Value-Based Payment Reform: Focus on the Oncology Care Model

Conference Correspondent - AVBCC 2018


The Medicare Access and CHIP Reauthorization Act of 2015 introduced value-based reimbursement to Medicare through 2 Quality Payment Program tracks: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). In MIPS, physicians are evaluated on a broad set of performance indicators, with some receiving incentive payments and others suffering a penalty. Providers who are willing to take further steps toward transforming healthcare can become MIPS exempt through participation in an APM, which, for most oncologists, is the Oncology Care Model (OCM). The OCM is a multiyear program with a 2-part payment model, including a Monthly Enhanced Oncology Services (MEOS) $160 care management fee for enhanced services and managing patient care and a retrospective, performance-based payment that compares a practice’s actual fee-for-service spending against a risk-adjusted target amount. When participating in the OCM, practices are required to submit data allowing CMS to determine eligibility for performance-based incentive payments.

An expert panel, moderated by Pamela Pelizzari, MPH, a healthcare consultant at Milliman, Inc, explored the issues and challenges of the OCM and other value-based payment models. Panelist Dennis P. Scanlon, PhD, Distinguished Professor of Health Policy & Administration at Pennsylvania State University, noted that the goal of APMs is to reduce or stabilize costs while improving the quality of care and patient experience. When asked about the factors that attracted his practice to participate in the OCM, Michael Ruiz de Somocurcio, Vice President of Payer & Provider Collaboration at Regional Cancer Care Associates, noted that OCM MEOS payments have helped to drive practice transformation, allowing the practice to hire oncology nurse navigators and social workers, conduct data analytics, and develop and implement a care management program. He also indicated that it gave his practice a “playbook” for working with local commercial payers to develop a common set of value-based metrics. For the most part, panelists lauded CMS’s efforts in supporting oncology practices, although it was noted that there is a substantial delay of 18 months in reporting data back to the practices, thereby limiting their utility to some degree.

Much has already been said about the 6-month care episode methodology for measuring cost of care. The panelists agreed that although it is imperfect, the episode of care bundles currently in the OCM represent a logical and reasonable approach to quantifying oncology care and associated costs. Another limitation of the OCM is that participating practices receive incentive payments based on the total cost of care, even though they have no control over drug pricing, which accounts for approximately 60% of oncology spending. Also, due in large part to the resource-intensive data collection and reporting requirements, panelists noted that many small practices have dropped out of the OCM, and they questioned whether the OCM may be an unintentional factor in driving practice consolidation.

Although the baseline period report was released earlier this year, the panelists agreed that it was premature to judge whether the OCM was meeting the core goals of the initiative, containing costs while improving quality of care. The next annual report evaluating the OCM should help to answer that question.