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Payers are shifting where patients receive infusions. Here's what that means for 4 key industry players.

By Natalie TrebesColleen KeenanLindsay Conway

October 23, 2020

    Even amid the Covid-19 epidemic, rising drug costs continue to be a major news story. And it's no surprise that this issue is garnering attention—the average annual cost of a specialty chronic drug in 2017 was $79,000. As a result, payers are implementing different strategies to combat these rising drug costs.

    Oct. 27 webinar: Payer trends impacting health system infusion services

    One increasingly common payer strategy is to control where patients can receive infusions—namely requiring patients to use non-hospital settings, including home infusion, when it's safe. This strategy isn't without merit, either. UnitedHealth Group found that administering specialty drugs in physician offices and patients' homes instead of in hospital outpatient settings can reduce specialty drug costs by $4 billion each year. (Advisory Board is a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group.) As payers continue to shift patients to lower-cost sites of care, industry stakeholders need to prepare for and understand the impact on their business operations.

    Below, we've analyzed the potential impact of infusion site-of-care shifts across four key stakeholders:

    Payers must strike the right balance between cost and quality care

    Analysis by Natalie Trebes

    Payers are the key drivers of these infusion site-of-care shifts—but as ever, they must balance their competing priorities of reducing the total cost of care and enabling access to high-quality care.

    Health plans' increasing interventions on infused drugs are prompted by the drugs' conspicuous high price tags. Their purchasers—especially employers—are growing increasingly concerned about the high associated costs they can clearly see and are now actively pressuring their health plan carriers for specific action on these drugs (rather than passively relying on plans' unilateral judgment).

    But plans can't push forward aggressively without considering the ripple effects these policies have:

    • Quality, safety, and patient experience are paramount concerns, and plans will need to carefully evaluate outcomes of alternative settings on an ongoing basis—for each site, drug, condition, and patient type. While evolving treatment processes and technologies may make some infusions more effective and convenient in the home, payers must also be cognizant of any challenges this causes for care team coordination.

    • Plans must balance these shifts with maintaining their contracted network of providers. Given that HOPD-delivered infusions represent significant revenues (and often margins) for providers, these shifts can mean an outsized hit to overall provider cash flows—which can escalate into more aggressive contract negotiations. Plans will have to consider which providers are most vulnerable from these policies, and what that might mean for the network composition they want to sustain. Where possible, plans should explore opportunities with strategic provider partners to build infusion site-of-care shifts into larger incentive arrangements (such as preferential steerage or shared savings).

    6 strategies for health systems

    Analysis by Mallory Kirby and Elle Choi

    Hospitals and health systems have a lot at stake when it comes to infusion center site-of-care shifts—namely, losing the financial benefit of hospital outpatient department (HOPD) infusions and losing patients to other providers.  

    Site-of-care pressures are not a new concern for hospital infusion centers, but payers' mounting actions to counteract rising drug costs have heightened these pressures. The concerns are particularly acute for infusion centers that treat many non-oncology patients. While some payers have pushed for oncology infusions to take place in non-hospital settings, cancer treatments have largely been excluded from home infusion pressures due to concerns for patient safety and provider resistance. On the other hand, non-oncology infusions are rapidly being pushed out of hospital settings.

    Health systems should expect Covid-19 to accelerate these site-of-care shifts and must think strategically about how to respond. Strategies to consider include:

    1. Create a cross-disciplinary workgroup to understand payer changes and evaluate existing infusion processes. This is a critical first step given that many health systems haven't conducted thorough analyses to understand the scope of the impact.

    2. Work with your managed care colleagues to push back against site-of-care policies. Anecdotally, some hospitals have worked to make the case that site-of-care policies will impede patient access, complicate patient care coordination, and negatively impact safety and quality.

    3. Offer infusions at your own freestanding facility. Non-HOPD settings can provide a more convenient option for infusion patients and may offer a level of comfort for patients wary of contracting Covid-19 from a hospital setting.

    4. Invest in a home infusion program, whether it's wholly owned or a partnership. Programs facing infusion center capacity constraints may be especially interested in this option. Health systems considering a home infusion investment need to make sure they have the needed expertise, given that care protocols and billing for home infusion are very different than in the infusion center.

    5. Reclassify sites of care when billing. Rather than moving patients out of the HOPD entirely, some infusion centers have negotiated with payers to change billing status for specific patients or drugs, keeping patients in their system, albeit, at a lower reimbursement rate. One health system reported dropping their infusion rates by 20% to continue using buy-and-bill at the hospital-based infusion center.

    6. Dispense provider-administered medications with payer sourcing requirements (i.e., clear bagging) through the health system's specialty pharmacy. While the pharmacy may be limited to dispensing medications on the pharmacy benefit, this strategy helps ensure continuity of care for patients while also meeting regulatory requirements ensuring drug safety and effectiveness.

    The positive and negative impacts for patients

    Analysis by Colleen Keenan

    Shifting infusion sites can impact patients positively or negatively depending on their preferences and diagnoses.

    Changing infusion sites can affect patients in a few ways:

    • On the positive side, patients could view the shift as a more convenient option, since they don't have to go to the hospital for their infusions. These shifts could reduce their costs and even streamline their billing processes since they may have been receiving two bills in the hospital setting (one for the hospital facility fee; one for the infusion administration).

    • On the negative side, patients likely won't welcome the disruptions in their usual providers. Additionally, for complex conditions, like cancer, shifting infusion sites adds another layer to an already complicated treatment process and care team. These patients may even be uneasy with the change if they don't feel as safe receiving an infusion in a different site of care (e.g., their home).

    3 impacts for pharmaceutical companies

    Analysis by Lindsay Conway and Colleen Keenan

    Infusion site-of-care shifts can impact patient access and product volumes, but also provide an opportunity for pharma companies to educate and support their provider customers in targeted ways.

    There are three main impacts to pharma organizations:

    1. Access: Even with shifting sites of care, a pharmaceutical company's primary "customer" remains the prescriber. Their secondary customer, however, is the health plan or PBM, which needs to agree to cover the drug. For drugs administered at home (and drugs subject to white bagging), a specialty pharmacy will most likely purchase the drug and bill for it. In the process, the drug may be transferred from the health plan's medical benefit to the PBM's pharmacy benefit. PBMs typically have different policies about coverage, pre-authorizations, step therapies, etc.—all of which affect access and ultimately affect the volume of drug the pharma company can sell.

    2. Education: As more infusions occur in different sites, providers will need new types of education and support. Specifically, they will want information on how to manage patients in a new setting or with a new mode of administration, comparative effectiveness data related to those settings and administration methods, symptom and side effect management, and opportunities to enhance remote patient monitoring.

    3. Product design: With the push toward home care when possible, pharma companies should consider making their products more user-friendly and compatible with home care. For example, a few years ago, Amgen introduced an on-body injector that patients wear home from the doctor's office which automatically injects a supportive drug into them 24 hours later. The infusion site-of-care shift may prompt other innovations that can enhance the patient's care experience outside of traditional settings.

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