Exploring Cost Savings with Specialty Biologic Drugs Administered to Adult Inpatients with Inflammatory Bowel Disease

Abstract

Background: Specialty infusion and self-injectable biologic drugs for the treatment of inflammatory bowel disease (IBD) are high-cost medications. When administered to hospital-admitted patients, these medications are not reimbursed on an individual basis but rolled into a per diem payment by most payers in the United States (US). Therefore, choosing to administer these medications in the inpatient setting may reveal negative financial implications for some health care institutions. Selecting an alternative site of care to administer these medications during the clinical management process may lead to cost savings. Objective: Review the clinical necessity of inpatient specialty biologic administrations for the treatment of IBD to identify and quantify potential cost saving opportunities. Methods: Using patient medical records at a US academic medical center, we retrospectively identified inpatient administrations of specialty infusion and self-injectable biologic medications for IBD treatment from June 1, 2016 to May 31, 2017. Guided by a standardized form, an evaluation team consisting of 3 of the investigators determined the clinical necessity of each specialty biologic medication administration within the inpatient setting. Costs and reimbursement rates for administration in both the inpatient and outpatient settings were procured and tabulated. Results: Seventeen inpatient specialty biologic administrations for IBD during the 12 month study period were identified. Of these, 11 administrations were given for the treatment of Crohn’s disease (CD) and 6 for ulcerative colitis (UC). The evaluation team determined that 65% of these administrations were clinically necessary as inpatient administrations, and that 35% were not. The sum of the wholesale acquisition costs (WAC) for clinically necessary inpatient biologic administrations totaled $54 737, and the WAC for those administrations deemed not clinically necessary totaled $43 702. Further analysis of administration events revealed that the institution could have realized an estimated $13 817 in additional revenue above the cost of the drug if eligible inpatient biologic administrations had been received in the institution’s outpatient clinic setting instead. Conclusion: Administering specialty biologic drugs for the treatment of IBD in the care setting best aligned with existing reimbursement structures may lead to institutional cost savings.

Introduction

Inflammatory bowel disease (IBD) refers to chronic inflammatory conditions of the digestive tract. The 2 conditions which primarily comprise IBD are ulcerative colitis (UC) and Crohn’s disease (CD). UC is a mucosal disease limited to the colon. CD, in contrast, is a transmural disease and can affect any portion of the GI tract from mouth to anus. Although the 2 disease states often overlap in terms of affected anatomical location and drug treatment, they are different in morphology, clinical presentation, and outcomes to treatment. In some cases, distinction between Crohn’s disease and ulcerative colitis cannot be made. This is referred to as indeterminate colitis. Generally, treatment for CD, UC, and indeterminate colitis often require ongoing drug therapy in the form of immunotherapies like specialty biologic drugs, as well as possible hospitalization and surgery.

Specialty medications are high-cost medications used to treat complex chronic conditions, such as biologic drugs for the treatment of IBD. Health care costs are rising for the IBD population and the use of specialty biologic drugs, including monoclonal antibodies, has been a driving force.^1-9 In 2019, infliximab and vedolizumab were within the top 25 drugs by expenditures in nonfederal hospitals, with infliximab ranked at number 7. ¹⁰ With the ever present need for fiscal responsibility within healthcare, the setting—inpatient versus outpatient—where high-cost specialty biologic therapies are administered, should coincide with reimbursement structures when possible. In the United States, inpatient reimbursement is generated from diagnosis-related groups (DRGs) which do not directly make payment for inpatient-administered medications, including biologics. ¹¹ If the institutional total cost of providing care exceeds the predetermined DRG reimbursement amount, the institution will lose revenue, and therefore it can be financially detrimental to institutions to administer costly medications to inpatients. ¹¹ Conversely, giving specialty intravenous biologic drugs in outpatient centers where reimbursement is directly tied to the cost and administration of the medication represents an opportunity to provide the medication in a situation better aligned with existing reimbursement structures. ¹¹ A potential further increase in outpatient revenue may be realized by institutions that are eligible to purchase outpatient specialty medications at lower price points under the Public Health Service 340B Drug Pricing Program while receiving standard reimbursement from insurers. This program encourages hospitals to use income arising from these discounts to expand or improve care to underserved populations (ie, low income and vulnerable populations). ¹¹

Initiating a new specialty biologic agent on an IBD patient during an inpatient stay may not be clinically necessary in certain cases. The administration may be deferred until the patient is able to receive the medication in an outpatient setting. Further, inpatients who receive maintenance IBD specialty biologic therapy as outpatients may be able to have their next dose deferred to when they return to the outpatient setting.

