New ASCO Plan Would Boost Oncologist Revenue

May 06, 2014

Oncologists would receive monthly capitation payments in addition to fee-for-service under a proposal released May 4 by the American Society of Clinical Oncology (ASCO).

ASCO touts its plan as focusing on the value of medical services instead of their volume, and giving oncologists enough financial stability to "sustain patient access to community care."

The new reimbursement model — called Consolidated Payments for Oncology Care — is billed as a Medicare reform, but ASCO says it can work with private insurers, too.

"The purpose of the model is to reduce overall spending on cancer care but increase revenue for oncologists," said Robin Zon, MD, chair-elect of ASCO's clinical practice committee. Without a boost to Medicare reimbursement, in particular for cancer drugs, more oncologists will be pressured to send patients to expensive outpatient hospital departments for drug administration, social work, and other services they can no longer afford to supply in the office, according to Dr. Zon.

Regardless of reimbursement problems, "oncologists feel ethically that they should take care of patients with cancer," she told Medscape Medical News, "but some of the services may have to shift."

Under the ASCO plan, oncologists eventually would receive 5 types of bundled payments to cover currently unreimbursed time and costs. They would still get reimbursed separately, however, for drug purchases, tests, and major procedures on a fee-for-service basis.

The first of the 5 categories would be a new-patient payment that exceeds what oncologists now receive for an initial office visit because it reflects the uncompensated time spent in drafting treatment plans and educating patients.

In addition, oncologists would receive 4 different types of monthly payments per patient, depending on the stage of care. A capitated amount for the active treatment phase would replace all current reimbursement for evaluation and management (E&M) as well as infusion services. The capitated payment would vary depending on the complexity of both the patient's condition and chemotherapy treatment.

A second kind of monthly payment would cover the "active monitoring" phase, when the patient is no longer receiving chemotherapy but still needs testing and support. Another monthly payment would kick in when a patient's cancer progresses or returns, or when his or her treatment regimen changes significantly. Finally, oncologists could receive a monthly payment for each patient participating in a clinical trial.

"Lack of payment to cover the significant time and costs associated with trials discourages many practices from participating," according to the ASCO proposal.

Among other things, the various capitated payments translate into more predictable monthly revenue for practices and make them less dependent financially on parenterally administered chemotherapy drugs.

From 58 to 11 Oncology Billing Codes

ASCO says its reimbursement plan will cut billing costs for oncology practices by reducing the number of current procedural terminology (CPT) codes they need from 58 as required now to 11. The plan also promises to produce savings for third-party payers such as Medicare. It assumes budget neutrality for the full spectrum of oncology care, including hospitalizations, tests, and diagnostic imaging. In other words, total spending should be no greater than what it is under current payment systems. However, the plan could reduce total spending if oncologists can prevent unnecessary hospitalizations and the like through better care. These savings "could more than offset higher payments to oncology practices," according to ASCO.

There will be financial winners and losers among oncology practices, however. Those that score higher on quality-care measures could receive raises approaching 10%. Practices that deliver subpar care, fail to provide recommended services, or fail to head off preventable complications, could see their pay docked by the same percentage.

ASCO proposes a gradual transition to its new payment model, with limitations on financial risks for oncologists in the early going. The society also wants to give oncologists their choice of models.

"Given the variability of oncology practice size, location, and population, we don’t believe a one-size-fits-all system makes sense in this country," said Jeffery Ward, MD, chair of ASCO's payment reform workgroup, in a news release.

Another Payment Reform Plan Is Already on the Table

The talk of choice hearkens back to a joint statement on payment reform issued in January by ASCO and an advocacy group called Community Oncology Alliance (COA). The statement stressed the importance of offering clinicians multiple reimbursement models.

That multiplicity is already shaping up. COA, for example, has pushed for the concept of the oncology medical home, akin to that in primary care, to rescue its financially pressed constituency. It reported in June 2013 that among 1338 practices and clinics it has tracked over the last 6 years, 288 have closed and nearly 500 have sought refuge in a hospital relationship.

Like ASCO, COA stresses rewarding physician work outside the exam room that currently goes unreimbursed, as well as pay for performance. However, while ASCO proposes monthly capitation, COA prefers 2 other approaches — shared savings and bundled payments for episodes of care, which also are referred to as case rates. With shared savings, practices receive a cut of what they save a third-party payer when they come under a spending target. Bundled payments for episodes of care, which put practices at even more financial risk, would cover a designated course of treatment such as a cycle of chemotherapy irrespective of the time period (the ASCO proposal suggests that such case rates could be a destination for some practices).

COA Executive Director Ted Okon said his group's payment proposal has been in the making for more than 2 years and boasts an actuarial study of practice data that confirms its feasibility. In contrast, the ASCO model hasn't been vetted yet, said Okon. "Judgment has to be reserved."

Although COA brands its reform plan as the oncology medical home, ASCO also lays claim to that terminology. It notes that Medicare and private insurers are making monthly capitation payments to primary care practices to support their ability "to implement patient-centered medical home principles." As in the ASCO plan, this primary care capitation covers phone calls, emails, and nurse advice that usually go unreimbursed.

More information on ASCO's proposal for paying oncologists is available on the society's Web site.

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