The Future of Cancer Care Reimbursement

When the Center for Medicare and Medicaid Innovation (CMMI) unveiled its Oncology Care Model (OCM) just over a year ago, the reaction from most oncologists was what one would expect from physicians faced with a new government program that challenges them to change the way they practice—more hoops to jump through for less money.

However, I’ve witnessed an evolution in thinking from those same oncologists who are now competing to get into the program as they see participation as a collaboration with the nation’s largest payer. They’ve learned more about the program and have come to realize that the transition from fee-for-service to value-based reimbursement isn’t a passing fad. It’s here to stay.

Benefits of Early Participation in the Oncology Care Model

By participating in the OCM, oncology practices will get in on the ground floor of value-based reimbursement. Practices will be expected to acquire the competencies and establish the practice infrastructure required to succeed in a new health care environment that rewards them for the value that they deliver to cancer patients. Value in this case is defined as the best possible clinical outcomes at a reduced cost. The repercussions of the OCM are vast because as we know from experience, what starts with Medicare often is adopted by other payers.

OCM Program Requirements

What are the requirements for participating in Medicare’s OCM and, by extension, in other value-based reimbursement programs? A good place to start for oncologists is reviewing CMS’ six program requirements for participation. In short, they are:

• Provide patient navigation services
• Develop, follow and document a care plan that incorporates the 13 elements of high-quality cancer care as defined by the Institute of Medicine
• Use a certified Electronic Health Record (EHR) system that meets the Stage 2 “meaningful use” requirements  as defined by HHS
• Provide 24/7 patient access to clinicians with real-time access to patients’ medical records
• Treat patients with recognized and evidence-based clinical therapies
• Use data to drive continuous quality improvement

Meeting these requirements will likely warrant additional practice investments. But, remember, Medicare is paying a practice a per beneficiary per month (PBPM) payment on top of the regular fee-for-service payment that the practice would receive for caring for the same patients. So, participation presents a significant revenue opportunity for any practice with a large Medicare patient base.

To understand the revenue opportunity by participating in the OCM, a practice could estimate how many of its Medicare patients would be eligible for the program. Medicare will pay $160 per month for a six month episode of care. Using simple math, it could then estimate how much in total the practice would receive each year from the monthly payments and then have a better idea how much may be available to invest in additional resources.

Identify Eligible Patients, Report Quality Metrics

When it comes to investing in practice transformation, I would put technology at the top of the list. A practice will need its EHR or practice management system to identify patients eligible for the OCM program. The systems must also collect data on the 36 quality metrics required by the program and enable the practice to report the results to Medicare. EHR or practice management systems that aren’t capable of handling these requirements would need to be upgraded.

Staffing to Support Value-Based Care

Next on the list of priorities is staffing. Once eligible patients are identified, someone at the practice will need to enroll them in the OCM program. Additionally, someone will need to bill Medicare the PBPM monthly fee and need to serve as the patient navigator. And someone will also have to ensure that the clinical documentation complies with program reporting requirements.

All of this will be a major change in responsibilities and workflows for a typical community oncology practice. Everyone is involved in practice transformation. It means training and cross-training office staff, educating and training oncologists and, perhaps, hiring additional staff.

Additional revenue may be available to offset these costs from what CMS calls a performance payment (perhaps better known as gain share or shared savings) if a practice demonstrates it can reduce total expenditures below an established target price.

More important than whether the monthly payments or the potential performance bonuses cover the practice’s cost of participation is the fact that a practice will be investing in a new care delivery model—one that will position the practice to be successful under other oncology value-based reimbursement models that are certain to come in the future. The practice will have a new clinical technology platform and core competencies necessary to deliver high quality care to cancer patients—and hopefully be rewarded for doing so.

For more on this topic, read “Prepping Oncology Practices for Value-Based Reimbursement.”