The CMS Innovation Center plans to test a new oncology payment model intended to address the spiraling costs of cancer care and improve quality for beneficiaries.
As part of a broader federal push to reward hospitals and doctors for value rather than the volume of services they provide, the CMS is inviting oncology practices and solo practitioners to join a five-year test set to begin in the spring of 2016.
Private payers and oncology groups have already experimented with similar cancer-specific payment models. Though members of those groups commended the CMS for the initiative, they also expressed disappointment that it doesn't make a clean break from fee-for-service payments. Some also say the model's inclusion of drug costs in payment bundles might limit participation and steer oncologists away from expensive drugs that might benefit some patients.
Dr. Patrick Conway, chief medical officer and deputy administrator for innovation and quality at the CMS, said in a news release that the new model would lead to “better care, smarter spending, and healthier people." Interested providers were asked to submit letters of intent to participate an Oncology Care Model, a multi-payer payment and care delivery initiative developed by the CMS Innovation Center. A preliminary design of the program (PDF) was released in August.
Under the new model, the CMS will deliver episode- and performance-based payments designed to reward quality and care coordination. Participants will receive, for example, a monthly $160 care-management payment for each Medicare fee-for-service beneficiary during care episodes. Those episodes start during the beneficiary's initial chemotherapy treatment and terminate six months later.
The CMS Innovation Center is already testing bundled payment initiatives for acute and post-acute care visits related to 48 other conditions, including heart care, diabetes and infections. This is its first for cancer care. Private payers and cancer groups, however, have already been testing similar models.
Participants in a collaboration launched in October 2009 between five medical oncology groups and insurer UnitedHealthcare announced last summer that they'd saved $33 million. The American Society of Clinical Oncology also proposed a consolidated payment method last year.
ASCO commended the CMS for seeking new approaches to physician payment, but in a statement Thursday the group's chief medical officer, Dr. Richard Schilsky, expressed concern (PDF) that the CMS is pursuing adjustments to "a broken fee-for-service system” rather than fundamental reform.
Dr. Blase Polite, an oncologist and assistant professor of medicine at the University of Chicago, called the CMS effort a step in the right direction. But he also worries that cancer care does not neatly fall into the six-month episodes. Putting a hard stop on how long treatment should last can create strange incentives. “They give us these arbitrary periods and everyone tries to figure out how to manage within that.”
Polite also said folding the cost of chemotherapy drugs into a shared savings plan can lead to bad incentives because patients with mutations or difficult to treat cancers may require expensive drugs. “It can look like you're spending more, despite the fact that you're absolutely doing the right thing for the patient.”
Despite the challenges, Ronald Barkley, president of the Cancer Center Business Development Group, a consulting firm representing oncology providers, says the CMS experiment should not be overlooked.
“This is going to be the way that oncology care is going to be paid for in the not-too-distant future,” he said. “To ignore this is missing the opportunity to lead, learn and influence the move from volume-based to value-based care.”
The substantial economic burden of cancer in the U.S. is expected to grow. If recent trends in incidence, survival, and costs continue, the cost of cancer care would increase to $172.8 billion dollars in 2020, a 39% increase from 2010, according to a 2011 study from the National Cancer Institute.
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