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Practice Matters
News about health policy and practice management issues of importance to oncologists
Saturday, August 01, 2015

 Bruce Pyenson, FSA, MAAA, a principal at Milliman in New York, looks at the business of cancer care through the lens of his work as a consulting actuary. As he scans the payment reform landscape, his attention is riveted on the Centers for Medicare & Medicaid Services and its plans for the Oncology Care Model (OCM).


The OCM will kick off next year as a voluntary program limited to a relatively small number of practices—and they will receive what he calls a generous incentive--$160 per patient per month for six months plus the potential for shared savings—with no downside financial risk.


He sees this as Medicare’s first step toward making oncologists financially responsible for the quality and cost of the care they provide.


“I suspect that Medicare has decided there’s a lot of room to improve in what it is paying for oncology care,” he said in an interview. “One of Medicare’s overall goals is to reduce spending. The take-home for oncology practice is to be flexible enough to adapt to whatever programs Medicare will be launching.”


Which of the new cancer-specific models do you think hold the most promise?  

Bruce Pyenson:  “Medicare’s announcement about the Oncology Care Model certainly has shaken the landscape. Medicare is perhaps the world’s largest health insurance company, and in recent years, it has piloted various payment reform models and then fairly quickly implemented them on a bigger scale. The program they have announced for oncology care is on a voluntary basis--currently.


“There are certainly other models for alternate payment structures being tried on a small scale by other payers, but because Medicare is such a big payer, other payers will look at what Medicare is doing rather than inventing their own system.


“The payment proposal from the American Society of Clinical Oncology is complex, so it might need simplification if it’s going to compete against Medicare’s OCM.”



The accountable care organization (ACO) is one new delivery and payment model that has really caught on with private insurers, and the government continues to push its Medicare ACO programs, which have had mixed results. What are the implications for cancer care if the ACO movement continues to gather steam?

“An accountable care organization is a provider-based organization that, in some form, contracts to accept financial risk for the quality or cost results that it produces. An ACO’s contract with a payer can be set up in many different ways. For example, providers might get upside-only risk or they might get quality bonuses for good clinical performance. Upside-only--an opportunity to receive extra money for good performance--is often how risk contracts begin. But most observers think that accountable care organizations will be taking more substantial financial risk in the future—both upside and downside. The payer’s goal is to deliver high quality at a low cost to the payer.


“The big discussion in accountable care has been around primary care, because primary care providers are potentially the gatekeepers for other care that people receive and also because  primary care can play the coordinator role. However, oncology is an important cost driver, especially for the Medicare population. Although oncologists do not have the control or oversight over the full spectrum of care that their patients get, oncology is associated with so many healthcare dollars that it is a very important component.


“So far, oncologists are not very visible and may not even be at the table in accountable care discussions. But delivering high-quality, cost-effective care is going to be an important issue for oncologists as accountable care evolves.”



You have called this “the era of provider risk.” What types of cancer care practices will succeed in an era of provider risk--and which are the most vulnerable?

"If the new payment models gain traction, practices that are more efficient at delivering care are the practices that will succeed. Efficient care includes not just the care delivered by medical oncologists, but the care that they might influence such as radiation oncology or side-effect management.



Independent oncology practices are less expensive for chemotherapy than hospital outpatient departments. Most payment reform initiatives are trying to lower the costs of care to the payers, whether they are private insurers or the government. Does this mean that independent oncology practices will be favored in payment reform proposals?

“Care delivered at community oncology practices currently is less expensive than hospital outpatient practices for a variety of reasons, and payers of course prefer the less expensive sites. However, there seems to be a lot of interest in “cost neutrality”—where fee schedules do not differ by site of service. That topic is getting a lot of attention from the Medicare program, but many ACOs may also be motivated to remove the cost differential between their community practices and their hospital outpatient practices—after all, under risk arrangements, the ACO may be responsible for the costs.”



What should oncology practices be doing to position themselves for success in this time of payment reform experimentation?

“If practices have enough volume that they can afford to assign someone to watch what’s happening in their community—in  their medical neighborhood, if you will—and what is happening with payers, that would be a good thing to do as part of managing the business.


“They need to look at the opportunities for new payment models. All of them take a significant amount of time and intellectual resources to figure out, and some financial sophistication to think through the consequences and scenarios. Risk is actuarial, and organizations need actuarial expertise.


