Cancer diagnosis is devastating for patients and their families. More than 1.6 million people are diagnosed with cancer each year in the U.S. A rising incidence, aging population, and advances in care make cancer burdensome on both patient and society. Unfortunately, costs in advances do not correlate with outcomes. Hence, importance of “value” comes into play. In health care, value is defined as health outcomes achieved per dollar spent.
Expenditures associated with surgery and radiation treatments are relatively fixed. However, expenditures associated with cancer drugs, imaging and diagnostics, and hospital use are certainly modifiable. Since 2000, median monthly costs for drugs have increased steeply and median monthly income has plateaued. How do we address this issue without a single entity, payers, pharmaceutical companies, suppliers, or providers taking a loss over the long run?
Oncology Care Model (OCM) is a specialty model designed by the Center for Medicare & Medicaid Innovation (CMMI) Center with the goal of providing high-quality, highly coordinated care at the same or lower cost to Medicare. Practices across the U.S. have entered into payment arrangements with the Centers for Medicare & Medicaid (CMS) that include financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients.
CMS is also partnering with commercial payers in the model. The practices participating in OCM have committed to providing enhanced services to Medicare beneficiaries, such as care coordination, navigation, and adherence to national treatment standards and guidelines for care. Currently, there are 187 practices and 14 payers that have entered into agreement with CMS.
OCM incorporates a two-part payment system for participating practices, creating incentives to improve the quality of care and furnish enhanced services for beneficiaries who undergo chemotherapy treatment for a cancer diagnosis. The two forms of payment include a per-beneficiary Monthly Enhanced Oncology Services (MEOS) payment for the duration of the episode and the potential for a performance-based payment for episodes of chemotherapy care. An episode comprises a 6-month period from commencement of chemotherapy. MEOS payments are $160 per month ($960 for a 6-month episode).
CMS Quarterly Feedback Reports
Mortality rate for Medicare beneficiaries treated at the practice and its comparison to other practices nationally are outlined in these reports.
In addition, end-of-life metrics are provided as well. During management of cancer, there comes a point when performing an intervention to gain quantity of life is not balanced with its impact on quality. For patients and families in such situations, hospice care can be beneficial to manage symptoms and provide grief related services. Studies have shown that duration on hospice improves quality of life, has no negative impact on quantity of life, and keeps patients in an environment they are more comfortable being in (i.e., home versus hospitals).
Some of these metrics include hospice care within 30 days before death, days of hospice care within 90 days before death, percentage with hospital use within 30 days before death, percentage in the intensive care unit within 30 days before death, and percentage receiving chemotherapy within 2 weeks before death.
These reports list all cause expenditures on Medicare beneficiaries and also compare them to other OCM and non-OCM practices.
The table below lists some of the expenditures categories. (Note: they can vary between practices.)
Detailed information on chemotherapy utilization
Chemotherapy is the largest contributor to cancer episode expenditure. Comparison to other practices is a vital self-examination tool. Herein lies the opportunity—practices should use efficacy and toxicity data first and then cost to select drugs and their schedule of administration.
Results of surveys are mailed out to patients across several domains including, access, communication, information exchange, enabling patient self-management, and shared decision-making.
Can MEOS Payments Reduce Expenditures?
Care of the oncology patient is extremely complex.
The health care team perspective
Multidisciplinary treatment planning, sophisticated diagnostic testing, and high-acuity population requiring frequent hospitalizations are some of the reasons communication gaps can occur. These emphasize the need for care coordination.
From a patient perspective
Patients can get easily overwhelmed due to complexity of medical information. In addition, there are a myriad of psychosocial, financial, nutritional, advance care planning, and end-of-life issues. These emphasize the need for comprehensiveness of care.
Utilizing the MEOS payments in resources for care coordination (e.g., navigators), behavioral health, financial advocacy, social support, nutritional support, and palliative care can place the patients on more stable footing and prevent gaps in care. This will ultimately limit emergency department and inpatient hospital use, increase patient satisfaction levels, and reduce expenditure.
How Are Performance-Based Payments Calculated?
Performance-based payments (shared savings) will be the ultimate validation of success in practice improvement strategies provided there is no negative impact on mortality. CMS calculates benchmark cost for an episode taking into account age, sex, comorbidities, type of cancer, geographic location, and use of novel therapies. The methodology that calculates the benchmark cost is outside the scope of this article. If actual expenditure is below anticipated expenditure, practices are eligible for a performance-based payment.
A simplified version of the amount of performance-based payment received by the practice include the following: (Anticipated - Actual expenditure) x Performance Multiplier
Performance multiplier is calculated by using claims-based data on hospital admissions, emergency department use, and hospice utilization, as well as patient-care quality data submitted by practices.
Given how rapidly treatment of cancer can change, trying to estimate and standardize expenditure in cancer episodes is a very challenging task. CMS must be applauded for starting this initiative. No doubt, the OCM has its challenges—being nimble and making adjustments based on real-time experiences and constructive criticism will be vital for CMS to succeed in this endeavor. Drug utilization and hospitalizations are large contributors to expenditures, and small changes in a positive direction for those two facets without negatively affecting mortality will have a large impact. Value-based care will be part of cancer management in the near future.
SAMEER MAHESH, MBBS, is Hematologist Oncologist, Medical Director of Oncology Process Improvement, and Principal Investigator-Oncology Care Model at Summa Health System, Akron, Ohio.