Oncology Reimbursement Reform: Changes on the Horizon

TOP - August 2019, Vol 12, No 3 - ASCO
Chicago, IL—Formed 10 years ago with the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) Center for Medicare & Medicaid Innovation (CMMI) has been tasked with developing new payment and delivery models designed to improve the efficiency of specialty care. Among those specialty models is the Oncology Care Model, which aims to improve cancer care delivery by providing higher quality, more coordinated care to Medicare beneficiaries at the same or lower cost than under traditional fee-for-service structures.

At the 2019 American Society of Clinical Oncology Annual Meeting, Lara M. Strawbridge, MPH, Director, Division of Ambulatory Payment Models, Patient Care Models Group, CMMI, shared recent data from the model, which began in 2016 and is scheduled to run through the middle of 2021.

“When we started thinking years ago about opportunities to address fragmentation of care and potentially inappropriate financial incentives, oncology was a clear opportunity for us to try something new and different,” said Ms Strawbridge. “Our focus is on trying to incentivize the practice to transform the way care is provided in a way that can improve quality and improve outcomes for their cancer patients.”

The Oncology Care Model

The Oncology Care Model involves a 2-part payment system. Participating oncology practices receive monthly enhanced oncology services (MEOS) payments once a patient starts chemotherapy, for up to a 6-month episode (patients in an extended course of therapy can have repeat episodes over time). In addition, there is the potential for retrospective performance-­based payments in cases where practices have reduced costs relative to a target price for their episodes and where quality is sufficiently high.

“The goal is to get as many patients as possible that a practice might see covered by incentives that are aligned and moving in the right direction,” said Ms Strawbridge, who noted that 176 practices and approximately 7000 practitioners and 200,000 patients are participating in the model per year along with 10 commercial payers.

As Ms Strawbridge reported, the MEOS payment is based on 4 main activities: around-the-clock access to clinicians with real-time access to medical records; patient navigation; 13-point care plan; and use of nationally recognized clinical guidelines. CMS also requires practices to use certified electronic health record technology and to utilize data for continuous quality improvement. Furthermore, said Ms Strawbridge, practices must complete estimates of out-of-pocket costs related to cancer for each patient.

“We believe that this is an impor­tant step in addressing the financial toxicity that often comes with cancer care,” she observed.

Signs of Early Promise and Limitations

Although CMS has not yet seen measurable effects on hospitalizations, emergency department use, or Medicare spending on chemotherapy in the first 6 months of the model, the agency has identified signs of early promise as practices transition away from fee-for-service.

“We are eagerly waiting for the next round of results that will include more time in the model. With other alternative payment models that we implement through the Innovation Center, we’ve often seen that it takes some time for an intervention to gain momentum.…As practices become accustomed to delivering those enhanced services, we are hopeful that the results will just get better and better,” Ms Strawbridge said.

Nevertheless, CMMI is working to overcome limitations in diagnosis codes that get captured in claims data while keeping pace with the changing landscape of cancer care.

“With the advent of so many novel therapies in the immune-oncology space, medical oncology in particular has changed dramatically in the last few years,” said Ms Strawbridge. “Making sure that we set payments at the right level and instill faith among our participants that they will be rewarded in cases where they’ve actually made a change is something that we continue to work on.”

As CMS continues to seek ways to improve quality of care and health outcomes, it is also moving further away from the fee-for-service infrastructure for payments. The Oncology Care Model is currently set up as a retrospective model with performance, Ms Strawbridge explained, but the future will likely involve more prospective payments based on shared risk.

“We’d like to establish a model that can drive adoption of two-sided risk to give oncology practices an opportunity for performance-based payments, but also have an appropriate level of risk in cases where care costs exceed the predicted level. There are a lot of challenges ahead, but we’re excited by what we’ve learned so far with this model and by what we’ve seen many others doing in this space,” Ms Strawbridge concluded.

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Last modified: July 11, 2023