Thursday, December 19, 2019

How Should We Pay for Cancer Care?

In November, the Center for Medicare and Medicaid Innovation (CMMI) released the initial details of “Oncology Care First,” its proposal for a new Alternative Payment Model (APM) for cancer care that would replace the current Oncology Care Model. Cancer patients and those who care about them should be worried, because if Oncology Care First is actually implemented, it could prevent cancer patients from receiving the treatments they need and cause community oncology practices to close.

Over the past three years, the CMMI Oncology Care Model (OCM) has helped many Medicare beneficiaries with cancer to receive better care by filling in a key gap in the Medicare fee-for-service system — the lack of payment for care management services. The Monthly Enhanced Oncology Services (MEOS) payments provided in OCM represent more than $1,000 per patient in additional revenue for the nearly 200 oncology practices across the country participating in OCM, and the physicians have used that revenue to provide greater support for their patients and to respond more quickly and effectively when patients experience side effects from their treatment so they don’t need to go to an emergency department or be hospitalized.

But there is a second part to the Oncology Care Model — the “Performance-Based Payment” — and it has a very problematic structure:

  • OCM Creates a Financial Incentive to Withhold Needed Treatment.  An oncology practice can receive a bonus through the Performance-Based Payment (PBP) for withholding the delivery of an expensive treatment that a patient needs.  The quality component of OCM does nothing to prevent an oncology practice from stinting on care.
  • OCM Penalizes Practices for Using Evidence-Based Care and Encourages Practices to Avoid Patients Who Need More Expensive Treatments.  The methodology CMS uses to set Target Prices fails to adjust for important clinical differences between patients, changes in evidence about effective treatments, and large increases in the prices of drugs, and CMS reduces all Target Prices by an arbitrary “discount.”  This means that if a practice treats patients based on the most current evidence, spending will likely exceed the Target Prices, which would penalize the oncology practice financially.
  • OCM Rewards Practices for Delays in Completing Treatments.  In OCM, CMS pays for services in six-month “episodes,” which means they will receive significantly higher payments if they stretch out patient treatments to last longer than six months.
  • OCM Encourages Oncology Practices to Avoid Patients Who Have Health Problems Unrelated to Cancer Treatment.  The Performance-Based Payment in OCM is determined based on total spending on all services that an oncology practice’s patient receives for all of their health issues, not just services related to their cancer.  An oncology practice will be less likely to receive a Performance-Based Payment, and more likely to have to pay a penalty, if it has a higher-than-average number of patients with other health problems.

Even though the OCM Performance-Based Payment creates these undesirable incentives, oncologists were able to safely ignore them in the initial years of the demonstration project because none of the oncology practices signed up for the “downside risk” tracks in OCM.

However, that is now changing. Oncology practices are being forced to either (a) join one of the downside risk tracks where they would have to pay penalties to CMS based on this flawed methodology, or (b) exit the OCM program altogether and lose the additional MEOS payments they have been receiving.  Either way, the loss of revenues will likely result in reduced services and poorer outcomes for patients. 

Rather than building on the success of OCM by filling in additional gaps in fee-for-service payments and fixing the problematic Performance-Based Payment methodology, “Oncology Care First” would go in the exact opposite direction. It keeps the same Performance-Based Payment Methodology, forces every practice to pay penalties to CMS if spending on their patients exceeds the unrealistic Target Prices set by CMS, eliminates the MEOS payments and replaces them with unspecified new “Enhanced Services Payments,” and eliminates the payments all practices receive for office visits and chemotherapy administration, replacing them with a complex new “Monthly Population Payment.”

As a result, Oncology Care First has the potential to make cancer care worse by penalizing physicians for using new cancer treatments and paying them bonuses if they withhold the treatments that cancer patients need. The magnitude of the potential penalties is so large that they could force oncology practices out of the program or out of business entirely.

Cancer patients and their physicians shouldn’t be forced to choose between the flawed fee-for service system and an even more flawed alternative payment model like Oncology Care First. Fortunately, there’s a better way. Instead of Oncology Care First, CMS should implement Patient-Centered Cancer Care Payment with the two key components of a good APM: .

  1. New payments specifically designed to support the kinds of high-value services cancer patients need; and
  2. Accountability for reducing avoidable spending, so that savings can be generated without harming patients.

The details of how to create Patient-Centered Cancer Care Payment are explained in A Better Way to Pay for Cancer Care: The Problems with CMS Oncology Payment Models and How to Create Patient-Centered Cancer Care Payment. This report also describes the problems with current fee-for-service payments that need to be fixed and provides more detail on the serious problems with the Oncology Care Model, Oncology Care First, and the CMS Radiation Oncology (RO) Model.

Although changes are clearly needed in current payment systems to achieve higher-value healthcare, the cure shouldn’t be worse than the disease. Forcing physicians to take financial risk for the total cost of care for cancer patients will harm the patients and accelerate the loss of high-quality physician practices. It’s time to embrace a different approach to value-based payment for cancer care– a patient-centered approach instead of an payer-centered approach focused solely on reducing spending. 


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