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OCM Performance Period One Initial Reconciliation

Darcie Hurteau has worked in the healthcare industry for more than 15 years. For the last 10 years, Darcie has helped hospitals and other healthcare providers understand changes in Medicare's reimbursement systems. As Director, she leads the DataGen team that provides decision support and education to hospitals and health systems across the country as they prepare for health reform payment strategies. Darcie started her career in healthcare finance at Albany Medical Center in Albany, New York.

This article has been co-authored by Alyssa Dahl, manager, healthcare data analytics, DataGen.

CMS has released the first round of reconciliation data from the Oncology Care Model (OCM) bundled payment program. As we at DataGen parsed through the information, we found that some of the practices that did well were surprised to learn they they’d achieved savings, and that some participants were pleased to find out that their level of performance met expectations.

It’s possible to chalk this lack of clarity up to the ongoing growing pains of a complicated payment program that’s still establishing administrative processes. CMS had to rerelease claims data twice, after they realized they weren’t sharing the exact set of claims they used for calculating the reconciliation. CMS wasn’t aware of these errors until DataGen (and probably other organizations) alerted them to the fact that claim lines were missing, and demonstrated specific instances where we couldn’t recreate the expenditures CMS reported for episodes. Since this was the first reconciliation, CMS may not have realized the data that would be required for participants to understand the reconciliation and trust the results.

As we checked the reconciliation calculations, we found some instances where CMS had failed to provide all of the methodological information required to replicate results. These were related to additional tie-breaking criteria in cancer type attribution and rules about claim inclusion and exclusion for identifying characteristics used to set target prices. Typically, CMS’ other bundled payment programs provide explicit specifications about how episodes are constructed—the type of detail that has been difficult to resolve for this program.

Despite this lack of clarity, there are several interesting pieces of information that emerged from this initial reconciliation. For instance, this is the first time that participants saw the application of the novel therapy adjustment, which helped to increase target prices for eligible practices with greater adoption of newly FDA-approved oncology drugs. There is some confusion and need for assessment here, as some practices received a smaller adjustment than expected, while other practices didn’t receive an adjustment at all.

Additionally, we’ve observed some distinct performance patterns among practices. Breast cancer episodes proved very difficult for practices to produce savings on, whereas many practices had the opposite experience with intestinal cancer episodes. Discussions with oncologists familiar with practice patterns for intestinal cancer suggest that the most common treatment regimens use drugs that have similar costs, which helps the model produce more predictable target prices for intestinal cancer episodes. There is significant variation in spending patterns in breast cancer, and the target price model may require further breast cancer–specific risk adjustment to handle predictors of episode spend outside of the provider’s control. For example, when an oncologist places a patient on a clinically indicated high-cost drug regimen with no comparable cost-efficient alternative, the model lacks the sensitivity to reflect its impact on episode cost within the target price. 

The fact that some practices were surprised by their results is motivating them to dig deep into the results of the first reconciliation and prepare for future reconciliations. During performance period 1, most participants were not focused on improving their financial performance—a majority of their efforts were focused on data collection and implementation of care transformation requirements. Additionally, lack of clarity around patient attribution during the said performance period made it challenging to monitor their aggregate performance in advance of reconciliation. As with any new initiative, monitoring of ongoing performance periods has become more manageable with experience. Participants anticipate being able to measure the impact of their efforts spent on care transformation soon, reflected in the next reconciliation.

Those practices that didn’t achieve a savings during this performance period will need to start thinking about taking on downside risk. This may be too high a hill to climb for some practices, however, and it will be interesting to see who among that group of participants remains in the program, and who heads out. While the need to make that decision won’t emerge until the fourth reconciliation in mid-2019, forward-thinking participants should start developing their risk mitigation strategies now.

While the first reconciliation was surprising and sometimes frustrating, the outlook for success for OCM participants is still good; practices will need to remember to critically analyze their results in light of care standards and implementation activities for performance period 2 when it’s released. 

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