The world is certainly changing, and practices, whether bigger or small, need to become educated about the different payment models.


“One important thing is to not automatically reject innovative models that require changes to the practice. The normal tendency for successful practices is to say ‘Well, why change? Why do anything?’ However, the fast pace of change and the scale of change suggest to me that few organizations will be unaffected.


Medicare’s Oncology Care Model seems to be very low risk for oncologists and has a potentially large upside, but it may require most practices to make some substantial changes. The right question for oncology practices might be ‘How?’ and ‘When?’ rather than ‘Whether?’ The new payment models are a gateway to the future.”

Monday, June 29, 2015

People frequently use the term “unique” when they mean “unusual” or just “I think this is noteworthy even though lots of other people are doing the same thing.”


But when Larry Strieff, MD, used the term “unique” to describe Hill Physicians Medical Group’s (HPMG) payment innovation for cancer care, I think he was using the term correctly.


Strieff is Oncology Chief for HPMG, the largest independent practice association (IPA) in northern California, with more than 3,800 physicians serving more than 300,000 patients.


An IPA is a group of independent physician practices that jointly negotiate contracts with insurers; in Hill Physicians’ case, the IPA receives a flat per-member, per-month fee in exchange for providing all the outpatient services for a population of patients. The IPA then pays the individual physician groups for their work. Thus, the IPA benefits financially if its physician groups curtail unnecessary expenses.


For the last five years, a subset of HPMG’s oncology practices have been experimenting with a bundled payment arrangement they call the Oncology Case Rate, and most of its other practices are clamoring to join. The reason: The Oncology Case Rate has incentivized participating groups to sharply reduce costs while increasing the quality of care and patient satisfaction—and increasing the payouts to physician groups by 11 percent, compared with the physician groups that do not use the Oncology Case Rate model.


To earn the quality management fee, practices must:

·        Perform well on the Quality Oncology Practice Initiative measures collected by the American Society of Clinical Oncology;

·        Decrease their patients’ hospitalizations and emergency room use;

·        Use less expensive drugs; and

·        Improve patient satisfaction.


Key is How the Bundle of Care is Defined

All those goals are pretty standard in the cancer care payment experiments we are seeing around the country. The thing that make HPMG’s innovation unusual—and perhaps truly unique—is how the “bundle” of care is defined. The case rate is based on anatomical site, not stratified by stage; thus, the site of the origin of the cancer places the patient into a cohort and the application of parenteral chemotherapy starts the case rate for that particular patient. And the period of care stretches for three years, which is much longer than most bundled payments for oncology.


“That’s swimming upstream, and everyone we spoke to said it isn’t going to work,” Strieff said. “All I can tell you is we have almost six years’ experience and the data that would suggest it’s working for us.”


In a recent interview, Strieff, who practices at Epic Care, a large cancer practice in the East Bay area, told me about the experience with the Oncology Case Rate so far.


How did you come to develop the Oncology Case Rate concept? When did you start using it? And how is it working out so far?

Larry Strieff:  “We began looking at ways to control our oncology costs in 2008 and 2009. We were feeling the same economic pressures as others in the health care arena—that is, an escalating spend pattern in the range of 15 to 20 percent per year. That was a clearly unsustainable trend. We then examined our own experience within our network, and we found the primary driver of those increasing costs was the rapid adoption and widespread use of very costly parenteral oncolytic drugs. We also recognized that we were simultaneously facing two realities: The first was a finite amount of financial resources, and the second was there was an explosion in the area of basic research in the area of genomics and submolecular description of the genetic alterations in the human genome that are causally connected to the development of malignant disease.


“This unparalleled development of knowledge in the area led to a virtual arms race among the drug companies to produce more effective and more specific biological and targeted agents. These drugs and these agents held great promise of benefit for our patients, but they were, without exception, very expensive.


“At the same time, it struck us as quite obvious that we were trying to manage these two 21st century realities with a 20th century billing and payment system that was based on the old ‘buy-and-build’ paradigm--that is, my practice would buy the drugs and then sell it to the patient. This, unfortunately, led to a chasing of the profit margin across the spectrum of care that was associated with these new agents. These new agents were both expensive and had a large profit margin. So this old payment system had led inadvertently to an undesirable practice pattern that was rewarding the selling of the drugs over cognitive services of the doctor.


