Summer 2015 

Randall F. Holcombe, MD, is Chief Medical Officer-Cancer, Mount Sinai Health System, and Deputy Director, Tisch Cancer Institute.

Commentary Overview

* Oncology has not kept pace with the U.S. healthcare system's transition toward value-based reimbursement, bundled payments and pay-for-performance concepts.

* The Centers for Medicare and Medicaid Services (CMS) has proposed a new payment and delivery model for oncology called the "Oncology Care Model (OCM)". It focuses on physician practices administering chemotherapy and contains financial incentives to improve care coordination.

* A recent AACI Physician Clinical Leadership Initiative webinar identified several potential challenges for cancer centers related to participation in CMS OCM.
About AACI Commentary

As part of AACI's efforts to feature the work and views of its member centers, AACI has launched AACI Commentary, a quarterly editorial series. Written by cancer center leaders, each edition will focus on a major issue of common interest to the nation's cancer centers.

The CMS Oncology Care Model: Managing the Move to Value-Based Reimbursement


The Affordable Care Act has accelerated the transition of healthcare in the U.S. toward value-based reimbursement, bundled payments and pay-for-performance concepts. A key concept under these models is the monitoring and tracking of metrics of care that affect the quality of care delivered. These metrics may include both process and outcome measures.

Oncology has not kept pace with other disciplines in this evolution, in part because of the high cost and incredible complexity of treatment. Many free-standing cancer centers have been exempted, in part, from annual reporting to the Centers for Medicare and Medicaid Services (CMS) and oncology care has been excluded from Accountable Care Organization reimbursement models as a high-cost outlier.

CMS has proposed and will be testing a new payment and delivery model for oncology called the "Oncology Care Model (OCM)". It is conceived to improve the effectiveness and efficiency of specialty care for cancer patients and will include financial and performance accountability for episodes of care involving chemotherapy administration. The model aims for higher quality, better coordinated oncology care at a lower cost to CMS.

AACI's Physician Clinical Leadership Initiative (PCLI) recently hosted a webinar to discuss cancer care models, specifically, CMS' proposal. Representatives from a dozen AACI cancer centers participated.

The CMS OCM model focuses on physician practices administering chemotherapy, and the proposal contains financial incentives to improve care coordination provided by medical oncologists. There is no specific provision for including surgeons and radiation oncologists as care coordinators. In addition to care coordination, the incentives aim to improve appropriateness of care, access to care and cost effectiveness. The model provides a per-beneficiary per-month payment for each episode of care, defined as a six-month period of chemotherapy administration, which is $160 per month per beneficiary. Additional reimbursement will be available if the center reduces its historical cost of care averages, generating a savings shared between CMS and the institution or practice. An initial two-year run-in period is a risk-free financial environment, with downside risk incorporated only after that time for practices that opt in to the program.

Care Plan Components
Under proposed CMS OCM requirements, providers will have to document a care plan that contains the 13 components in the Institute of Medicine (IOM) Care Management Plan outline, published in the IOM report, "Delivering High Quality Cancer Care: Charting a New Course for a System in Crisis." Some of the key components include treating patients with therapies consistent with nationally recognized clinical guidelines, evaluation of and intervention for emotional distress, providing 24/7 physician access, utilizing a unified EMR across disciplines and specialties, the use of data to drive continuous quality improvement and providing estimates for patients for total and out-of-pocket costs for cancer treatment. This latter requirement is already mandated by state law in Massachusetts and several turn-key software programs are available to assist centers in providing this service. AACI distributed a list of these programs to the PCLI membership.

Several potential challenges related to participation in CMS OCM were identified during the AACI/PCLI webinar. These include the complexity of the application and letter of intent, the ability to satisfy all 13 components outlined in the IOM report, and the significant demands on staff for the collection, analysis and reporting of a large number of process and outcome quality metrics. For the latter, several centers identified plans to shift documentation tasks from MDs to non-MD providers. The mechanisms by which CMS will audit sites for compliance have not yet been delineated but could result in additional expense and the need for institutions and practices to commit staff time and effort.

There are a number of reasons that the model might be problematic for some cancer centers, including:

Some Medicare SELECT plans exclude research patients because they are more expensive, thus discouraging enrollment of research patients;

New drugs are coming out which will be more expensive. If a center doesn't have a sufficient number of patients on trials to calculate a statistically significant and meaningful baseline, CMS might make a calculation based on other criteria, like geographic baselines from a private practice, which may not be appropriate for academic centers engaged in clinical research activities. Will practices still have the flexibility and freedom to use new drugs when there are disincentives to prescribe cost drugs because practices are being asked to reduce the costs?

For centers that currently have suboptimal charge capture systems, this new model will prevent institutions from reaping benefits that could flow from system improvements. ("Charge capture" refers to the collecting of information for use in a medical claim document. Without a reliable charge capture process, poor coding and lost charges can cost cancer centers money.) Improvements in charge capture will appear to CMS as an increase in costs/expenditures. This will lead to loss of incentives and possibly to penalties under the shared savings model.

As institutions and practices reduce costs year after year to benefit from the shared savings model, eventually costs will be reduced to the lowest possible level where quality of care is maintained. After this point, no shared savings incentives will be available unless quality is sacrificed.

Academic institutions that have a main campus and multiple outside practices may have significant difficulty averaging out the current cost of an episode of care for a particular patient population and disease/stage. It is unclear how CMS will calculate these costs that will serve as a baseline for future shared savings disbursements.

The move toward value-based reimbursement in oncology is inexorable. Participation in the CMS OCM proposal, especially during the early phases when there is no financial downside (save for significant personnel and IT costs for participating), will enable large multidisciplinary practices and academic cancer centers to gain experience with little risk and to maximize preparation for future health care reforms.

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