Alternate Payment Models Needed to Transform Cancer Care

Roxanne Nelson

December 22, 2014

The rising cost of cancer care has highlighted the need for changes to the current payment models. A number of new models are on the drawing board, both in the private and public sectors, and some are already being rolled out.

But large-scale changes are needed. In a recent webinar sponsored by the Journal of Oncology Practice, several experts discussed the various ways that providers, payers, and patients can work together to establish a more medically and financially effective cancer care model that will also reduce costs and inefficiencies in the system.

"There isn't one simple answer on how to reduce costs," said Kavita Patel, MD, managing director of clinical transformation at the Engelberg Center for Healthcare Reform, Brookings Institution, in Washington, DC. "It's not about the cost of drugs, or just reducing ER visits or hospitalizations. It's like most things in medicine — a complex interaction."

Specialty drugs in general have become very expensive, but the cost of cancer therapeutics in particular is rising rapidly, explained Dr Patel, who is a practicing primary care physician. "Spending in the next 2 years is slated to increase by about 24% annually, which is higher than the benchmark for other specialty medications. And we know that increased medication cost translates to increased beneficiary out-of-pocket costs, particularly for specialty drugs."

With an ideal payment and financing mechanism, physicians would be able to better identify how to improve care. "This has been addressed by the Institute of Medicine, physician feedback, professional organizations, and others," she said. "That, combined with the disturbing trends that we are seeing in the way certain services in cancer care are being included and excluded from insurance networks, makes us really want to highlight how we can provide high-value care."

"But in our current fee-for-service system, that is challenging to do," Dr Patel said.

There are several alternate payment models in the pipeline. These include clinical pathways, oncology medical homes, bundled payments, and accountable care organizations (ACOs).

None of these models are perfect; in fact, all have "gaps and holes that require a little bit of creative thinking," Dr Patel explained. "They need meaningful performance measures that minimize burden and maximize the relevance to the practice; they can't just be measurements for measurement sake."

But the main drawback is that most of them are still basically fee-for-service models, she noted, and it is essential to develop models that move away from that.

Bundled payments, defined as payment for a cluster of services over a specific period or an episode of care, are of interest.

ACOs, which are healthcare organizations characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients, are another approach.

"But a 'more evolved' ACO is one that can move us totally away from fee for service," Dr Patel said. Such a model would "take on more complete risk, and providers in cancer care would take on responsibility for total cost and do all the coordinated services and any of the things that lead to lower cost and higher quality."

For any alternate strategy, the drawback is in the way savings will actually be measured, she noted. "We need to know how benchmarks will be measured and how providers should be paid. There is great interest in it, but not a great deal of evidence."

ASCO Consolidated Payments for Oncology Care

The American Society of Clinical Oncology (ASCO) has developed an initiative known as the Consolidated Payments for Oncology Care, which restructures the way oncologists are reimbursed.

During the webinar, Jeff Ward, MD, an oncologist at the Swedish Medical Center in Seattle, discussed highlights of the initiative and ways it can improve both patient care and oncology practice.

"We want to change the structure so that it is no longer focused on the physician, but is patient-centered and, therefore, better able to match the services that we provide," said Dr Ward, who is also past chair of the ASCO payment reform workgroup.

The model would simplify billing, provide a more predictable revenue stream for the oncologist, and incentivize high-value and high-quality care. "It would also support a coordinated patient-centered care approach that would get rid of the reimbursement system that is based on doctor visits," he said.

In the proposed system, practices would receive five types of flexible bundled payments that are designed to cover time and costs that are currently uncompensated plus many of the services that are currently reimbursed. The bundles are designated for new patients, treatment months, active-monitoring months, transition of treatment, and clinical trials, explained Dr Ward

In addition to the five bundled payments, the practice would continue to receive separate payments for the tests and major procedures it performs and reimbursement for the drugs it purchases for administration in the office.

As an example, Dr Ward described the case of a patient with stage III colon cancer. The new-patient payment would cover services at the time of diagnosis, and treatment-month payments would reimburse for the chemotherapy that the patient subsequently received. When the treatment is finished, active-monitoring and transition-of-treatment payments would take effect.