“These cognitive services had always rewarded clinical judgment, skillful patient management, and analytical thinking versus the selling of drugs. We tried to develop a system that would enable the doctors to move away from the buy-and-build mode of practice and to return to the more desirable functions of delivering cognitive services.


“So we launched the program in early 2010 with the initial practice in Sacramento and added a second practice in 2011 in the East Bay Area of San Francisco. At this point we have a little more than five years’ experience with the first practice.”


How does the Oncology Case Rate work?

“This is based on the placement of patients into groups, or cohorts, based on the anatomical site of the primary tumor. For instance, the breast cancer patient would be in the breast cohort. The reimbursement for the care of these patients is paid monthly, and it’s based on our previous three years of financial experience for patients in that cohort, treated within our network with oncolytic therapy. We know from our data what the chronological spend pattern for each diagnostic cohort is, and the payment is structured accordingly.


“There is a unique and quite controversial aspect to our program, which is the manner in which patients are allocated to the cohorts. We allocate on the basis of the anatomical site of the tumor, and whether or not patients have received parenteral chemotherapy. We specifically do not stratify or place patients in cohorts based on the stage of disease or cell type, age, or comorbid status. This is a departure from what almost every other bundled payment program uses as methodology, and actually represents a type of population management.


“Another aspect of our system is that we pay, not the individual doctor, but rather his or her group. This helped to smooth out the statistical risk of an occasional outlier, and at the same time, helps to foster what we term ‘intragroup monitoring’ for best practices.


“An additional aspect we think is unique, at least in our experience, is that we have included a stop-loss provision. This is placed to protect the doctor group from unexpected expense associated with an exceptionally expensive patient, and it avoids the doctors from being financially penalized in doing the right thing at the right time. This avoids the prospect of an expensive outlier patient causing undue financial hardship on the practice.


“The last aspect, or building block, of this program is what we call our quality management program. We survey the practices for three sets of quality measures. The first is the clinical scores on the ASCO QOPI guideline measures. A second area we examine for practice pattern is in the utilization of inpatient services, emergency department and infusion centers. And the third is we survey the practice scores on patient and physician satisfaction.


“This latter part of the program—this quality management program—constitutes 10 percent of the total reimbursement to the doctor, so it has proved to be a very significant agent for change in practice patterns.”


What impact has the Oncology Case Rate payment model had on quality measures? On patient satisfaction? On patient outcomes?

“As I mentioned earlier, we do measure the clinical quality metrics using the QOPI guidelines, and our scores on the QOPI guidelines for our practices are now 98 percent. That’s both self-reported and by chart review confirmation here at Hill Physicians headquarters.


“The utilization on the inpatient side has decreased by 14 percent. We’ve seen no increase in the use of infusion centers. The patient satisfaction remains at over 90 percent.


“Our physician satisfaction metric is a little different from what people might anticipate. We are actually measuring the satisfaction of the referring doctors to the oncologist. The most common complaint patients have in managed care is: ‘My doctor doesn’t talk to my other doctor.’ So we do make sure of the effectiveness of my communication with my colleagues who refer patients to me. We believe that the issue of poor communication represents suboptimal care, so we think that particular measurement is an important one.


“We have also examined our survival figures over the last five years, and they are at least the same—and in some cases slightly better—than those for our oncologists who are in our network and being paid on the fee-for-service basis.”


How has the Oncology Case Rate worked out financially for your practice?

“To answer your question, we decided to look at the financial performance of the fee-for-service practices in our network—because only half of our oncology patients are taken care of on the oncology case rate—and compare that with the financial performance for the groups who are in the case rate. Our most recent data shows that there is a positive yield of more than 11 percent for those practices in the case rate, as compared with their competition in the fee-for-service side.”


Do you think the Oncology Case Rate should be the future of cancer care payment? Why or why not?

“It’s my belief that some form of bundled payment will be the future of oncology going forward. I think that we will have different iterations of bundled payment, depending on local needs and opportunities, and I don’t think that one bundled payment system will necessarily work for everyone across the country. But I do think some variation on a bundled payment, such as a case rate, will be the future.


“I think that the future is going to require adaptation to other needs, including the inclusion of oral drugs, or Medicaid patients, or possibly including combinations of medical oncologists plus radiation oncologists, plus surgeons, and eventually other partners. So I think the approach of a bundled payment system has the most flexibility of any program that I’ve seen so far. Hill Physicians is looking at all of those possible scenarios as we go forward.”




