as far as the doctor was concerned. In addition, the medication had been thrown into a sack instead of being placed in a temperature-buffering container to protect it from the weather. By the time the drug arrived on the patient’s doorstep it was useless, denatured by the Florida heat and no more active than sugar water.
As his patient became more ill, Marsland’s temper climbed. “This is all a product of brown bagging,” he said in frustration. “Most of the time insurers who are trying to brown bag do things right, but if they don’t, it’s deadly. When are insurance companies going to realize that they can kill people trying to save money this way!”
In particular, brown bagging describes what happens when the supplier ships the drugs at the behest of the insurance company, not to its physicians’ offices, but to pharmacies near subscribers or to their homes. The subscribers must pick up their medication from the pharmacy, or from off the doorstep, and carry it to their doctor’s office in a “brown bag.”
Many oncologists say brown bagging creates so many quality control and patient care problems it should be completely abandoned. For example, a supplier may send chemotherapy drugs directly to the patient by courier, with no guarantee of how the drugs are handled in the process or when they will be delivered. Sometimes the package is left on the patient’s doorstep, regardless of the weather. Since chemotherapy drugs can be ruined by hot weather and cold weather, the lack of protection means the drug’s potency can be severely damaged during the trip from the pharmacy to the patient’s home.
Brown-bag patients also have longer than normal infusion times. Chemotherapy drugs are usually mixed in the oncologist’s office on the day an infusion is scheduled and are ready when the patient arrives. Since brown-bag drugs come to the office with the person who will receive them, these patients must wait until their drugs are mixed to start treatment; increasing patient stress and exhaustion.
That was round one.
Physicians who participated in round one learned to deal with brown-bag insurers by ending their contracts with these companies or inserting “hold harmless” clauses in the contracts that made insurers liable if patients were harmed by damaged drugs. Insurers who participated in round one learned that some providers will not capitulate to their demands if patients are endangered.
Now the insurance companies are back for round two. They are focusing solely on finances, and their current tactics could have grave consequences.
Most insurers now say they will not force a practice to brown bag if the quality control issues cannot be solved. The practice may buy chemotherapy drugs from its own suppliers and mix the drugs in its pharmacy if it chooses to do so. The catch is that, if the practice will not accept the insurer’s discount drugs, the company will only reimburse drug costs at 10 to 20 percent less than the current Medicare reimbursement. Meaning the doctors would get less money for the drugs.
To put this decision in perspective, Medicare’s current reimbursement amount can produce a small profit or at least allow a practice to break even on drugs. Since oncologists are paid only a quarter to a third of what it costs them to perform chemotherapy infusions, the higher rate compensates for the loss the practice suffers when it administers chemotherapy. Unless Medicare and other third-party payers are willing to reimburse chemotherapy costs at a higher level, lowering the amount insurers pay for medications means that many practices may close.
The insurance companies know this and are using the threat to force doctors to brown bag.
These tactics put practices in a terrible quandary. They can 1) brown bag to stay financially afloat and run the risk of harming their patients, or 2) buy drugs from the supplier they know and trust but face the possibility of closing.
Lynn Kay Winters, C.M.M., M.B.A., practice administrator of Eastern Long Island Hematology Oncology in Riverhead, N.Y., tells a typical story. Her practice recently was approached by a large insurer who gave the doctors a choice of buying drugs from the insurance company’s supplier or maintaining control of drug ordering and mixing but being reimbursed for drugs at AWP minus 15 percent. Since 60 to 70 percent of the operating expenses of her practice are used for chemotherapy drugs, the practice will probably terminate the relationship with the insurer. The practice’s patients who subscribe to that insurance company will have to find a different care provider.
“For the first time, we are really dropping contracts,” Winters said. “We will go under if we don’t. We have been stripped of the luxury of maintaining a bad contract so we can continue to treat patients on active therapy. There is only one Medicare Plus carrier in our region. If other practices also drop contracts, the number of seniors on eastern Long Island who might be unable to receive cancer treatment near their home could be quite large.”
Other elements of brown bagging contribute to chemotherapy reimbursement problems as well. “Although insurance companies believe that brown bagging saves their plan money, the additional revenue insurance companies receive comes not from savings on drugs but from transferring some of the costs of chemotherapy from the payer to the oncology practice,” said James B. Albertson III, president of Albertson Healthcare Associates, Inc., in Panama City, Fla.
Albertson says that oncologists are expected to maintain drug inventories large enough to allow them to provide chemotherapy in a timely manner. Insurance companies that practice brown bagging say they will replace drugs that doctors take from their stock, but the replacement process can take several weeks. When the drugs finally arrive, payers insist that they must be used by their patient alone. In other words, the insurance company pays for their patient’s next dose, but does not reimburse the doctor for the first dose.
So who pays for the original drug that was administered and who pays for the carrying costs of the physician’s drug inventory? The answer is the oncologist. If a doctor uses the replacement drug to replenish the practice’s drug inventory instead of saving the drug for the insurance subscriber’s next dose, there can be legal consequences.
Every physician we interviewed remarked that if insurance companies thought they were going to save money by brown bagging, they were mistaken.
“The wastage is tremendous,” said Marsland. “If the company delivers two months of drugs for patient X and patient X dies, the company, by Florida law, can’t ask for the drugs back and they must be thrown away.”
Linda Thornrose, the administrator of Gainesville Hematology Oncology Associates in Florida reported that a brown-bag patient in her practice who self-injects a drug received the medication at home in the wrong dose and with the wrong syringes. Several other of her brown-bag patients said their drugs arrived in broken vials. Medication has also been dropped at her patients’ houses or delivered to the practice office warm to the touch and denatured because it was not properly refrigerated in transit.
Many doctors object to this practice [self-administration of drugs] because patients who self-administer drugs, even if they are medical professionals, often misunderstand instructions or interpret them “creatively” and harm themselves.
Art A. Alanis, Jr., R.Ph., director of pharmacy services at South Texas Oncology & Hematology in San Antonio, described having to teach a patient how to inject Faslodex, a salvage treatment for hormone receptor-positive metastatic breast cancer in postmenopausal women. The patient needed to administer the product using the Z-Track technique, which meant pulling the skin back in the gluteal region, injecting into the muscle, then releasing the skin and letting it slide over the injection site to block the drug from leaking out.
“Even a trained nurse would find it hard to self-inject that way,” said Alanis. “If a patient tries to put a Z-track shot into her hip she can hit the bone or a nerve like the sciatic nerve. The drug itself is viscous and must be kept refrigerated. If it clumps in the needle, the patient won’t know what to do. Of course the insurance company told our patient that if she couldn’t master the technique she could bring the drug to us and we would administer it, but didn’t mention that they wouldn’t pay us for this service.”
Most of the people who deal with brown-bag insurance companies on a daily basis . . . .have coped with the record keeping and scheduling problems brown bagging produces, and have seen both their patients and their practices put in jeopardy by insurers focused on money instead of good medicine. Oncology Issues will keep monitoring this controversial topic and will continue to seek out the newest and best game plans for practices that want to oppose brown bagging on either the round-one or the round-two level.
This article is condensed from “Round Two: An Update on Brown Bagging,” which originally appeared in Oncology Issues, March/April 2003.
