Oncology Care Model at 4 Years: No Savings, Practices Leaving

Roxanne Nelson, RN, BSN

July 07, 2021

The Oncology Care Model (OCM) was the first cancer-specific alternative payment model (APM) for Medicare recipients as well as Medicare's first APM for outpatient specialty medicine. However, it has not been a success.

After 4 years, the OCM actually led to a $155 million net loss to Medicare, and physician participation in the program also declined. During the past 4 years, the number of practices dropped to 138 (71.9%) from the 192 original practices in 2016.

These results are "disappointing," say the authors of a viewpoint published in JAMA Oncology.

But they also "illustrate the unique challenges of APMs in medical specialties for which care standards become more complex, and costlier, in the precision medicine era," they add.

"To succeed, APMs in oncology will require more granular clinical data and a rethinking of incentive strategies that better reflect oncologist accountability."

Co-author Samyukta Mullangi, MD, MBA, from the Department of Medicine, Memorial Sloan Kettering Cancer Center, New York City, pointed out that currently, oncologists are fully accountable for the total cost of care under the OCM. "In the era of precision medicine, including the cost of anticancer drug spend can be really tricky for oncologists who are simply practicing guideline-concordant care," she said.

As an example, she pointed out that the introduction of checkpoint inhibitors in non-small cell lung cancer has led to a quadrupling of 5-year survival compared with standard chemotherapy alone. "Holding oncologists accountable for the large proportion of drug spending for standard-of-care therapies with rising costs implicitly disincentivizes use of these effective, life-prolonging therapies," Mullangi told Medscape Medical News.

"We cannot wield the same levers of cost control across all of medicine. In oncology, much of the cost of therapy is related to price, not utilization," she said.

Challenges to Performance

In the article, the authors explain that there are three critical reasons for the OCM's suboptimal performance.

First, the OCM has relied primarily on administrative claims data to define episodes of care and gauge cost savings against historical benchmarks. Claims data may be sufficient to account for heterogeneity in patient factors for procedure-based episodes, such as joint arthroplasty or coronary artery bypass grafting. But used alone, they do not provide information on cancer diagnosis, histology, or molecular characteristics, which determine treatment choice and costs in cancer care.

Second, OCM episode spending targets the total cost of care, which includes expenses for anticancer drugs. New therapies, such as checkpoint inhibitors, have been incorporated into the standard of care and are often superior to chemotherapy. Oncologists, therefore, may not be justified in reducing the use of agents. While OCM has attempted to make adjustments to account for the rising costs of novel therapies, these modifications were calculated and applied at the practice rather than disease level.

Third, performance-based risk assumes that the discretionary practice patterns of physicians are responsible for most of the variations in spending. But in reality, oncologists have relatively little control over the use of therapeutic drugs compared with clinicians in other specialties. Previous research has demonstrated that only 10% of regional variation in spending was derived from drug prescribing, while 67% was associated with costs linked to acute hospital care.

"The monthly spending on high-risk, high-intensity cancer episodes decreased by an average of $430 under the OCM, but spending on low-risk episodes actually increased by $130," Mullangi told Medscape Medical News. "This may have been because the additional $160 monthly payments allowed practices to invest in enhanced care coordination services so they could mitigate rates of acute care utilization for complications among patients getting active anticancer treatment."

Cutting Costs?

There is some evidence that the OCM program may be cutting costs. As previously reported by Medscape Medical News, a large community practice that implemented an OCM saved Medicare $3 million over the course of 1 year. However, the practice had already begun implementing changes before the OCM, and these were all "rolled up" into one practice transformation.

Another study found that at community practices that adopted the OCM, the first year of the program was associated with less physician-administered drug use in prostate cancer, lower drug costs in lung and prostate cancer, fewer visits for patients with breast or colon cancer, and lower office-based costs in all cancers analyzed. But when all costs were accounted for, the difference was no longer statistically significant.

Moving Forward

The authors offer two potential actions that could increase the success of the OCM. For starters, future oncology APMs need to use more data than just claims to define clinical episodes, such as investing in obtaining regular feeds of molecular and pathologic data. Smaller practices may be unable to afford investing in data feeds, but partnerships with private companies that specialize in real-time abstraction of clinical data may be an option.

Second, oncologists should not be accountable for care that they cannot control. While there are many low-value decisions made in oncology for which accountability is appropriate, they suggest using high-pathway adherence rather than total costs of care.

No outside funding was disclosed. Mullangi had no disclosures. Several co-authors have reported relationships with various pharmaceutical companies, as listed in the paper.  

JAMA Oncol. Published online July 1, 2021. Abstract

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