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Our Take: Value-based payment models in cancer care

Sep 16, 2019

“Ultimately, cancer care in the United States will be paid for using episode-of-care payments.” That was the conclusion from a May 2017 article in the journal Managed Care, which argued that the bundled payment model piloted by UnitedHealthcare (UHC) several years ago would win out over competing alternatives. 

We’ll get to that UHC program in a moment.

Payers and providers have for years looked for ways to keep costs in line while improving care for patients with cancer. In 2004, Broomall, Pa.-based Consultants in Medical Oncology and Hematology (CMOH) began implementing an oncology patient-centered medical home (OPCMH) model, with care management features such as patient education, quick access to physicians, and triage nurses to help patients manage their symptoms. By 2010, chief physician Dr. John Sprandio was touting results that appeared implausible — up to $1 million in savings per physician per year, according to one account.

According to Dr. Sprandio, the OPCMH resulted in a 65% reduction in emergency department evaluations per chemotherapy patient per year and a 45% reduction in hospital admissions over a five-year period. CMOH became the first oncology/hematology practice to obtain the National Committee on Quality Assurance’s Level 3 recognition as a patient-centered medical home — the highest possible distinction.

But the medical home model, for all of its benefits, is problematic — namely that it’s expensive and it takes time to realize a return on investment — which is why more payers haven’t been quick to take this approach to care design.

In 2012, CMS launched its own medical home experiment with Innovative Oncology Business Solutions, Inc., which represented seven community oncology practices across the U.S. Innovative Oncology Business Solutions was awarded $20 million over a three-year period to implement a medical home model for seven cancer types. CMS estimated savings of $33.5 million from the program — less than a 2:1 return on investment.

Others have sought to reduce costs and minimize practice variation through the application of clinical pathways. CareFirst Blue Cross Blue Shield was the first to quantify the benefits of this approach when it implemented the P4 Pathways initiative back in 2008. CareFirst found that over a two-year period, compared with projected cost increases, Pathways resulted in $10.3 million in savings by participant sites — $7.0 million from drugs and $3.3 million from hospitalizations — or $30.9 million for the entire health plan.

The question is, where are we today? Where are the largest payers on their journey from volume to value?

CMS: The Oncology Care Model
The CMS Innovation Center launched its first specialty-specific, multipayer alternative payment model, the Oncology Care Model (OCM), on July 1, 2016. The five-year program ends on June 30, 2021.

Today, 175 oncology practices and 443 locations are participating in the model, along with 10 private insurers across the country. The OCM includes more than 7,000 practitioners and covers more than 200,000 beneficiaries per year for 250,000 episodes of care.

Participating practices agree to provide enhanced services to Medicare beneficiaries, including care coordination, 24/7 access to clinicians, navigation, documentation of a care plan for each patient, and adherence to national clinical guidelines such as those established by the National Comprehensive Cancer Network (NCCN). In exchange, CMS provides care management payments of $160 per beneficiary per month during a six-month episode of care that starts on the date of an initial Part B or Part D chemotherapy claim; if additional chemotherapy is needed, a new six-month episode begins.

There are two tracks — one-sided and two-sided risk — in which practices are eligible for shared savings. Limited data have been made available as to whether the program can be called a financial success. But in our interviews with dozens of cancer center executives over the last couple of years, we can report two things.

For one, the $160 per beneficiary per month in additional fees is inadequate to cover increased staffing costs. The number we hear is more realistically between $210 and $225 per month.

More important, the OCM has an expiration date. What will providers do after they have fully integrated the model into their practices after five years? Most of the providers we’ve talked to say the burden will be unsustainable without subsidies from CMS.

UnitedHealthcare
UHC firsexperimented with an episode-based payment model a decade ago. During the 2009-2012 period, five physician groups treated 810 patients with breast, colon, or lung cancer using episode payments for hospital care, hospice management, and case management; all other care was reimbursed under a traditional fee-for-service structure. Chemotherapy medications were reimbursed at ASP + 0%, regardless of generic status.

UHC also tracked more than 60 measures of cost, quality, and use.

Led by Dr. Lee Newcomer, UnitedHealth Group’s former cancer director, researchers published their findings in an article appearing in the September 2014 issue of the Journal of Oncology Practice. As compared with a control group, total medical costs were 34% lower in the episode-based payment group.

Of note, chemotherapy drug costs increased 178%, even though the program had multiple incentives for lowering drug costs. This baffled the study authors, who could not offer a satisfactory explanation for the increased drug spend.

The UHC experiment, then, put into question the notion that escalating drug costs were responsible for increased spending on cancer care. Subsequently, payers and providers have focused more on reducing emergency department and hospitalization use.