Listen to a podcast of our conversation in OT's July 25 iPad issue.

Monday, June 22, 2015

If I were a cancer drug manufacturer, my palms would be sweating.


The American Society of Clinical Oncology today announced its idea for helping physicians and patients think about the value of new cancer treatments compared with the current standard of care.


ASCO’s “Value Framework” for evaluating new therapies by simultaneously evaluating three elements—clinical benefit, side effects and costs—was published today in the Journal of Clinical Oncology. 


ASCO’s Value in Cancer Care Task Force developed a way to compare those three elements for treatment regimens that been tested head-to-head in randomized clinical trials. The clinical benefits and side effects of each regimen are used to calculate a “net health benefit” score that represents the added benefit of a new therapy in comparison to the standard of care.


The goal is to provide a tool that physicians and patients can use to consider whether the toxicity and cost of a new treatment is a good tradeoff for an improved benefit, as measured by overall survival or progression-free survival. Because patients’ differ, not everyone will assess value in exactly the same way.


“It’s critical to distinguish between value and cost,” Task Force Chair Lowell Schnipper, MD, said in a news release.  “Sometimes the more valuable treatment will be the more expensive one and sometimes it won’t be. Ultimately, the definition of ‘value’ will be highly personalized for each patient, taking into account an individual’s own preferences and circumstances. For example, in the setting of advanced cancer, is length of life the most important goal or is quality of life? Is the proposed treatment affordable? That’s why we’re proposing to provide information on net health benefit and cost side-by-side.”


While the Value Framework will absolutely facilitate shared decision-making conversations between oncologists and their patients, it will also shine some hard light on expensive new treatments. Two of the four examples given in the JCO article show that the newer, more expensive treatment offers no net health benefit.


Does the Task Force have it right? ASCO is seeking feedback on its concept through Aug. 21. I am so curious to hear what you think -- Leave a comment to let me know!

Saturday, May 30, 2015




Many of the payment reform experiments for oncology currently underway are a step in the right direction, but are not the final destination. That is the assessment of panelists speaking in a session on the topic at the American Society of Clinical Oncology Annual Meeting (“Payment Reform in Oncology: The Way Forward”).


The Oncology Care Model (OCM) payment system, which the Center for Medicare & Medicaid Innovation (CMMI) will launch in a limited trial next year, and most of the shared savings programs that private insurers are trying are based on the existing fee-for-service system. Fee-for-service, of course, as its name suggests, incentivizes hospitals and physicians to provide more services to earn more fees.


“Any system based on fee-for-service is in tension with—if not ultimately incompatible with--the type of reforms everybody wants, which are decreasing hospitalizations and emergency room visits,” Blase N. Polite, MD, MPP, Assistant Professor of Medicine at the University of Chicago Center for Clinical Cancer Genetics and Global Health Medicine, said in an interview in advance of the meeting.


He said he thinks practices that can document that they provide good-quality care but have high costs can thrive in the new payment systems for a while because they can lower costs for payers and earn so-called shared savings for doing so. But many oncology practices that are owned by or tightly affiliated with hospitals will eventually see that if they continue to ratchet down hospital use to earn shared savings, hospital revenue losses will exceed the amount of shared savings that can be earned.


Despite his conviction that fee-for-service must go away, Polite says that doing so will present significant challenges. For example, many oncologists are evaluated on and have salaries based on work Relative Value Units, which are associated with the billing codes in the fee-for-service system. So a new way to assess an individual physician’s productivity will have to be determined.


That is why oncologists need to be engaged with payment reform experiments currently underway, identifying their strengths and weaknesses, and discussing solutions for the long term: “If the world changes as it should and as it is going to have to, are we prepared?” he said. “What does the future look like and how do we get from here to there?”


ASCO’s Pay Proposal

ASCO issued its own payment reform proposal, Patient-Centered Oncology Payment (PCOP), the week before the meeting (see below and The new proposal, which significantly expands on the first iteration released last year, incorporates feedback from a wide range of ASCO members.


“We believe that one of the reasons [the first proposal] did not get the attention it deserves is because it did not directly address drugs,” said the session’s chair, Jeffery C. Ward, MD, an oncologist at Swedish Cancer Institute in Edmonds, Washinton, interviewed before the meeting. “People are waiting for a payment reform proposal that includes drugs, but we think that is misguided.”


