Azar says new mandatory oncology pay model is coming

(Story updated at 3:57 p.m. ET)

The CMS plans to unveil a mandatory Medicare payment model for cancer patients, and two new voluntary models for cardiac care in the coming weeks, said HHS Secretary Alex Azar. That means the Trump administration is reversing course from its prior stance that payment models, which put providers at risk of losing money if they don't lower costs of care, should be voluntary.

"Real experimentation with episodic bundles requires a willingness to try mandatory models," Azar said at the Patient-Centered Primary Care Collaborative Conference on Thursday. "We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback."

The new mandatory model will focus on radiation oncology, Azar said, but offered no further details.

Oncologists immediately struck back against the idea which could great impact one of the most expensive service lines in the healthcare industry.

"Requiring physician participation in a broadly applied pilot Medicare reimbursement model would subject both the most vulnerable Medicare beneficiaries, as well as the already fragile cancer care delivery system, to untested methods for lowering healthcare costs and uncertain treatment outcomes," said Dr. Clifford Hudis, CEO of the American Society of Clinical Oncology.

Oncologists want the CMS to stick make participation voluntary, at least in the early years of the model.

The radiation oncology payment model will represent a significant departure from the status quo and care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices that may have very high fixed costs of running radiation oncology clinic, according to Laura Thevenot, CEO of the American Society for Radiation Oncology.

HHS first revealed the need for a radiation oncology model in a report to Congress last year. In that document, it said that Medicare Part B payments for radiation treatment increased 216% between 2000 to 2010 because it's so expensive and because of the expected increase in use.

Demand for radiation therapy may increase 38% for seniors ages 65 and older from 282,000 in 2010 to 388,000 in 2020, according to the report.

Azar's remarks follow the unveiling of the administration's first mandatory model last week. That arrangement seeks to lower spending on drugs administered in doctors' offices and hospitals.

The two cardiac models currently in the works build upon those canceled by the Trump administration last year.

The CMS previously has acknowledged that some hospitals wanted the models to continue on a voluntary basis, as they had already invested resources to launch them. On average, hospitals have five full-time employees, including clinical staff, tracking and reporting quality measures under value-based models, according to the AHA. They are also spending approximately $709,000 annually on the administrative aspects of quality reporting.

Earlier this year, the CMS reported that a mandatory payment model targeting joint replacement surgeries dropped spending on average by 3.9% or $1,127 compared with hospitals not participating in the model. At the same time, researchers observed no statistically significant changes in the quality of care as measured by readmission rates, emergency department visits, and deaths.

HHS' changing stance on payment models comes as doctors say they oppose federal and private models that force them to take on more downside risk. According to a recent study issued by RAND Corp. and the American Medical Association, they worry about spending they can't control, like drug costs.

Industry opposition brought down one mandatory payment model introduced by the Obama administration to lower part B drug prices.

But clinicians won't get a formal chance to weigh in on the future of this proposed oncology model until an actual proposed rulemaking is released. Azar did not offer a timeline as to when that might be.