Currently Viewing:
Evidence-Based Oncology January/February

Lessons From an Oncology Medical Home Collaborative

John Fox, MD, MHA
The past decade has witnessed a proliferation of oncology cost-control initiatives, primarily through the use of chemotherapy pathways programs.1 Pathways programs form part of a natural progression away from fee-for-service practice to bundled payments and accountable care organizations (ACOs; Figure), where oncologists are increasingly accountable for Triple Aim measures of patient experience, individual and population health outcomes, and costs. Pathways programs are limited because the focus is on controlling costs rather than outcomes and experience. Bundled payment models and ACOs have received significant attention.2,3 Yet despite the allure of ACOs to payers, most private oncology practices do not have the risk-based capital or the experience, at present, to successfully participate. This article describes the oncology medical home (OMH) model, which represents an intermediate space where community oncologists and payers can work collaboratively on Triple Aim goals.

The OMH model of care for patients with cancer is a natural evolution of provider-payer partnerships around the primary care patient-centered medical home (PCMH) model. PCMH is a model of care provided by physician practices aimed at strengthening the physicianpatient relationship by replacing episodic care, based on illnesses and patient complaints, with coordinated care in a long-term healing relationship ( There are a number of attributes of the medical home, including access to care, patient engagement, care coordination, team-based care, decision support, and physician feedback, which are equally relevant and germane to oncology practices.

In collaboration with communitybased oncology practices, Priority Health, a regional Michigan-based insurance carrier, developed and implemented a 2-year oncology medical home program in February 2011. The core purpose of this program was to drive oncology patient care delivery redesign through the adoption of the oncology medical home and in doing so achieve Triple Aim objectives. Community oncologists were chosen as a partner because prevailing evidence shows these are the most cost-effective settings in which to provide cancer care.4,5

The program, which now includes more than 60 physicians in 6 practices, embodies the 3 core elements of payment reform, care redesign, and measurement:

1. The practice agrees to develop and measure adoption of key elements of an oncology medical home model: a) adherence to preferred regimens for high-volume conditions, b) care enhancement including patient education and engagement and triage initiatives, c) advance care planning (ACP), and d) survivorship planning.

2. Priority Health agrees to pay a) a monthly care management fee for patients receiving active oral and/or infused chemotherapy, b) drug acquisition costs, c) an annual infrastructure payment, d) enhanced fees for ACP, treatment planning, genetic counseling, and other agreed-upon services, and e) a shared savings for reductions in emergency department (ED) encounters and hospitalizations.

3. The practice and Priority Health agree to adopt performance metrics to assess patient experience, health outcomes, and per capita utilization.

Since a core tenet of the program was to drive sustainability of community- based oncology practices, eligibility required practices to infuse chemotherapy in a private office setting, to be open to all products offered in the geographic area, and to have provided evaluation and management services to at least 10 Priority Health members in the preceding 12 months.

Payment Reform

The first key element in the OMH initiative centers on payment reform. To facilitate care transformation from a purely fee-for-service method to an increasingly performance and outcomes-based system, the practices and the plan agreed to a 5-part payment reform strategy. This included drug reimbursement, care management, shared savings, infrastructure development, and enhanced services. These are outlined in the following section.

Payments: Drug Reimbursement

Through the OMH program, all eligible intravenous and oral drugs administered and billed by the practice will be paid at the practice’s acquisition cost, as mutually agreed upon by the practice and Priority Health. In essence, practices are no longer paid margins on drugs. Rather, they are paid a monthly case management fee (see below). This, in effect, separates the oncologist’s income from drug choice while enhancing the ability to comply with oncologist-developed preferred treatment regimens and other elements of an oncology medical home.

Typically the practice’s acquisition costs are a small percentage above ASP. This reflects the delay between price increases experienced by practices and the delay in reflecting those prices in the ASP. By mutual agreement, we did not factor rebates received by practices into the acquisition price because the net value of rebates has fallen dramatically and because incorporating them into net acquisition cost calculations would be difficult to operationalize. In most circumstances, acquisition cost estimates were independently verified by a neutral third party (

Payments: Care Management Fee

The practices and the plan agreed to a monthly care management (CM) fee for patients receiving active chemotherapy, including oral and IV therapy, in lieu of payment for margins on drugs.The fee is independent of cancer type or method of drug administration (oral or IV), although the actual CM fee varies by insurance product. For example, commercial fees are in the $200 to $250 per month range, while Medicare and Medicaid fees range between $50 and $100 per month.