Although the high cost of anticancer drugs is a concern for all stakeholders, a payment model that puts oncology practices at financial risk for the drugs they prescribe is not appropriate. “Rather than myopically focusing on limiting physician prescribing of cancer drugs, the real goal should be: ‘How do we globally provide high-quality care and do it for less money? How do we bring value to the equation?,” he said.


The new ASCO proposal includes three approaches to payment reform, giving a practice flexibility to find the model that corresponds with its capabilities and capacity to take on financial risk. Each of the approaches is expected to save money for the Medicare program and maintain or improve the quality of care.


“We will make the argument that this should be considered a viable alternative to the CMMI model and that there should be testing of several models, as opposed to just one, before we decide the best way to provide high-value care,” Ward said.


ASCO Model vs. CMS Model

Also interviewed before the meeting, Harold D. Miller, President and CEO of the Center for Healthcare Quality and Payment Reform, has been working with ASCO members on the payment reform proposal for two years. His analysis shows that oncology practices, which are typically paid only for face-to-face visits with patients and for infusion services, receive only about 10 percent of the total spending on a patient’s cancer care. 


Looking at Medicare and private-payer data, Miller found that, on average, about $45,000 is spent per cancer patient receiving chemotherapy; about 50 percent of that is spent on drugs, 10 percent on hospitalization and emergency department use, 10 percent on physician services, and the rest on testing, images, and other services.  This means, he said, that paying oncology practices more would not increase total cancer care spending by very much, and reducing avoidable spending in the other categories could more than offset increased payments to oncology practices.


The current payment system does not adequately pay oncology practices for the time-consuming services needed to determine the most appropriate tests and treatments when a patient first engages with the practice.


“That is when an oncologist incurs a lot of time, which doesn’t all happen face-to-face with the patient, but includes talking to pathologists, doing research on the best treatment alternatives, looking at test results, and so forth. And that is also the time where there is a huge amount of non-physician staff interaction with patients, such as patient education and financial counseling. None of that is paid for under the current system.”


Similarly, oncologists today are generally not paid for care-management services delivered to patients during the treatment phase of their care, even though those services can avoid expensive hospitalizations and emergency department visits.


“Our idea is that if we can better match payments to the actual patient needs and to the services that the oncology practice provides to meet those needs, we can improve care and reduce overall costs.”


Miller, who titled his talk “Better Ways to Pay for Cancer Care: Creating Win-Win-Win Approaches for Oncologists, Cancer Patients, and Payers,” said he believes the government’s OCM proposal shares some basic principles with ASCO’s PCOP, but that it misaligns incentives. For example, even though advance care planning and appropriate use of hospice care will be quality measures in the OCM program, the higher payments in OCM are tied to chemotherapy treatment.


“The Medicare proposal is good in the sense that it does one of the things that everyone agrees needs to be done: give more resources to the practices and flexible payments that they can use to provide better care management,” he said. “But the payments are still linked to chemotherapy treatment. So you have to give the patient a treatment to be able to get the payment, and the payments end when treatment ends, even though the patient still needs support.”


He said he also doesn’t think the OCM’s use of six-month episodes makes sense. For example, the first infusion of chemotherapy triggers a six-month episode, which means six monthly payments of $160 each. If chemotherapy continues after that six-month period, a new episode—with another six months of payments—begins.


“If a patient is getting a six-month regimen but it takes six months plus one day to complete the regimen, CMS says it’s two episodes—and the practice gets another $960,” he said. “Now, to me, that creates a pretty bizarre set of incentives for oncology practices.”




ASCO’s Payment Reform Proposal

Earlier this month, the American Society of Clinical Oncology proposed Patient-Center Oncology Payment (PCOP), which includes three approaches to paying for cancer care.


Basic PCOP

Practices paid under this system would continue to be paid as they are today for services, including evaluation and management (E&M) services, infusions of chemotherapy, and purchase of drugs administered or provided to patients in the practice setting.  They would also receive four supplemental, non-visit-based payments to support diagnosis, treatment planning and care management. Practices could bill payers for four new service codes:

   New patient treatment planning: $750 per patient;

   Care management during treatment: $200 per month per patient;

   Care management during active monitoring: $50 per month per patient during treatment holidays and for up to six months following the end of treatment; and

   Participation in clinical trials: $100 per month per patient during treatment and for six months afterward.

