COC ADVOCACY TRACK Overview of National Oncology Issues & Key COA Initiatives for 2015 Ted Okon Orlando, Florida April 23, 2015

▪ Cancer care landscape continues to consolidate Bad news is access-to-care issues and higher costs Created by a “push” and a “pull” towards large hospital systems ▪ Community oncology practices the real innovators in healthcare reform Enhancing the quality of cancer care Making it more efficient and lowering costs ▪ COA’s focus in 2015 is two fold: Fix broken aspects of Medicare payment for cancer care Help community oncology survive and prosper ▪ Advocating for community cancer care more important than ever!!! One-Slide Summary 2 © 2015 Community Oncology Alliance

Consolidation of Cancer Care 3 © 2015 Community Oncology Alliance

Consolidation Trends 4 © 2015 Community Oncology Alliance

▪ Clinics closing in communities, especially rural areas ▪ Cancer patients shut out of networks ▪ Consolidation in hospitals cost patients and insurers (Medicare and private insurers) more Access-to-Care Problems and Higher Costs 5 © 2015 Community Oncology Alliance

Cancer Care Costs More in Hospital Clinics 6 © 2015 Community Oncology Alliance Source: Comparing Episode of Cancer Care Costs in Different Settings: An Actuarial Analysis of Patients Receiving Chemotherapy, Milliman, August 2013 ▪ Study found “significantly higher per-episode cost for chemotherapy drugs, radiation oncology, imaging (CT, MRI and PET scans) and laboratory services” in outpatient hospitals.

“Push” and “Pull” Causing Consolidation 7 © 2015 Community Oncology Alliance Push ▪ Declining payment for cancer care ▪ Administrative Burdens: Doctors forced to do more paperwork than treat patients ▪ Obstacles to Patient Care: Insurance company requirements Pull ▪ Hospital Hardball Tactics: Cut off referrals to oncologists ▪ 340B Drug Discount Program

▪ “SGR” formula – way all doctors are paid by Medicare – was just eliminated One problem down! ▪ Specific way Medicare pays for cancer care broken “Prompt payment” discounts from drug manufacturers to drug wholesalers artificially lower payments for cancer drugs ▪ Government budget “sequestration” further lowers payments for cancer drugs ▪ Government requires more paperwork and reporting than ever before Think IRS! ▪ Insurers lower the cost of cancer care by making it harder to provide cancer care in the first place “Push” Problems 8 © 2015 Community Oncology Alliance

▪ Cancer care has become very, very, very big business for hospitals Did I say VERY BIG business for hospitals? ▪ They make a lot of money, especially those hospitals eligible for 340B program Close to 40% (and growing) of all hospitals ▪ Hospitals can get cutthroat, especially by not sending any cancer patients to community oncology practices Join us or go out of business! “Pull” Problems 9 © 2015 Community Oncology Alliance

340B Program ▪ Once obscure government drug discount program intended to cover patients who can’t pay from falling through the treatment cracks ▪ Now a HUGE program that more are questioning if it has lost its way in catching patients who can’t pay ▪ HUGE financial benefits to hospitals Up to 100% margins on cancer drugs and other expensive therapies If average oncologist accounts for $4M in drugs, hospital realizes up to $2M per oncologist Discounts don’t go back to patients ▪ 340B hospitals under no obligation to treat all patients

340B Program Growth

Growth in 340B Program 30% CAGR Since 2005

▪ Some consolidation will keep happening Stronger practices will survive ▪ Community oncology practices are way out in front of healthcare reform Enhancing the quality of care Increasing efficiency and decreasing costs Doing more than any other area of medicine! ▪ Cancer is a disease that changes lives What is happening to community oncology is life changing ▪ Future is uncertain but there is blue sky! What Happens to Cancer Care? 13 © 2015 Community Oncology Alliance

Oncologists and Insurers Working Together 14 © 2015 Community Oncology Alliance

Major Summit on Paying for Cancer Care 15 © 2015 Community Oncology Alliance ▪ Over 120 providers, insurers, and industry ▪ Panels on new approaches to paying for cancer care ▪ Lots of cooperation and sharing of ideas ▪ Eye opener for “new” insurers ▪ Everyone asking for this to continue And that’s what is happening this afternoon!

Community Oncology Alliance16

▪ Fight Medicare payment cuts to cancer drugs H.R. 696 and S. 506 to fix “prompt pay” problem H.R to stop “sequester” cut to cancer drug payment ▪ Fight for fix of 340B program ▪ Continue to build the “Oncology Medical Home” Provide the highest quality care to patients Increase treatment efficiencies and reduce costs ▪ Push for more cancer care payment pilots Private insurers and Medicare ▪ Advocate, advocate, and advocate some more for community cancer care!!! COA 2015 Agenda 17 © 2015 Community Oncology Alliance

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Thank You! 20 © 2015 Community Oncology Alliance Ted Okon (CPAN)