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Azar Announces Mandatory Oncology Payment Model Is Coming

Mary Caffrey and Allison Inserro
The announcement is an about-face from earlier efforts that scrapped a cardiac care bundled payment program originally developed during the Obama administration.
This story has been updated.

A mandatory payment model is coming in oncology care, HHS Secretary Alex Azar said Thursday during an appearance at a value-based care summit.

Azar said that the administration would “revisit” mandatory models that it had previously scrapped in cardiac care and said the time had come for “exploring new and improved episode-based models in other areas, including radiation oncology.”

Right now, the Centers for Medicare and Medicaid Innovation is working with practices on care transformation through the Oncology Care Model, or OCM, but that that 5-year pilot is voluntary.

The Trump administration did not move forward with a mandatory cardiac care model that was developed under the Obama administration and pulled back on bundled payments that were set to be made mandatory in several markets for hip and knee replacements. Those decisions were made by Azar’s predecessor, Tom Price, MD, an orthopedic surgeon who was a known critic of bundled payments.

However, Azar, who previously worked in the pharmaceutical industry, said in prepared remarks to the Patient-Centered Primary Care Collaborative that bundled payments are back, and not just through voluntary programs like the Bundled Payments for Care Improvement initiative, or BPCI, which he said has shown significant savings.

Azar had a different message about mandatory bundles today: “We have now re-examined the role that models like these could play in value-based transformation,” he said. “We’re also actively looking at way to build on the lessons and successes of the Comprehensive Care for Joint Replacement Model.”

He cited the agency’s ambitions as complementing the coming mandate to peg Medicare drug prices to what other countries pay based on an international index.

In a statement, the chief executive officer of the American Society for Radiation Oncology (ASTRO) said the organization is pleased that a radiation oncology alternative payment model (RO-APM) is moving forward, but also expressed concern that it would be mandatory from the start.

“ASTRO has worked for many years to craft a viable payment model that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care. ASTRO believes its proposed RO-APM will allow radiation oncologists to participate fully in the transition to value-based care that both improves cancer outcomes and reduces costs," said Laura Thevenot. She added that "Care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices, particularly given the very high fixed costs of running a radiation oncology clinic."

Steven J. Libutti, MD, FACS, director of the Rutgers Cancer Institute of New Jersey and Robert Wood Johnson Medical School and vice chancellor for Cancer Programs for Rutgers Biomedical and Health Sciences at Rutgers University, also said that implementation of what HHS is planning will be key in determining how it is received.

“It depends on what we’re defining as the bundle and how we define bundled care versus episodes of care,” he said, speaking to The American Journal of Managed Care® at a population health conference. “The concepts are similar, but how they are implemented are different.”

Bundling a payment is not the same thing as an episode of care, and the cancer institute and some payers, most notably Horizon Blue Cross Blue Shield of NJ, are exploring the idea of care episodes with some test cases.

“Episodes of care are really looking at the payment and the specific illness that they’re dealing with and defining what we consider the start of their engagement with that episode and what would be the end of the acute care of that episode,” Libutti said.

Providing all the episodes of that care, defining the cost, and also setting the stages for how payments are received (such as up front or during milestones), is complicated by several varying factors, he said. Those factors include “where the care is being delivered, what stage of disease the patient has, the requirements of what components of care are in that bundle, or episode.”

While Libutti agreed with the idea of looking at episodes of care, bceause it will lead to better quality and value, bundling payments alone, without including quality and keeping the patient in mind, may not be the best way to either deliver value or lower costs, he said.

“We just have to be careful as we formulate these episodes that we’re keeping value as the primary goal of what we’re trying to do,” said Libutti.

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