In return for receiving these payments, an oncology practice would be held accountable for:

   Avoiding emergency department visits and hospital admissions for complications of cancer treatment;

   Appropriate use of drugs, laboratory testing, and imaging studies, and use of lower-cost drugs, tests, and imaging where evidence shows they are equivalent to higher-cost treatments and tests;

   Delivery of high-quality care near the end of a patient’s life; and

   Commitment to care consistent with ASCO quality standards.


Consolidated Payments for Oncology Practice Services

This system would replace the 58 codes oncology practices currently used to bill for services with payment codes that fall into three major categories:

       New patient payment;

       Treatment month payment; and

       Active monitoring month payment.


Bundled Payments for Oncology Care

This approach would set a target spending level each month to cover the services delivered by the oncology practice and some or all of the following: hospital admissions, laboratory tests, imaging studies, and/or drugs.Target levels would differ for patients with different types of cancer, stages of cancer, comorbidities and other factors.


Friday, May 29, 2015

When the American Society of Clinical Oncology released its initial cancer care payment reform proposal last year, I was surprised, because that’s certainly outside the purview of the typical medical society. But I was not surprised when its idea seemed to fade without notice; after all, many payers have their own payment reform ideas and are finding oncology practices eager to join in the experiments.


However, ASCO is audacious (in the good sense of that word), and it was not deterred by the stony silence that greeted its payment proposal. Rather, it went back to work and issued an even more comprehensive idea last week.


Undeterred that the Centers for Medicare & Medicaid Services (CMS) has its own idea for how oncologists should be paid, ASCO is insisting that its Patient-Centered Oncology Payment get a full hearing.


I was lucky to speak with Robin Zon, MD, an oncologist at Michiana Hematology Oncology and chair of  ASCO’s clinical practice committee, to find out why.


Why did ASCO want to put forth its own payment reform idea?

Robin Zon: “ASCO is very sensitive to the fact that oncology practices are struggling to exist in a payment structure that fails to support many of elements critical to the care of patients with cancer. ASCO knows this, as members have been reporting this to society, as well as from our recent national census, which confirms that there are many pressures that practices are facing on a daily basis.


“ASCO firmly believes that physician leadership is essential to achieve in a payment system that supports and incentivizes both high-quality and high-value care. That payment system should be underpinned by three essential elements: higher and more flexible payment for oncology practice services; accountability for the cost of the oncology practice can control; and accountability for quality of care and patient outcomes.


“So a very diverse group of seasoned oncologists—all ASCO volunteers from all practice settings, including academic, hospital-affiliated community settings, and independent practice settings in the community—have proposed an alternative that allows the flexibility to deliver care in a way that meets the individual patient needs, in the environment in which the providers’ practice.


“Over the past year, this working group of volunteers has refined the initial model that was published about a year ago into what we are now referring to as the Patient-Centered Oncology Payment. And it has the three elements that I mentioned earlier.


“We acknowledge that there are certainly other payment demonstration projects in oncology, but they rest largely on a fee-for-service structure, which does not reflect the modern oncology practice. We understand that fee-for-service is a broken service, because fee-for-service doesn’t work.


“Why is that? First, there is low or no payment for the various services needed and wanted by patients, such as patient education, nursing evaluation and care coordination, social work, financial counseling to help patients get the drugs that they so desperately need, nutrition counseling so they know how to care for themselves as they try to heal from the treatment of the cancer; survivorship; palliative care; pain control; end-of-life support; as well as the cost and use of innovative technology.

“Then, you layer on top of that the fact that providers are penalized with a loss in revenue if they try to choose lower-cost treatments or fewer treatments, or switch the IVs to oral therapies. Finally, there is no payment for work outside of the face-to-face encounters.


“So ASCO’s model is designed to address these various shortcomings, and try to develop the payment structure that is patient-centered, as opposed to provider-centered, and provides the care that patients need and want.”



Please tell us how ASCO’s proposed payment system would work.

“Since oncology practices have different capabilities, different types of patients, and operate in different communities with different resources and challenges, ASCO has developed three options for reforming payments to practices, each of which implements the three essential elements in different ways.


“There’s a basic model that proposes additional payment for underfunded services, with payment adjustments based on performance in controlling unnecessary services and delivery quality care. So, this option would address the three essential elements of payment reform in the following way: First, there’s new billing codes for underfunded oncology practice services so that the oncology practice would receive increased payment to support diagnosis and treatment planning before treatment begins, care management during treatment months and active monitoring months, and management of patients receiving oral anti-cancer therapy.


