(Story updated at 4:46 p.m. ET)
Seventeen private health insurance companies and more than 3,200 oncologists working in almost 200 medical groups will participate in the federal government's new cancer care project, but critics argue the program may not easily lower costs or reduce unnecessary and potentially harmful care.
The Oncology Care Model, developed by the CMS Innovation Center under authority granted in President Barack Obama's health reform law, will cover 155,000 traditional Medicare beneficiaries, officials said Wednesday. The CMS pitched the model last year with the goal of lowering Medicare expenses and improving patient outcomes through bundled payments. It starts Friday and runs for five years.
“This is really a novel approach,” said Dr. William Conway, CEO of the Henry Ford Medical Group in Detroit, one of the program's participants. “There's a lot of fuss around the primary care model medical home. The people most in need in of better care coordination are people with cancer. This is a great opportunity to do a better job coordinating the care of patients with very complex needs.”
The timing of the program's rollout coincides with Vice President Joe Biden's national push to cure cancer, as well as the Innovation Center's controversial attempt to change how Medicare Part B pays for outpatient drugs, like those used for cancer patients.
Oncology groups and private payers have already experimented with different types of cancer payment models as part of the national push to move away from paying for the volume of services. But Medicare's Oncology Care Model, like other federal demonstrations, won't move completely away from the traditional fee-for-service payment structure. And health policy officials are unclear whether the episodes of cancer care are actually necessary from the outset, nor do they address the common issue of misdiagnosing cancer.
“There's largely an assumption that if you pay for an episode, you have determined the episode is needed,” said Dr. Robert Berenson, a fellow at the Urban Institute and a former CMS director. “I don't see anything that addresses that here.”
Berenson added the pilot project could mean the continued use of superfluous treatments and chemotherapy, but “people can get a more efficient, unnecessary episode of care.”
Questions also remain around how the model's quality measures will influence bonus payments and physician behavior. Several studies have shown that value-based payment systems and pay-for-performance schemes sometimes fail to reach their intended goals because of overly complex designs and conflicting goals for physicians.
Physicians enrolled in the Oncology Payment Model will be graded over six-month episodes on how they care for cancer patients who undergo chemotherapy. The episode is triggered once a patient starts chemo or doctors bill for chemo drugs, and Medicare and the private insurers will pay physicians through an elaborate performance-based methodology. Medicare Advantage members are not included.
Participants will receive a $160 lump sum every month to provide care-management services, such as being available around the clock and coordinating appointments. In addition, performance-based payments are based on quality scores and whether providers saved money over the six-month episode of care, compared with historical fee-for-service payments.
For the first two years of the program, physicians will be enrolled in so-called one-sided risk arrangements. That means physicians will not pay penalties for spending too much or not meeting all quality metrics. Starting in 2018, medical groups will jump into two-sided contracts, which offer higher rewards for sharing savings. However, if expenses go beyond the baseline, medical groups have to pay money back to the government.
A major incentive for Oncology Care Model participants is the fact that the two-sided payment model counts as an “advanced alternative payment model” under Medicare's new physician payment law known as MACRA. Advanced APMs qualify for a 5% bonus payment from Medicare in 2019 and beyond.
“That could be substantial to an oncology practice,” Jessica Turgon, principal at ECG Management Consultants, said of MACRA's bonus payments.
But Berenson contends that making oncology groups with two-sided risk eligible for bonuses may be misguided because the program does not evaluate whether the cancer care was appropriate.
“To give the 5% bonus just on theory isn't right,” he said.
Oncology groups undoubtedly will encounter some bumps in the early stages, Turgon said. The care-management fee helps with investing in case managers and care coordinators, who take charge of patient care before, during and after chemotherapy. But the program's design also puts more responsibility on the shoulders of specialists instead of primary-care doctors.
“It places more of a focus on the medical oncologist to be the coordinator of care,” said Turgon. “Do the practices have the infrastructure to do that while taking care of patients?”
Some of the 17 insurers participating in the model are provider-owned insurers that also have their own medical groups participating. They include Banner Health and its University of Arizona Health Plans subsidiary, Henry Ford Health System, Highmark Health and Summa Health.
Other insurers, including Aetna and several Blue Cross and Blue Shield affiliates, want to gain more experience in bundling cancer care.
“We really believe this is the future for how our networks are going to be put together,” said Carl Lund, vice president for value-based contracting at New York-based EmblemHealth, one of the 17 insurers participating in the Oncology Care Model. EmblemHealth plans on mirroring what the CMS does in the fee-for-service program for its own Medicare Advantage population. If the payment model works, the insurer could expand the program to commercial patients, although for now the company is “starting in a very focused way,” Lund said.