A Hard Look at the Current Payment Reform Options

Many of the payment reform experiments for oncology currently underway are a step in the right direction, but are not the final destination. That is the assessment of panelists speaking in a session on the topic at the American Society of Clinical Oncology Annual Meeting (“Payment Reform in Oncology: The Way Forward”).

The Oncology Care Model (OCM) payment system, which the Center for Medicare & Medicaid Innovation (CMMI) will launch in a limited trial next year, and most of the shared savings programs that private insurers are trying are based on the existing fee-for-service system. Fee-for-service, as its name suggests, incentivizes hospitals and physicians to provide more services to earn more fees.

“Any system based on fee-for-service is in tension with—if not ultimately incompatible with—the type of reforms everybody wants, which are decreasing hospitalizations and emergency room visits,” Blase N. Polite, MD, MPP, Assistant Professor of Medicine at the University of Chicago Center for Clinical Cancer Genetics and Global Health Medicine, said in an interview before the meeting.

He said he thinks practices that can document that they provide good-quality care but have high costs can thrive in the new payment systems for a while because they can lower costs for payers and earn so-called shared savings for doing so. But many oncology practices that are owned by or tightly affiliated with hospitals will eventually see that if they continue to ratchet down hospital use to earn shared savings, hospital revenue losses will exceed the amount of shared savings that can be earned.

Despite his conviction that fee-for-service must go away, Polite says that doing so will present significant challenges. For example, many oncologists are evaluated on and have salaries based on work Relative Value Units, which are associated with the billing codes in the fee-for-service system. So a new way to assess an individual physician’s productivity will have to be determined.

That is why oncologists need to be engaged with payment reform experiments currently underway, identifying their strengths and weaknesses, and discussing solutions for the long term: “If the world changes as it should and as it is going to have to, are we prepared?” he said. “What does the future look like and how do we get from here to there?”

ASCO’s Pay Proposal

ASCO issued its own payment reform proposal, Patient-Centered Oncology Payment (PCOP), the week before the meeting (see box and http://bit.ly/1FdRXlo). The new proposal, which significantly expands on the first iteration released last year, incorporates feedback from a wide range of ASCO members.

“We believe that one of the reasons [the first proposal] did not get the attention it deserves is because it did not directly address drugs,” said the session’s chair, Jeffery C. Ward, MD, an oncologist at Swedish Cancer Institute in Edmonds, Washington. “People are waiting for a payment reform proposal that includes drugs, but we think that is misguided.”

Although the high cost of anticancer drugs is a concern for all stakeholders, a payment model that puts oncology practices at financial risk for the drugs they prescribe is not appropriate. “Rather than myopically focusing on limiting physician prescribing of cancer drugs, the real goal should be: ‘How do we globally provide high-quality care and do it for less money? How do we bring value to the equation?,” he said.

The new ASCO proposal includes three approaches to payment reform, giving a practice flexibility to find the model that corresponds with its capabilities and capacity to take on financial risk. Each of the approaches is expected to save money for the Medicare program and maintain or improve the quality of care.

“We will make the argument that this should be considered a viable alternative to the CMMI model and that there should be testing of several models, as opposed to just one, before we decide the best way to provide high-value care,” Ward said.

ASCO Model vs. CMS Model

Also interviewed before the meeting, Harold D. Miller, President and CEO of the Center for Healthcare Quality and Payment Reform, has been working with ASCO members on the payment reform proposal for two years. His analysis shows that oncology practices, which are typically paid only for face-to-face visits with patients and for infusion services, receive only about 10 percent of the total spending on a patient’s cancer care.

Looking at Medicare and private-payer data, Miller found that, on average, about $45,000 is spent per cancer patient receiving chemotherapy; about 50 percent of that is spent on drugs, 10 percent on hospitalization and emergency department use, 10 percent on physician services, and the rest on testing, images, and other services. This means, he said, that paying oncology practices more would not increase total cancer care spending by very much, and reducing avoidable spending in the other categories could more than offset increased payments to oncology practices.