"The expected outcome of this would be that it would unshackle members of your team to practice at the highest levels of their licensure, and it would allow practices to be accountable for the quality of care given and for the costs they are able to control," he explained.

The billing system would also be greatly simplified, he added; it would replace the 58 separate Current Procedural Terminology (CPT) codes for evaluation/management and infusion services in use now with 11 service codes; there would be no payment at all for services such as phone calls and social services.

A value-based algorithm for new drugs would establish "what they are really worth and how they should be paid for," Dr Ward noted.

"In any health reform model, physicians not only have to be at the table, they have to be driving the bus," he concluded. "Otherwise, we will end up with a model we're not happy with, and patients will end up with a model that won't work."

Medicare's Reform Plan

In August, the Center for Medicare and Medicaid Innovation (CMMI) released its preliminary design for the Oncology Care Model. It is expected that the model will be formalized in a major CMMI initiative for alternate payment for chemotherapy services provided to Medicare fee-for-service beneficiaries.

These are some of the ideas being developed, but they are still "preliminary and subject to change," cautioned Ron Kline, MD, who is director of the Pediatrics Comprehensive Care Centers of Nevada, and a former Robert Wood Johnson Foundation Policy Fellow.

The CMMI initiative will likely be a "call to action" in the transformation from fee for service to alternate payment methodologies in oncology, he noted. The goal will be to use financial incentives appropriately to bring about improved health outcomes, better quality of care, and lower costs — the so-called "triple aim."

The financial incentives are associated with the total medical cost to treat Medicare fee-for-service beneficiaries who are undergoing chemotherapy treatment over a 6-month episode, and will emphasize practice transformation. In other words, practices will have to change in order to participate in this model, Dr Ward explained. "We also want to be a multipayer model in the hope that other payers and insurers will participate; then we can transform cancer care."

Practice transformation would be needed to improve care. "We want nationally recognized guidelines, access to appropriate clinicians 24/7, improved care coordination and, especially, reduced use of emergency departments and hospitalizations," he noted.

In addition, the initiative will require the use of electronic health records, provide core functions of patient navigation, and require care plans that contain the 13 components outlined by the Institute of Medicine.

"Working with other payers will help us leverage the practice transformation that we hope to achieve," said Dr Ward.

Although the CMMI initiative has not been finalized, the anticipated payment structure covers a 6-month treatment episode after the initiation of chemotherapy.

Clinical Pathways in Motion

A discussion of the Cancer Care Quality Program, rolled out in the summer by Wellpoint, which has recently changed its name to Anthem, wrapped up the webinar. WellPoint/Anthem is one of the largest health benefits companies in the United States.

"Our program rewards high-quality cancer care and provides a platform not only for pathways; we're starting to measure and provide feedback to practitioners on a number of quality measures," said Jennifer Malin, MD, who is medical director of oncology at Anthem. "Over time, we will start to include payment for performance on those as well."

As part of the program, cancer treatment pathways for a number of cancer types that have been shown to be effective, less toxic, and cost-effective have been identified. When physicians use these pathways in their practice, they are eligible to receive an enhanced reimbursement.

"We have a web-based platform that supports the quality initiative, but we have also rolled in our existing prior authorization program, so there's just one place you have to go for prior authorization. This will decrease the administrative burden on the practice," Dr Malin said.

The Cancer Care Quality Program was developed in collaboration with the company's subsidiary, AIM Specialty Health. The current pathways program covers breast, lung, and colorectal cancers, and pathways for lymphoma, chronic lymphocytic leukemia, myeloma, ovarian cancer, and pancreatic cancer will be added.

"The program just launched in July, so we are still getting early data. I hope to be able to present some of them at the upcoming ASCO meeting," she reported. "We are very excited about it, and we believe that it provides a scalable way to support quality and affordable cancer care, to align reimbursement for providers to desired outcomes, to support community oncologists, and to encourage innovation by encouraging truly innovative therapies and putting them on pathways."


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