“Second, there would be payment adjustments based on performance and avoiding unnecessary cost, meaning the oncology practice’s payments would be adjusted based on its performance in avoiding emergency department visits and inpatient admissions for preventable complications of treatment, using drugs and testing and imaging appropriately, and/or providing appropriate end-of-life care.


“Thirdly, the model proposes payment adjustments based on performance on quality metrics, wherein the oncology practice’s payment would be adjusted based on its performance on a series of quality measures.


“The other two options would be considered advanced, and would include a consolidated payment for practice services with adjustments in payment based on performance and controlling unnecessary services in delivering quality care.


“What this would include is very similar to the original model that was published a year ago, wherein there are bundled payments for oncology practice services. The existing--evaluation and management--service codes and infusion codes would, in fact, be replaced by three new types of payment, including a new-patient payment for services the practice delivers prior to the beginning of treatment; a treatment-month payment for services the practice delivers during a month in which the patient is receiving treatment; and then, an active monitoring-month payment for services during months when the patient is not receiving treatment, but is being actively monitored by the oncology practice.


“The third option proposes a virtual budget for both practice services and some or all other oncology-related services--again, with adjustments in payment based on performance and quality. That bundled payment would be a virtual budget created for one or more of the time periods defined in option 2. The virtual budget would be designed to cover the cost of both the services delivered by the practice during that period of time, and one or more categories of the other costs involved in the patient’s cancer care. So if the practice is able to reduce the cost of services below the budgeted amount, it could use the savings to better support patient care. And, of course, there would be accountability for costs not included in the virtual budget, so that the oncology practice’s payments would be adjusted based on its performance with respect to one or more of the services and costs that are not included in the virtual budget. And there would be payment adjustments based on performance on quality metrics, just as the other two options were structured and described.”


What is the status of ASCO’s proposal? Are any payers using it? Do you expect them to do so in the foreseeable future?

As I mentioned earlier, the model has certainly undergone significant revisions, based on the feedback from stakeholders including the broader ASCO membership. Currently, there is an implementation task force that is in the process of analyzing both clinical and claims data to evaluate how the structure would work in a variety of practice settings.


“In addition, this group is conducting extensive outreach to gain support and explore potential pilot projects with CMS, private payers, and large national employers, and we are hoping that there will be some of these pilot projects that will be in place by the end of this year.”


The Centers for Medicare & Medicaid Innovation (CMMI) is launching the Oncology Care Model concept this year. What do you think of that payment model? Do you think it will be popular with oncology practices?

“We believe that multiple models should be tested, and [CMS’s Oncology Care Model] is an important step in that direction. And yet, there are a number of similarities between the OCM model and ASCO’s basic version of the revised model. So we are hoping to work with the CMMI, building on their efforts to pilot more fundamental system reform.


“Our biggest concern, however, with the OCM is that it continues to rest on, and does not yet move past, a fee-for-service platform. We recognize that practices are in varying stages of transformation, which is why our model – basic option 1 – also adds a new code to the existing fee-for-service payment. However, we have also recognized that there are many practices that are prepared to take the next step toward consolidated payment, which offers greater accountability and more flexibility in care delivery. So we are very hopeful that CMMI and other payers are willing to make that journey with us.”


What do you want oncologists and practice managers to know about ASCO’s payment reform work?

“ASCO payment reform concept is a change to correct a longstanding mismatch between how oncologists actually practice and how care is paid for. This model has been designed by their peers. As I mentioned, it’s been developed by ASCO volunteers from diverse settings and diverse geographic areas. So it represents an opportunity to create our own path forward to a better system. It supports and pays for oncology care the way it is actually delivered, and it’s patient-centric. It empowers practices, and therefore, helps empower our patients.


“And, at the end of the day, this may, in fact, be the difference between the continued existence of community oncology care, and not.”



About the Author

Lola Butcher
LOLA BUTCHER, MPA, MA, an award-winning Contributing Writer for Oncology Times, writes about health policy and business trends. She is a frequent contributor to Hospitals & Health Networks, Modern Physician, Neurology Today, and other health care trade publications. This blog was recently recognized with an APEX Award for Publication Excellence.