The current payment system does not adequately pay oncology practices for the time-consuming services needed to determine the most appropriate tests and treatments when a patient first engages with the practice.

“That is when an oncologist incurs a lot of time, which doesn’t all happen face-to-face with the patient, but includes talking to pathologists, doing research on the best treatment alternatives, looking at test results, and so forth. And that is also the time where there is a huge amount of non-physician staff interaction with patients, such as patient education and financial counseling. None of that is paid for under the current system.”

Similarly, oncologists today are generally not paid for care-management services delivered to patients during the treatment phase of their care, even though those services can avoid expensive hospitalizations and emergency department visits.

“Our idea is that if we can better match payments to the actual patient needs and to the services that the oncology practice provides to meet those needs, we can improve care and reduce overall costs.”

Miller, who titled his talk “Better Ways to Pay for Cancer Care: Creating Win-Win-Win Approaches for Oncologists, Cancer Patients, and Payers,” said he believes the government’s OCM proposal shares some basic principles with ASCO’s PCOP, but that it misaligns incentives. For example, even though advance care planning and appropriate use of hospice care will be quality measures in the OCM program, the higher payments in OCM are tied to chemotherapy treatment.

“The Medicare proposal is good in the sense that it does one of the things that everyone agrees needs to be done: give more resources to the practices and flexible payments that they can use to provide better care management,” he said. “But the payments are still linked to chemotherapy treatment. So you have to give the patient a treatment to be able to get the payment, and the payments end when treatment ends, even though the patient still needs support.”

He said he also doesn’t think the OCM’s use of six-month episodes makes sense. For example, the first infusion of chemotherapy triggers a six-month episode, which means six monthly payments of $160 each. If chemotherapy continues after that six-month period, a new episode—with another six months of payments—begins.

“If a patient is getting a six-month regimen but it takes six months plus one day to complete the regimen, CMS says it’s two episodes—and the practice gets another $960,” he said. “Now, to me, that creates a pretty bizarre set of incentives for oncology practices.”

ASCO’s Payment Reform Proposal

The American Society of Clinical Oncology proposed Patient-Center Oncology Payment (PCOP), which includes three approaches to paying for cancer care.

Basic PCOP

Practices paid under this system would continue to be paid as they are today for services, including evaluation and management (E&M) services, infusions of chemotherapy, and purchase of drugs administered or provided to patients in the practice setting. They would also receive four supplemental, non-visit-based payments to support diagnosis, treatment planning and care management. Practices could bill payers for four new service codes:

* New patient treatment planning: $750 per patient;

* Care management during treatment: $200 per month per patient;

* Care management during active monitoring: $50 per month per patient during treatment holidays and for up to six months following the end of treatment; and

* Participation in clinical trials: $100 per month per patient during treatment and for six months afterward.

In return for receiving these payments, an oncology practice would be held accountable for:

* Avoiding emergency department visits and hospital admissions for complications of cancer treatment;

* Appropriate use of drugs, laboratory testing, and imaging studies, and use of lower-cost drugs, tests, and imaging where evidence shows they are equivalent to higher-cost treatments and tests;

* Delivery of high-quality care near the end of a patient’s life; and

* Commitment to care consistent with ASCO quality standards.

Consolidated Payments for Oncology Practice Services

This system would replace the 58 codes oncology practices currently used to bill for services with payment codes that fall into three major categories:

* New patient payment;

* Treatment month payment; and

* Active monitoring month payment

Bundled Payments for Oncology Care

This approach would set a target spending level each month to cover the services delivered by the oncology practice and some or all of the following: hospital admissions, laboratory tests, imaging studies, and/or drugs. Target levels would differ for patients with different types of cancer, stages of cancer, comorbidities and other factors.


By Lola Butcher

Original article:  http://journals.lww.com/oncology-times/Fulltext/2015/06250/A_Hard_Look_at_the_Current_Payment_Reform_Options.22.aspx


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