Conversely, administration of specialty biologic drugs to inpatients with IBD may be clinically necessary in some scenarios. Multiple gastroenterology consensus documents and guidelines recommend early initiation of rescue medical therapy or surgery (ie, colectomy) for patients with severe ulcerative colitis that fail to respond to intravenous (IV) glucocorticoids.^7,12-15 Rescue medical therapy may be either infliximab (a specialty biologic drug) or intravenous cyclosporine.^7,12-16 Infliximab is the preferred rescue medical therapy for severe ulcerative colitis at the study institution due to efficacy, safety profile, and the ability to continue it as maintenance therapy. In active Crohn’s disease, administration of specialty biologics can be used in cases refractory to glucocorticoids or in certain clinical scenarios that warrant avoidance of glucocorticoids. ¹⁷ For patients taking biologic drugs for maintenance therapy as outpatients prior to inpatient admission, it is the opinion of gastroenterology providers at the study institution that patients with symptomatic IBD, or asymptomatic patients who are beyond their administration window (see Supplemental Appendix 1), should not have their biologic drug withheld as an inpatient.

To identify and quantify potential cost saving opportunities at the study institution, we retrospectively evaluated the clinical necessity of inpatient specialty biologic administrations over a 1 year time period and collected cost data.

Methods

This retrospective chart review was approved by our institutional Investigational Review Board. All inpatient medication administrations of certolizumab pegol, vedolizumab, infliximab, natalizumab, adalimumab, golimumab or ustekinumab, between June 1, 2016 and May 31, 2017, were obtained through a query of the electronic medical record. Non-IBD administrations and administrations to patients under the age of 18 were removed manually based on record review. Each drug administration was assigned an indication: severe ulcerative colitis or UC flare, maintenance for UC, severe Crohns flare or Crohns flare, maintenance for Crohns, indeterminate colitis flare, maintenance for indeterminate colitis, other IBD flare, or maintenance for other IBD. Other data collected for each administration included patient’s age, sex, race, and location in the hospital; time and date of drug administration; dose and dosing units; the wholesale acquisition cost of the drug (WAC) and the amount billed for the drug; total hospital charges billed and total payments received for the entire inpatient encounter; and the patient’s hospital admission and discharge times.

From a review of the patients’ medical records, it was determined if each administration was a new start of the biologic drug for IBD or a continuation of the patients’ prior to admission drug. For both new starts and continuation therapies, it was then determined if each administration, with respect to the point in time it was actually given during the admission, was clinically necessary or not clinically necessary for inpatient administration. Assessment of clinical necessity was made by 2 clinical pharmacy specialists (SPi and CJ) and 1 IBD-specialized gastroenterologist (SPo). All parties evaluated the data separately and were aided by the use of a data evaluation form (Supplemental Appendix 1). Individual evaluation differences were discussed as a group until unanimity was reached. While evaluating certain administrations during group discussions, modifications to the evaluation form were made and agreed upon by all evaluators. To ensure consistency, all other relevant administrations were checked against any evaluation form modifications (SPi) and the group’s evaluation decisions were changed if necessary to match the updated form. Intravenous glucocorticoid non-response was a major criterion used to determine clinically necessary inpatient use of biologics for new start administrations. Timing of the administration and timing of patient discharge were major criteria used to determine appropriate use of biologics for inpatient continuation therapies (see Supplemental Appendix 1 for full list of evaluation criteria).

The total wholesale acquisition costs for all IBD-indicated inpatient biologic administrations were tabulated and then grouped into the clinically necessary or not clinically necessary designations.

To examine the financial ramifications of transitioning eligible inpatient administrations to the outpatient setting, the potential revenue above cost was calculated for those administrations that were both (1) not clinically necessary for inpatient use, and (2) require a healthcare appointment when given to outpatients (ie, intravenous infusions). The payer, expected outpatient reimbursement, Group Purchasing Organization cost, and 340B cost of drug procurement were obtained for these administrations. The outpatient medication cost was obtained by multiplying the billing units by the 340B cost per billing unit. Medicare reimbursement was calculated by multiplying the billing units by the National Payment Rate per billing unit. The commercial reimbursement was calculated by multiplying the billing units by the contracted fee schedule per billing unit. The potential revenue above cost was determined by taking the expected outpatient reimbursement minus the 340B acquisition cost for each potential outpatient infusion and then adding these infusion figures together.

Opportunity cost was obtained by adding the total costs of not clinically necessary inpatient administrations to the total potential outpatient revenue above cost.

Results

Seventeen inpatient biologic administrations for patients with IBD over a 1 year time period were included in this study (11 for Crohn’s disease and 6 for ulcerative colitis).

Of these administrations, 65% (11/17) were evaluated as clinically necessary, whereas 35% (6/17) were evaluated as not clinically necessary. Of the 17 administrations, 65% (11/17) were new starts (ie, first doses of therapy) and 35% (6/17) were continuations of prior to admission therapy. Of the 11 new starts, inpatient administration was clinically necessary in 55% (6/11) of cases and not clinically necessary in 45% (5/11) of cases. Of the 6 continuations of therapy, inpatient administration was clinically necessary in 83% (5/6) of cases and not clinically necessary in 17% (1/6) of cases. Subsequent financial analysis (n = 15) excluded 2 patients who supplied their own biologic medication product (both adalimumab) while in the hospital. See Table 1.

