Practice Matters

News from Lola Butcher about health policy and practice management issues of importance to oncologists

Sunday, August 24, 2014

Bundled Payments: The Right Idea for Payment Reform in Oncology?

If you have not been following the conversation about bundled payments for cancer care, it is time to get up to speed. A consensus that bundled payments is the best payment reform strategy is emerging, and we will see many pilot and demonstration projects starting soon.


The Centers for Medicare & Medicaid Services has been experimenting with bundled payments for orthopedic and cardiac procedures for years and it expanded the concept to include more than 40 medical conditions when the Bundled Payments for Care Improvement initiative launched last year. Oncology services are not included yet, but CMS is definitely planning to give bundled payments for cancer care a try.


At a webinar last week, Patrick Conway, MD, chief medical officer for CMS, and Erin Smith, CMS’ point person for new payment methods for specialty care, shared CMS’ current thinking about a new oncology care model. Scroll down to slide 11 to see the nitty-gritty details.


In another presentation, Ezekiel Emanuel, MD, PhD, chair of medical ethics and health policy at the University of Pennsylvania, reported that a consortium of oncologists, payers, patient groups, and policymakers convened by the Center for American Progress (CAP), where he is a senior fellow, is enthusiastic about bundled payments for cancer care. That said, I got the impression that CAP and CMS are working toward the same goal, but have diverging ideas about how to get there.


Members of the CAP consortium are planning to publish a recommended model and guiding principles and encourage a multi-payer demonstration, Emanuel said.


To date, the consortium has agreed that:

·    Bundled payments should start with high prevalence cancers, specifically metastatic non-small-cell lung cancer and adjuvant and metastatic colon cancer.

·    Both private health plans and government payers should participate in a bundled-payment demonstration so that oncology practices have enough patients covered by the new payment system to make it worth their participation.

·    Payment episodes should be based on the total cost of care (meaning everything from drugs to hospital inpatient care.)

·    The oncologist should be the “accountable” provider, as opposed to a hospital, even if a hospital employs the oncologist.

·    The financial risk to oncology practices should be phased in over time to give practices the opportunity to make the changes necessary to succeed with bundled payments.

·    All payers and providers should use a standardized set of meaningful quality measures. To see what CAP is thinking, scroll down to slides 11-13 of Emanuel’s presentation to see examples of the quality measures its members have in mind.


Bundled payments—is this the right idea for payment reform in oncology? Let me hear what you think!