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Evidence-Based Oncology January/February

Lessons From an Oncology Medical Home Collaborative

John Fox, MD, MHA
Beyond the implementation challenges noted previously, 2 others bear mention. Reconciliation of the care management fees has been a timeconsuming effort. The plan pays the fee prospectively based on an estimated number of patients and reconciles within 120 days. Since the practice does not bill the plan, reconciling actual versus anticipated payments has required clarification of the eligibility rules. Most commonly, patients are ineligible for payment because they did not receive chemotherapy during a given month due to chemotherapy delays or, less commonly, hospitalization.

Priority Health pays the case management fee without requiring the practice to bill the plan. While this relieves the practice of having to bill the plan, many health plans are precluded from paying for non–claims-based services without prior approval from the employer. In 2013, new CPT-4 codes provide a mechanism for paying complex chronic care coordination services (99487-99489). This circumvents the challenges of non–claims-based reimbursement but does require practices to actively bill care management fees.

A more vexing problem has been the implementation of practicewide care redesign programs with support from only 1 payer. The preferred regimen component of the program is mutually compatible with major pathways programs within the state of Michigan. While the enhanced care processes are typically available to all patients, the

enhanced reimbursement is available only from a single payer at this time. (Medicare remains the largest single payer for most practices; in most practices the Priority Health market share is 5% or less.)

The Michigan Society of Hematology and Oncology (MSHO), representing Michigan oncologists, and the Community Oncology Alliance (COA), representing community oncologists, are working with all Michigan payers on a statewide oncology medical home/neighborhood proposal that would form the basis of an all-payer strategy. Payers met in November 2012 and reached consensus on the following points:

1. Payers are committed to finding alternative ways to pay for oncology care;

2. Payers have to find a way to assess quality of oncology care and reward it;

3. Use of the medical home model has transformed care;

4. There is synergy between the OMH and drug pathways; in fact, they are complementary;

5. Incorporation of advance care planning is an essential component of any transformation; and

6. Collaboration among payers can hasten the pace of change; lack of it can drive change in the provider community to a halt.

Finally, bridging the gap between desired state and current state takes resources that practices don’t have or can’t make available. To bridge that gap, some practices have partnered with external resources such as Physician Resource Management, Ion Solutions, COA, and MSHO to effect systems and process changes.


The care management and performance elements of the OMH model can be applied to any oncology practice. While the OMH model of payment reform and care management redesign works especially well with self-employed community practices, the model is less appealing for employed practices, especially those affiliated with 340(b) facilities that are unlikely to agree to drug reimbursement at acquisition costs. Nevertheless, engaging employed physicians in efforts to improve cancer care quality, value, and health outcomes is critical to raising the communitywide standard of care.

A second limitation is the applicability of this model to practices where government payments form a substantial portion of the practice’s income. While a number of mechanisms exist for enhancing payment to providers, lack of applicability to Medicare and Medicaid recipients further fragments a challenging and complicated reimbursement web, creating misaligned incentives for patient care.


The Oncology Medical Home program demonstrates an effective working model for restructuring cancer payments and care. It complements and in fact takes oncology pathways programs to a new level through creation of practice-specific preferred regimens. It eliminates practices’ financial dependence on drug margins and reduces the current misalignment between cancer payments and cancer outcomes by taking a patient-centric approach. Further, it enhances practice payments for cognitive services provided by the oncology team and rewards teams for improving patient care and reducing avoidable ED visits and inpatient care. Provider-payer partnerships are necessary to evaluate experimental payment models that create greater provider accountability for Triple Aim outcomes of patient experience, individual and population health outcomes, and per capita cost.

Sidebar A. Eligibility for Care Management Fee

Members are eligible for the care management fee if they are:

1. Active Priority Health members for any product (HMO, POS, MCD, MAPD, PPO). Members are immediately eligible; there is no defined minimum time period for eligibility (eg, 6 months). This applies to patients who have Priority Health as either a primary or secondary insurer

2. Receiving active infused or oral chemotherapy—independent of when they started—in the office or home setting

a. If a patient became a Priority Health member in the middle of therapy, he or she is still eligible

b. All patients on chemotherapy are eligible, not simply those on a “preferred regimen” protocol

3. Admitted to the hospital for complications unless also receiving chemotherapy

4. Receiving palliative care services and chemotherapy

5. Enrolled in a clinical trial and receiving chemotherapy in the office setting Members are ineligible for the care management fee for a calendar month if during that calendar month they:

1. Receive only selected drugs for maintenance chemotherapy (eg, tamoxifen)

2. Receive chemotherapy in the hospital

3. Receive chemotherapy in a non-office, non-home setting (eg, hospital outpatient or infusion center)

4. Do not receive chemotherapy

5. Receive only radiation therapy

Sidebar B. Calculation of Care Management Fee

The monthly care management fee is calculated by dividing the participating practices’ baseline net margins on drugs by the calendar months in which patients received active oral or IV chemotherapy. Members receiving oral and IV chemotherapy simultaneously are only eligible for 1 care management fee per month.

1. All medical drug claims for oncology drugs (CPT-4 codes, J-codes, C-codes) from the tax ID or IDs of the practice(s) are identified for the agreed-upon 12-month time period preceding the demonstration project initiation.

2. The net margin is defined as the difference between the average acquisition cost and the plan’s fee schedule. The net margin is calculated for each patient and each product and then summed to yield the product-specific net margin.

3. Active chemotherapy months are calculated by merging pharmacy and medical claims databases and identifying patients with a cancer diagnosis who received an active chemotherapeutic treatment during that month.

4. Product-specific care management fees are then calculated as the net drug margin during a 12-month period divided by the total number of chemotherapy months.

Author Affiliation: From PriorityHealth, Grand Rapids, MI.

Funding Source: None.

Author Disclosure: The author reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design; acquisition of data; analysis and interpretation of data; drafting of the manuscript; and critical revision of the manuscript for important intellectual content.

Author correspondence to: John L. Fox, MD, MHA, AVP Medical Affairs, Priority Health, 1231 E Beltline NE, MS 1255, Grand Rapids, MI 49525. E-mail:
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