Oncologists Unhappy About End of a Medicare Payment Demo - MedPage Today

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WASHINGTON -- A Medicare demonstration project that aims to transform cancer treatment is scheduled to end in June, and some oncologists are not happy about it.

The Oncology Care Model (OCM), which began in July 2016, centers around financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients. There are currently 126 physician practices and five payers participating in the model, according to the Centers for Medicare & Medicaid Services (CMS). The OCM uses a two-part payment system: a per-beneficiary Monthly Enhanced Oncology Services (MEOS) payment of $160 for the duration of the care episode, and the potential for a performance-based payment for episodes of chemotherapy care. The MEOS payment is intended to pay for added services such as patient navigation and more timely access to care.

CMS's most recent evaluation of the model found that it reduced total payment for an episode of cancer care -- a figure that doesn't include the MEOS payment -- by an average of $298 compared with conventional fee-for-service payment methods. "While this difference was statistically significant, it was small, representing approximately 1% of baseline episode payments," according to the report, which looked at episodes of care that began sometime between July 1, 2016 and July 1, 2019 and ended by Dec. 31, 2019.

"TEP [total episode payment] for higher-risk episodes, which made up about two-thirds of all episodes, averaged about $48,000" during the reporting period. "For higher-risk episodes, OCM reduced TEP by $487 (P<0.05) relative to comparison episodes. This relative reduction in TEP was statistically significant and notable for four common higher-risk episodes: lung cancer (TEP relative reduction of $1,112), lymphoma ($934), colorectal cancer ($865), and high-risk breast cancer ($885)."

Despite these savings, however, Medicare ended up losing money on the program when the MEOS payments were included. "The combined MEOS and [performance-based] payments ... were greater than the small gross reduction in TEP, resulting in significant net losses to Medicare ranging from $61 million to $101 million" in each time period analyzed, according to the report. "For OCM to result in net savings for Medicare, the model needs to reduce per-episode payments enough to cover the MEOS and [performance-based] payments."

It therefore might not be surprising that CMS is discontinuing the program as of July 1, with no plans for a replacement. But that decision is very disappointing to members of the Community Oncology Alliance (COA), an organization of outpatient oncology practices. Bo Gamble, COA's Director of Strategic Practice Initiatives, said that CMS's Center for Medicare & Medicaid Innovation (CMMI), which developed the model, is delivering a crushing blow by stepping away from the model.

"I'm very concerned," Gamble said in a phone interview. "The fact that they're stepping away, there's going to be a huge void. There's going to be a huge stop in momentum." Although the OCM was not perfect, "they did a lot of things really really well -- transforming care with an emphasis on measurement of quality and value."

On the other hand, "the payment methodology was probably too complicated," Gamble said. "When I ran the business office for a hospital years ago, you knew exactly what the rules were and you played by the rules. Not so with their payment methodology, and that was probably the Number One criticism ... But as models go, you can work on that, and improve things."

COA President Kashyap Patel, MD, an oncologist in Rock Hill, South Carolina, said in a statement that the OCM was "[an] important project with a clear benefit to patients. CMMI should be thinking of ways to use the lessons learned from the OCM going forward, not ending it without a plan for the future."

COA surveyed its members to find out what they thought of the model. The 51 respondents -- all of whom were participating in the model -- were asked to rate the model's impact on various aspects of their practice on a scale of 0 (no impact) to 100 (tremendous impact). The average ratings were 62 for "patient experience," 56 for both "operational efficiencies" and "consistency on [sic] cancer treatments," and 49 for "reduced total cost of care."

Respondents also were asked whether they would continue participating in the OCM if the MEOS payments were reduced or eliminated. In all, 80% of respondents said they would continue if the payments were reduced by half, and 27% said they'd continue even if the payments were eliminated.

In 2019, CMS asked for comments on a new model it was considering, known as Oncology Care First (OCF); it sounded similar to the OCM. "The OCF model would test whether an innovative approach to prospectively paying for management and drug administration services provided by oncology practitioners, together with a total cost of care accountability, reduces program expenditures while preserving or enhancing the quality of care" for cancer patients, the agency said in its informal request. "The multi-payer aspect of this potential model could also ... provide the opportunity to improve the quality of care and decrease costs for non-Medicare fee-for-service oncology patients."

Under that model, providers would receive two different payments: a prospective, monthly population payment for the provider's cancer patients, which would cover evaluation and management services, "enhanced" services as defined by the program, and drug administration; as well as a performance-based payment related to the total cost of care, including chemotherapy administration. However, nothing else has happened with the model since the request for comment was made.

Asked to comment on both models, a CMS spokesperson said in an email that "the CMS Innovation Center [CMMI] remains committed to promoting high-quality cancer care for people with Medicare and looks forward to providing additional information about this work, when available. Given that CMS has not announced a future oncology model at this time, it is likely that there will be some gap between the end of the Oncology Care Model and the start of any potential new oncology model."

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  Joyce Frieden oversees MedPage Today’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy. Follow

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