The Push Toward Value-Based Payment for Oncology

Wayne Kuznar

July 2015, Vol 6, No 6 - Value in Oncology


Chicago, IL—A transition from reimbursement based on volume to reimbursement based on value has begun to emerge, said speakers at the 2015 American Society of Clinical Oncology meeting in a session on payment reform. The transition will be clumsy, with competing and potentially mutually exclusive incentives.

The evolution of reimbursement is increasing risk, said Blase N. Polite, MD, MPP, Associate Professor of Medicine, and Chief of Quality Hematology/Oncology, University of Chicago School of Medicine. Fee for service has transitioned to pay for performance, in which at least some pay is tied to quality measures, with small bonuses and penalties for meeting or failing to meet these measures.

“What we’re starting to see more of are shared-savings models, where you’re held accountable for a certain amount of cost…and sometimes there’s no downside risk,” Dr Polite said. “But you’re still paid on essentially a fee-for-service basis.”

Isolated bundle payments, partial blended capitation, and full or global capitation are models further down the value-based reimbursement model, to a point in which hospitals and physicians band together to receive single fixed monthly payments for enrolled health plan members, and payment is made on a per-member basis.

The oncology care model proposed by the Center for Medicare and Medicaid Innovation (CMMI) features a 6-month episode of payment that begins when chemotherapy starts, either orally or intravenously. Multiple 6-month episodes are allowed, as long as the patient is receiving chemotherapy. A patient management fee of $160 is paid monthly to the practice throughout the 6-month episode.

A benchmark spending amount is set for each practice, based on its cost history and adjusted for risk. A target price is then established, from which Medicare discounts 4%. “The $160 that Medicare pays you is not really a payment; it’s an interest-free loan, because that essentially gets put back into your target price,” said Dr Polite. “There is an option for a 2-sided risk adjustment starting in year 3, where instead of 4% off the top, they take 2.75% off the top and then you share in savings and loss, with some protections.”

“The rub is, you’ve got 3 years, and if you haven’t achieved savings for Medicare, they will kick you out of the program.”

One problem with the model is that if your practice has already been providing high-quality care at a low cost, your benchmark will be set accordingly and achieving savings will be difficult. “The folks who are probably best positioned to make money off of this are those who have very high costs but at the same time deliver very high quality,” Dr Polite said.

The Medicare Access and CHIP Reauthorization Act of 2015 is legislation that prescribes physician payment updates and incentives, and encourages physicians to achieve quality and resource utilization metrics, as well as participate in alternative payment models. Payment under this act is based on quality measures comparable to the Merit-Based Incentive Payment System. Resource utilization and quality reporting make up more than 50% of the system, which starts in 2019. Ultimately, said Dr Polite, oncologists should be asking for a system that:

  • Rewards them for restraining unnecessary costs
  • Rewards them for achieving high-­quality care using cancer-specific quality metrics
  • Does not penalize them for costs that are not in their control (ie, drug prices)
  • Does not penalize them for doing the right thing for the patient.

COME HOME for Savings

Barbara L. McAneny, MD, described her COME HOME initiative, which was awarded a grant from CMMI. Dr McAneny is Chief Executive Officer and Chief Medical Officer for Innovative Oncology Business Solutions, the company that manages the COME HOME program.

The program has multiple components, including the robust use of information technology; an ongoing relationship with a personal physician to provide continuous and comprehensive care; physician-directed team care; ­integrated/coordinated care, evidence-based medicine and performance measurement to ensure quality and safety; enhanced access (such as late hours and same-day appointments); and payment to recognize the value-­add of a medical home.

The infrastructure for an oncology medical home requires a triage system. “The triage system has to screen out those people who are actually having a heart attack from those people who have left-sided rib pain from their metastatic breast cancer,” said Dr McAneny.

She continued, “You have to be able to function a bit as an urgent care, and be able to take care of those things in real time.”

Triage pathways must address the management of the symptoms of cancer and cancer therapy, because aggressive symptom management at the practice level may translate into reductions in emergency department visits and hospitalizations. This goal also supports same-day appointments for antibiotics, fluids, and acute follow-up of reported symptoms.

Through March 31, 2015, COME HOME has enrolled 26,548 patients, of whom 88% have had ?1 triage encounters, 21% have had ?1 same-day appointments, and approximately 33% could be managed over the phone.

When patients were asked what they would have done if a same-day appointment had not been available, 20% said they would have gone to the emergency department, which supports the contention that the triage system avoided emergency department visits. Another 20% of patients would have waited until after hours to call the physician, and 10% would have stayed home. “I don’t want my patients staying home if they’re sick,” said Dr McAneny. “I want them to get help.”

The avoidance of emergency department visits and inpatient admissions with the triage system saved Medicare an estimated $1.6 million monthly over the 7 practices participating in COME HOME, she said. Based on the infrastructure costs and the estimated savings, the return on investment to the Centers for Medicare & Medicaid Services with the COME HOME program is approximately 38.4%.