In order to pay the care management fee, a working definition of active chemotherapy was collaboratively developed. Active chemotherapy is defined as oral or IV administration of a cytotoxic, cytostatic, or biologic agent intended to treat cancer. A list of eligible drugs is maintained by the plan and periodically reviewed by the practices. It includes J9999 (antineoplastic drugs not otherwise classified), which is often used for new oncology agents. The parties agree to exclude some regimens considered maintenance chemotherapy, including oral anti-estrogen hormonal agents (eg, Aromasin, Arimidex), from the case management fee while including others such as maintenance chemotherapy for multiple myeloma.

A prevailing theme during discussions with physicians was a desire to be paid for their cognitive and ancillary services, not for margins on drugs. The care management fee supports services that are not typically compensated, including medication therapy management, patient education, psychologic assessment, team conferences, and financial and social work assistance (Sidebars A and B).

To incent participation in the oncology medical home program, the plan incorporated a 33% increase in drug margins by using ASP+12% as the allowed amount rather than the current ASP+10% commercial fee schedule. If a practice’s true acquisition cost is ASP+4%, then margins for purposes of calculating CM fees increase to 8% from 6%, or a 33% increase.

Payments: Shared Savings

A primary goal of the OMH project is to reduce avoidable ED visits and inpatient (IP) care and, in turn, reduce per capita cost. Priority Health and the practices will share any savings achieved if there is a statistically significant reduction in these 2 measures. The payout is on an annual basis. The plan provides baseline ED and hospitalization rates and interim utilization reports without financials to physician practices for tracking purposes.

Shared savings are not predicated on reducing drug costs or the total cost of care. However, shared savings do require compliance with the preferred cancer regimens. If practices are at least 90% average compliant with National Comprehensive Cancer Network (NCCN) or 80% average compliant with practice-developed preferred regimens for 4 selected tumor types, savings are shared 50:50. In contrast, if practices are only 70% compliant with NCCN or 60% compliant with practice-developed preferred regimens, then practices receive only 20% of the net savings.

Payments: Infrastructure

A critical element of the medical home is the development of clinical information systems with decision support, which can include electronic health records, electronic medical records (EMRs), patient registries, embedded practice guidelines, electronic care alerts and opportunities, and other decision- support tools. The infrastructure for managing patients’ plans of care incorporates systems for registering, tracking, measuring, and improving essential coordinated services for highrisk patients. Although all practices are eligible for federal funding for EMRs through the Health Information Technologyfor Economic and Clinical Health Act, these dollars are only available retroactively. Restructuring the care delivery systems within a practice requires intellectual, time, and financial resources. In recognition of the efforts required to transform a practice, the plan agreed to pay a $1500 per year per physician infrastructure payment support for the first 2 years of the program.

Payments: Enhanced Services

Tele-visits and e-visits. Not all health services require face-to-face visits. Priority Health allows the use of synchronous visits (tele-visits) or asynchronous visits (e-visits) when physical examination is not required. This reimbursement provides an alternative to the payment rule that precludes an evaluation and management service and chemotherapy infusion service on the same day. Reimbursement for alternate visit types is consistent with primary care medical home initiatives.

Treatment planning. Two new treatment planning codes (S0353 and S0354) allow physicians to be compensated for treatment planning and care coordination both for initial treatment and with a change of regimen. These codes are similar to those used by radiation oncologists planning radiation treatment. The use of these codes is not well defined. For the purposes of the OMH program, the plan and practices have agreed to the following criteria:

1. Diagnosis including histology, stage, and relevant biomarkers

2. Current performance status (Eastern Cooperative Oncology Group [ECOG], Karnofsky, or other)

3. Prognosis and goal/intent of therapy

4. Chemotherapy regimen, dosing and frequency, and planned number of cycles

5. A patient treatment plan to include criteria 1 through 4 and written side effect and management information, cancer-related resources, and key practice contacts and their role in the patient’s care

Reimbursement for other services including E&M codes, drug administration codes, and laboratory and imaging services is unchanged and paid according to the health plan fee schedule. Dispensing of oral drugs is permissible within the program; these drugs are subject to the preferred regimens previously described. Copays, coinsurance, deductibles, and out-of-pocket maximums for patients remain in effect; these do not apply to the patient case management fee or to ACP.

Care Delivery Redesign

The second key element of the OMH program is care delivery redesign. As part of the OMH program, Priority Health and the practices agreed to collaborate on care delivery redesign in 4 domains, including use of preferred regimens, care management, ACP, and survivorship. All parties agreed to focus on survivorship at a later date.

Preferred Regimens

Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
Welcome the the new and improved, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up