Shaping the future of alternative payment models in oncology

New payment models
/ Healthcare

Optimal Oncology Alternative Payment Models, December 2019

The Centers for Medicare & Medicaid Innovation (CMMI) recently released the draft for Oncology Care First (OCF), a new oncology payment model projected to launch in January 2021 as the successor to CMMI’s Oncology Care Model (OCM).

OCF affirms CMMI’s commitment to shift away from the status quo fee-for-service (FFS) payment paradigm to one that incents value-oriented, patient-centered care and builds on OCM. OCF, as it is currently conceived, meets CMMI’s stated goal of having a single alternative payment model (APM) dedicated to managing cost and quality for Medicare cancer patients.

CMMI’s announcements of OCF and other primary- and specialty-care payment models have raised questions on what the end state for oncology APMs looks like. This question was top of mind for members of the oncology APMs advisory council, which gathered in November 2019 in Washington, DC, for its third meeting. The council, launched in late 2017, gives leading designers and implementers of oncology APMs the opportunity to learn from one another and catalyze new thinking and approaches to improve pilots in this space. Participants addressed several perennial issues, including accountability and risk, the cost of drugs, meaningful outcomes measurement, and the utility of emerging tools such as electronic patient-reported outcomes (e-PROs). These challenges continue to underlie conversations in this space, as do the implications of the one-size-fits-all approach to oncology payment reform for Medicare that CMMI is spearheading through its OCF proposal.

During the meeting, participants considered the following topics:

  • Challenges presented by the coexistence of oncology and primary-care APMs

  • Acceptable risk and risk mitigation strategies for practices

  • The cost of drugs in APMs

  • The end state of oncology APMs

  • New perspectives on oncology APMs: self-ensured employers and patients

Conversations on the above topics yielded several key takeaways:

  • The coexistence of specialty and primary APMs presents several challenges, particularly in the development of new oncology APMs. More data is needed to demonstrate the value of dedicated oncology APMs in areas where accountable-care organizations (ACOs) are already in place. That said, many are concerned about the ability of ACOs to effectively manage quality and bend the cost curve in cancer care.

  • OCM practices have nuanced perspectives on two-sided risk and are taking diverse actions based on their appetite for risk. Some larger OCM practices with more resources are becoming more comfortable with taking on risk in the program, while some smaller ones are not. Looking beyond OCM, practices of all sizes remain uncomfortable with being held accountable for the total cost of care and would prefer that future models carve out elements that are more difficult for clinicians to control.

  • Drug costs in total-cost-of-care APMs remain a persistent challenge with no easy answers. Most problematically, currently proposed solutions for this issue, such as integrating value-based drug contracts between providers and manufacturers into APMs, continue to come up short. In the words of one provider, such contracts are problematic because of “all the hypotheticals and lack of data.” More granular clinical details would help in the creation of more accurate targets that would presumably reflect appropriate treatment costs and adjustments, but the models cannot be overly complex or too finely stratified, otherwise, as one participant observed, “We’re returning back to fee for service.” Many providers prefer models that carve out drugs (especially novel therapies). Some are open to taking on risk for supportive-care drugs, and many support giving importance to adherence to clinical pathways when measuring provider accountability.

  • Slowly but surely, bundle-like models are starting to emerge, signaling that the end state for oncology APMs may—for some payers—incorporate population-based approaches. Participants noted they primarily see these bundles accelerating in radiation oncology and surgical oncology, but as evidenced by OCF, some bundling may soon start to materialize for certain services within medical oncology. Participants underscored that more debate is needed on whether supportive services like nutrition or mental healthcare could be included within bundles or similar capitated payments.

  • Self-insured employers are becoming a more prominent force in new experiments in managing cost and quality in cancer care, though questions remain about the sustainability and scalability of these approaches. Participants see employer models as offering opportunities for innovation and for testing specific research questions, given that employers often have considerable resources and flexibility for innovation. Some are concerned that centers of excellence (CoEs) and second-opinion models of the sort being offered by some of the nation’s largest employers like Amazon and Walmart may diminish the relationship and value offered by local community oncologists.

  • How to engage patients appropriately in APMs remains a challenge. Particular issues include whether and how best to use e-PROs and how to incent better care coordination with the patient. In light of the recent announcement of OCF proposing e-PROs as a potential additional transformation component, the group debated the value and utility of PROs for clinicians. They were conflicted on whether PROs could be meaningfully used to measure quality and inform prompt clinician decision making. Regardless, all agreed that care coordination continues to need improvement as patients are “still getting lost in the system.” Patients’ role in contributing to their own care management and individual patient variables such as social determinants of health need to be considerations in shaping APMs, many council members emphasized.