ASCO Unveils New Model for Oncology Payments

Roxanne Nelson

May 22, 2015

The American Society of Clinical Oncology (ASCO) has released a proposal that they believe will significantly improve the quality and affordability of care for cancer patients.

Expanding on a payment model that was circulated last year, ASCO has now released details of its proposed Patient-Centered Oncology Payment: Payment Reform to Support Higher Quality, More Affordable Cancer Care (PCOP), which is designed to enable all oncology practices to deliver higher quality care at lower cost.

Under PCOP, oncology practices would receive a significant increase in payments for patient services as compared with what they are receiving now, but overall spending on cancer care would be reduced because the plan would help avoid unnecessary care, the organization explains.

"With today's healthcare system in profound transition, it is critically important that payment systems provide medical practices with the flexibility needed to be compensated fairly and adequately, preventing disruption to the care we provide patients and allowing physicians to tailor services to the unique needs of individual patients, without increasing financial burdens on patients," said ASCO's Clinical Practice Committee Chair Robin Zon, MD, FACP, FASCO, in a statement.

"ASCO's Patient-Centered Oncology Payment proposal not only provides that flexibility, but it will introduce much-needed stability into cancer care to ensure that patients receive the full range of services they need to fight their disease," he noted.

Two Key Changes

The PCOP proposal would improve payment for oncology practices in two key ways: it would allow for higher and more flexible payment to support patient care, and oncology practices would be accountable for delivering high-quality, appropriate care.

According to the proposal, oncology practices would receive additional payments that are sufficient to enable the delivery of high-quality services needed by cancer patients. The payments would be made in a way that would give practices more flexibility than they have today, which would enable them to tailor services to the unique needs of individual patients.

Under the basic PCOP system, oncology practices would be able to bill payers for four new service codes, which support diagnosis, treatment planning, and care management:

  • New Patient Treatment Planning: $750 payment for each new patient

  • Care Management During Treatment: $200 payment each month for each patient

  • Care Management During Active Monitoring: $50 payment each month for each patient during treatment holidays and for up to 6 months following the end of treatment

  • Participation in Clinical Trials: A payment of $100 per month for each patient while treatment is under way and for 6 months afterward

The new service codes are supplemental, and oncology practices would continue to be paid for services such as evaluation/management, chemotherapy infusion, advanced care planning, testing, and imaging.

Accountability plays a prominent role in the PCOP. As part of receiving the supplemental payments, oncology practices would be accountable for providing high-quality, evidence-based care in four ways:

  • By avoiding emergency department visits and hospital admissions for complications of cancer treatment

  • By following evidence-based guidelines for the appropriate use of drugs, laboratory testing, and imaging studies, and using lower-cost drugs, tests, and imaging that evidence shows are equivalent to higher-cost treatments and tests

  • By following evidence-based guidelines for high-quality care near the end of a patient's life

  • By providing care consistent with standards of quality defined by ASCO

Everyone Benefits

ASCO believes that the PCOP will benefit patients, oncologists, and payers in a number of ways. Patients would benefit from being cared for by a practice that has sufficient resources to ensure accurate diagnoses, identify the most appropriate treatment, and provide patients and families with adequate education and support services. It would also be financially beneficial to patients, because they would be less likely to need expensive visits to the emergency department or hospital admissions and they would not have to pay for unnecessary drugs and tests.

Oncology practices will benefit financially because the new payments represent a nearly 50% increase in revenue compared with the current payments typically received for office visits and infusions. These payments will help cover the costs of current services that are not currently billable, such as non-face-to-face visits with clinicians and services delivered by nonphysician staff.

Finally, payers will also benefit, because they would experience significant savings through the avoidance of emergency department visits and hospitalizations. The appropriate use of expensive drugs, laboratory tests, and imaging studies and the providing of high-quality end-of-life treatment are also more likely to occur under this program. It is estimated that these savings will more than offset any additional payments made to oncology practices; conservative estimates indicate that even with the higher payments, payers would likely see a net reduction of at least 4% in total spending if all practices participated in PCOP payment.

Additional Options

Although the basic PCOP system would provide supplemental non-visit-based payments, oncology practices and payers could also choose to implement one of two more advanced versions of PCOP. Option A (Consolidated Payments for Oncology Practice Services) would replace the existing evaluation and management and infusion payments with three new consolidated sets of billing codes that would give practices even more flexibility to determine exactly how to deliver effective services to patients.

Option B (Virtual Budgets for Oncology Care) would provide greater flexibility and accountability by creating virtual monthly budgets that cover additional categories of services, such as hospital admissions, laboratory tests, imaging studies, and/or drugs.

ASCO has estimated that under PCOP, oncology practices would receive a significant increase in payments for patient services compared with the current status quo, yet overall spending on cancer care would decrease because patients would avoid expensive hospitalizations and unnecessary tests and treatments.

ASCO is soliciting comments on its payment reform model through July 20, 2015.

For the complete text version of the ASCO payment reform model, please visit www.asco.org/paymentreform.

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