United has since expanded the program to about a dozen practices, which include the following, based on our research:
• Cancer Specialists of North Florida
• Center for Blood and Cancer Disorders
• Florida Cancer Specialists
• Northwest Georgia Oncology Centers
• OHC, Specialists in Cancer and Blood Disorders in Cincinnati
• Rocky Mountain Cancer Centers
• Texas Oncology
• Tulsa Cancer Institute
• UT MD Anderson Cancer Center

Humana
In April 2019, Humana announced its Oncology Model of Care program with 16 initial participants, including several members of The US Oncology Network, Michigan Healthcare Professionals, and Cancer Specialists of North Florida.

Humana will offer financial incentives for providers to improve care for their patients based on measures that take into account access to care, clinical status assessment, and patient education. Practices will be evaluated on these quality and cost measures across several aspects of care, including inpatient admissions, emergency department visits, medical and pharmacy drugs, laboratory and pathology services, and radiology.

Specific financial terms were not disclosed. More details and a complete provider list can be found here.

Cigna
Cigna has built on its ACO-like Collaborative Accountable Care model, subsequently launching similar initiatives in cardiology, gastroenterology, obstetrics-gynecology, oncology, and orthopedics. Cigna notes that these five specialties account for 57% of medical spending.

The care coordination component of Cigna Collaborative Care for oncology consists of six parts:
1. Collaborative patient and caregiver education
2. Evaluation of the symptoms and quality of life at each encounter
3. Proactive care coordination
4. Hospice and palliative care coordination
5. Access and referral coordination
6. Transition of care back to the primary care physician

Practices participating in the Collaborative Care Model in oncology include Cedars-Sinai (Los Angeles), Florida Cancer Specialists, Northwest Georgia Oncology Centers, NYU Langone Medical Center, Oncology Consultants (Houston), Regional Cancer Care Associates, and Virginia Cancer Institute.

CVS/Aetna
CVS/Aetna’s Oncology Solutions has an initiative based on the medical home model with a twist: It changes the method of reimbursement for cancer drugs and offers a performance-based bonus to practices that successfully manage costs. The new payment method increases the percentage markup applied to generic chemotherapies administered by the physician, presumably as an incentive to use less-expensive therapies.

Aetna requires that practices select from a list of commercially available pathways; practices cannot merely use NCCN guidelines (which don’t consider drug costs) or their own internally developed pathways.

According to a 2018 report by The Advisory Board Co., 21 practices are partnered with CVS/Aetna, including Moffitt Cancer Center, Regional Cancer Care Associates, the University of Michigan, and Starling Physicians.

Anthem
Anthem’s Cancer Quality Program uses pathways to encourage physician adherence to evidence-based practices and cost-effective care. The Cancer Quality Program uses pathways developed by AIM Specialty Health; physicians can receive enhanced reimbursement if they adhere to the AIM Cancer Treatment Pathways.

Anthem supplements existing funding streams for participating practices with a new monthly payment of $350 for each Anthem member who undergoes active chemotherapy and is treated according to the requirements of the new initiative.

Blue Cross Blue Shield of North Carolina started a similar program in 2017, which also reimburses physicians at a higher rate if they adhere to the AIM Cancer Treatment Pathways.

What else you need to know
The Sackler family, owners of Purdue Pharma and maker of OxyContin, tentatively agreed to pay $3 billion over a seven-year period to settle opioid-related lawsuits filed by authorities in 23 states and almost 2,300 cities, counties, and tribes, The New York Times reported last Wednesday, and in a later report NBC upped the number of states and territories that had agreed to the settlement to 27. According to NBC, attorneys general in 20 states and Washington, D.C., rejected the offer. Although details haven’t been finalized, under the agreement Purdue would be dissolved as part of a Chapter 11 bankruptcy. A new company would be created that would continue to sell Oxycontin and other drugs, and profits from those sales would be used to pay the plaintiffs.

The Purdue case took a turn late Friday when the New York attorney general’s office said it has found more than $1 billion in wire transfers by the Sackler family — in some cases to Swiss bank accounts — in an apparent move to shield money from future settlements. The New York Times reported that Leticia James, New York’s AG, has issued subpoenas to more 33 financial institutions with ties to the Sacklers.

Insurers will owe a record $1.3 billion in medical loss ratio rebates this year, based on a Kaiser Family Foundation analysis. Part of the Affordable Care Act, the medical loss rebate requirement is intended to ensure that a substantial percentage of premiums — at least 80% to 85%, depending on the plan — is used for medical costs, thereby limiting the percentage of premium dollars that insurers can spend on administrative expenses and marketing, or keep as profit. Insurers have the option to pay the rebates to members and employers by check or through premium credits, and will need to do so by the end of this month. 

Meanwhile, a report by the U.S. Census Bureau revealed that 8.5% of Americans, or 27.5 million people, were without health insurance in 2018, up from 7.9%, or 25.6 million, a year earlier. The percentage of people with Medicaid coverage dropped by 0.7 percentage point, and the percentage of uninsured children younger than 19 increased by 0.6 percentage point.

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