ASCO Proposes New Reimbursement Model by Medicare for Cancer Care

Neil Canavan

February 2014, Vol 5, No 1 - Economics of Cancer Care


The American Society of Clinical Oncology (ASCO) has proposed a radical new model for the reimbursement of oncology services under Medicare, with the new paradigm consisting of incentives for oncologists to emphasize quality rather than quantity of care as the greater good to the bottom line.

“This payment reform proposal represents a real shift in the way oncologists would be reimbursed,” said ASCO President Clifford A. Hudis, MD, Chief, Breast Cancer Medicine Service, Memorial Sloan-Kettering Cancer Center, New York. “ASCO is offering a new and different perspective on how oncologists should be compensated that recognizes their expertise as well as the care and services they are providing to patients.”

The proposed reform is part 5 of a 5-part series of ASCO communications intended to educate its membership on how Medicare reimbursement is currently configured, on ideas for moving away from the fee-for-service (FFS) model, and on the proposal itself.

The proposal, as put forth by ASCO’s Payment Reform Working Group, began with a (seemingly) simple question: “If we could build a logical Medicare model for oncology reimbursement from scratch, what would it look like?” The simple answer is, in brief, put quality of care first. How to do that requires a few more details, with 5 recommendations in particular:

New patient payment. A single reimbursement is proposed for the time required to evaluate a new patient. This would eliminate Current Procedural Terminology (CPT)-based evaluation and management payments, but would retain payment for FFS diagnostic testing.

Treatment month payment. After the patient begins treatment, the practice would receive a single monthly payment for all treatment-related activities (eg, chemotherapy administration, therapeutic injections and infusions, hydration services, etc). This compensation would replace all current CPT-based payments.

Four different levels of payment are proposed for the monthly reimbursement. This would account for the differing treatment needs of individuals within a practice population resulting from comorbidities, performance status, complications related to the proposed treatment plan, and so on.

Nontreatment month payment. This payment is proposed for circumstances in which a patient does not receive treatment during a particular month because of treatment complication or other medical circumstance.

For this nontreatment month, 2 levels of payment are proposed—(1) a higher amount for months immediately after the end of treatment, and (2) a lower amount for patients undergoing long-term monitoring.

Transition of treatment payment. This payment is made when a patient begins a new line of therapy or ends treatment without an intention to continue. The idea is to compensate (in a lump sum) for the additional time involved in treatment planning and patient education.

Again, 2 payment levels are recommended, with higher payments for a patient who has a recurrence while off treatment.

Continued FFS payment for some CPT codes. Some activities would retain current CPT code–based payments, such as laboratory tests, bone marrow biopsies, and the use of portable pumps.

The criteria for determining payment levels within each component of the proposal would be standardized by Medicare.

“The appeal of this proposed model,” said ASCO Clinical Practice Committee Chair Anupama Kurup Acheson, MD, Medical Oncologist, Providence Cancer Center Oncology and Hematology Care Clinic, Portland, OR, “is that by incentivizing high-quality, high-value patient care—patients win, oncologists win, and ultimately the American people will win with a stable, sensible, sustainable health care system.”

Improving the State of the Art: Whatever It Takes
Under the proposed model, oncology practices will receive additional payments for participation in improvement of care initiatives. The initiatives include performance on instruments measuring quality of care, adherence to value-based treatment pathways, conservation of resources (ie, minimizing emergency department visits and avoidable hospitalizations resulting from complications of treatment), and participation in clinical trials.

“Oncologists are already integrating many of these best practices in their day-to-day work,” said ASCO Clinical Practice Committee Past Chair Jeffery C. Ward, MD, Medical Oncologist, Swedish Cancer Institute, Seattle, WA. “However, the current system does not recognize, incentivize, or reimburse for these critical components to high-quality cancer care.”

That said, Dr Ward and colleagues are not married to any single approach to payment reform. For example, just days after the above proposal went public, ASCO, in collaboration with the Community Oncology Alliance, announced that they had achieved “a unified set of principles” intended to guide the organizations’ respective efforts to achieve payment reform in oncology.

Going forward, such intraorganizational cooperation is key, stated Dr Acheson. “If we do not work together to develop a solution for oncology reimbursement, then it will be forced upon us. We’ve seen the consequences that can bring—let’s get this done.”