A new analysis suggests most oncology practices participating in CMS' voluntary bundled-payment model are not prepared to take on downside risk and need more time to prepare before the mandatory start date in July.
New estimates released Tuesday by Avalere Health projected around 70% of the 176 oncology practices participating in the Oncology Care Model would owe the CMS payments to recoup costs if they moved from their current one-sided, upside risk arrangement to a two-sided risk arrangement where they would be responsible for paying the difference if they did not meet a target price for services.
Started in 2016, the Oncology Care Model is a five-year, voluntary bundled-payment model to give providers incentives to improve care quality and create efficiencies that lower costs. Currently Oncology Care Model providers can generate revenue by providing care below the target price set by the CMS and do not incur penalties when they exceed those cost targets. Starting in July, the CMS will require participating practices to switch from the one-sided risk arrangement and enter into a two-sided risk arrangement where they will face financial penalties for not meeting cost targets.
Researchers found providers in the program would do better entering into an alternative to the original two-sided risk arrangement the CMS has recently proposed that would create a "neutral performance zone" where additional payments are neither earned nor owed, offering providers less downside risk.
But providers under the payment model stand to lose even under that less risky alternative, according to the analysis. It found approximately half of Oncology Care Model practices would owe payments under the alternative two-sided risk arrangement.
"There definitely is a policy argument for encouraging downside risk, but there's always been a lot of questions about how fast to make that transition happen," said report co-author Richard Kane, associate principal at Avalere.
While many stakeholders have cited the CMS' bundled-payment models like the oncology model for driving more patient-centered care, a Government Accountability Office report in January found that while many hospitals enter bundled-payment models because of the potential for financial gain, a majority end up leaving once they must incur downside risk.