Table 1.

Inpatient Administration of Biologics for IBD over 1 year.

	Administrations	Percentage of total	Total wholesale acquisition costs *	Number of new start administrations	Number of continuation administrations
Clinically necessary for inpatient administration	11	64.7%	$54 737	6	5
Not clinically necessary for inpatient administration	6 **	35.3%	$43 702	5	1
Total	17	100.0%	$98 439	11	6

^*Excludes 1 administration from each group as patient supplied their own medication.

^**One administration was given as 2 partial doses 2 days apart but was considered 1 administration for the purposes of this study.

The sum of the wholesale acquisition costs for the biologics evaluated as clinically necessary for inpatient administration was $54 737 (n = 10) and for those administrations that were evaluated as not clinically necessary was $43 702 (n = 5). See Table 1.

Three administrations (all infliximab) met the criteria of transitioning from inpatient to outpatient administrations. Shifting these 3 administrations to the outpatient clinic setting where the study institution operates under a fee-for-service model, the potential revenue above cost was calculated at $13 817.

Adding the potential revenue above cost of $13 817 to the potential inpatient cost-savings of $43 702, yields a potential opportunity cost of $57 519. See Figure 1.

Figure 1.

Opportunity Cost.

Discussion

Based on a retrospective review of specialty biologics administrations given for IBD at a single US academic medical center over 1 year’s time, this small study demonstrates potential positive cost implications for institutions that are reimbursed based on DRGs when only clinically necessary inpatient administrations are given to inpatients while other administrations are deferred to the outpatient setting.

When evaluating inpatient immunologic therapy use at a single US academic medical center, Griggs et al. found that 12 infliximab, 12 adalimumab, and 1 natalizumab doses were administered over an approximate 5 month period in 2014 to inpatients at their center. ¹¹ Several factors were used to identify opportunities to safely shift these doses to outpatient administration. These factors included timing of medication administration in relation to discharge time, formulary restrictions, requirement of medication for acute disease management or chronic maintenance, whether the patient was established in the institution’s outpatient clinics, and appropriateness of the medication for the indication and administration in the inpatient setting. The authors determined that 1/1 doses of natalizumab, 7/12 doses of infliximab, and 12/12 doses of adalimumab had potential to be safely shifted to outpatient administration. Perhaps owing to our small sample size, or that we counted only administrations for the indication of IBD, or because of differences in our evaluative criteria and method of analysis, our results differed with respect to Griggs et al. Based on our data evaluation, only 3/11 doses of infliximab and 2/5 doses of adalimumab were not clinically necessary for inpatient administration, which is a lower percentage than what Griggs et al. proposed was safe to shift to the outpatient setting. When normalized for the difference in study durations, Griggs et al. identified approximately 3 times as many inpatient biologic administrations of our study protocol-included drugs compared to us. This may stem from the fact that IBD-biologics can also be used for other indications and indications were not specified in Griggs et al., that inpatient need for a biologic drug is often questioned by the inpatient pharmacist at our institution during order verification which may reduce unnecessary inpatient administrations, or that our institution has an IBD program experienced in the outpatient treatment of complex IBD which may result in fewer hospitalizations that require inpatient biologic treatment for our program’s patient population.

Limitations to this project include its retrospective design, small numbers of administrations, and that its cost data represents only the biologic medications and does not include any of the associated medication administration costs. Also, our results would be less applicable to institutions whose third-party payment structures are different than our own. Further, the WAC is a universal cost measure with healthcare and does not necessarily reflect what our institution actually paid.

Other limitations surround our evaluation criteria. First, evaluation criteria was applied to the actual time of administration and it is possible that an administration could have been evaluated differently had it occurred earlier and/or later in its respective hospitalization. Second, the evaluation criteria did not take into account the full clinical picture of each patient (eg, the patient’s vaccine status, the patient’s tuberculosis status, if the patient was steroid intolerant, if the patient had a pending surgery) when determining clinical necessity of the biologic administration. Therefore, the term clinically necessary in this study should only be used in context of its study definition. Third, although we agree that any patient with active IBD symptoms should not have their prior-to-admission specialty biologic held regardless of time due, this criterion was not included in the evaluation of continuations of therapy. If this criterion was added, then 1 administration would have changed from not clinically necessary to clinically necessary; however, the cost data would have remained the same as this particular patient provided their own medication for administration.

The results of this project could be used to support an institutional inpatient protocol to assist prescribers with ordering specialty biologics within a cost conscious model. The results may also provide data to support developing inpatient workflows that efficiently allow specialty biologic administrations shifts from the inpatient to outpatient setting.

Conclusion

Based on a retrospective review of inpatients receiving injectable specialty biologic therapy at an academic medical center for IBD over a 1 year period, cost savings could be realized by decreasing the number of administrations that are not clinically necessary for inpatients and shifting eligible infusions to the outpatient setting.