Applying Accountable Care to Oncology: Developing an Oncology ACO

Published on: 
Evidence-Based Oncology, March/April , Volume 19, Issue SP3

The cost-saving potential of specialty or disease-specific ACOs can be huge...but it is unclear whether these specialty services are more efficiently provided through their own ACO or as ancillary to the burgeoning primary care ACO marketplace.

The accountable care organization (ACO) has been the buzzword on the tip of everyone’s tongue. With January’s announcement by the Centers for Medicare & Medicaid Services of an additional 106 ACOs, the number joining the Medicare Shared Savings Program is now 259, serving 4 million beneficiaries.1 An estimate by the consultant organization Leavitt Partners pegs the number of active ACOs at 428, operating in 49 states.1

The principal ideas underlying the ACO concept are (1) coordination of care through integrated services (or virtually integrated services) and (2) financial incentives for clinicians and hospitals to efficiently manage patients, saving money in the process, and in the Accountable Care Act’s Medicare Shared Savings initiative,2 sharing those savings with the provider-partners in the ACO. The majority of ACOs have focused on primary care. Policy makers agree that the ACO concept is most easily applied to primary care, which may have the highest payoff in terms of cost savings through disease prevention and early diagnosis and management.

A few specialty models of ACOs are being piloted, but these are more dependent on secondary prevention of disease episodes or complications. For example, DaVita (, based in Denver, focuses on patients with kidney disease and owns more than 1900 outpatient dialysis centers.3 Its Accountable Kidney Care Collaborative seeks to use the ACO model for patients with end-stage renal disease. The cost-saving potential of specialty or disease-specific ACOs can be huge, because of the existing costs associated with treating these patients, but it is unclear whether these specialty services are more efficiently provided through their own ACO or as ancillary to the burgeoning primary care ACO marketplace.

Considerations in an Oncology ACO Model

The various common cancer types and multitude of therapies used to treat them may complicate the mission of an ACO. For patients with advanced kidney dysfunction, a specialty ACO may expect savings to be derived from lower hospitalization costs through improved patient care. Considering the cost of treating many neoplasms, should cost savings be a primary goal? Perhaps the principal mission of an oncology ACO would be to better standardize care pathways, use integrated care, and improve counseling of patients in how to manage the course of disease.3

If this is the case, oncology ACOs focused on the shared-savings model will likely come up short. In fact, the choice of whether to treat actively or simply monitor a cancer’s progress (ie, watchful waiting in prostate cancer) may be money saving to the ACO, but may seem to others as a sign that the organization is willfully withholding care in order to save money.3 This challenge ensures that the decision making and clinical pathways must be dictated by the clinicians, not the organization.



Of course, the question of developing an oncology-based ACO should not imply that present ACOs do not provide oncology services through their networks. A survey conducted in 2011 found that health plans and health systems forming ACOs were indeed including oncology providers in their plans.4 According to health plan and health system executives who were forming ACOs, 65% indicated that oncology services were closely aligned or already employed by the organization (). Another 30% had loose affiliations with oncology providers. Overall, the executives responding to the survey questioned whether a cancer-related ACO model would be the way forward. They indicated that because of the complex issues associated with oncology care (and other specialty-treated diseases, for that matter), most were more focused on learning how the ACO will perform in clinical areas that have more predictable costs, like primary care.

Two Health Plans Take the Lead

Despite these challenges, Florida Blue (Blue Cross and Blue Shield of Florida) recently dove headlong into the oncology ACO arena. First, in May 2012, the insurer announced an agreement with Baptist Health South Florida and Advanced Medical Specialties, which provides oncology services in Miami, to form an oncology ACO. Next, in December 2012, Florida Blue unveiled an oncology ACO with Moffitt Cancer Center in Tampa.5 This collaboration will focus on common cancers and will “identify and select quality metrics for the program.” Slated to start this year, Florida Blue and Moffitt hope to improve patient care by sharing clinical and administrative claims data. It seems that this venture will seek to incorporate a value-based reimbursement system. Additionally, this agreement will emphasize patient engagement in their care and provide services for family members who care for the patients, in an effort to reduce costs Adoverall and improve outcomes.3 In the press release announcing the agreement, Dr Alan F. List, president and CEO of Moffitt, said, “This partnership with Florida Blue focuses on the value we provide our patients, and that becomes a positive for everyone. I anticipate that we will learn a lot from this new venture and that it will help us to continue to improve cancer care.”

Aetna has been involved with oncology ACO model formation for the past few years. The health plan doesn’t view it simply as a new way to pay physicians. Aetna views it as necessary to try to move clinical pathways front and center in the oncologists’ offices. Ira Klein, MD, chief of staff to Aetna’s chief medical officer, and the head of its oncology strategy, told Evidence-Based Oncology, “Cancer care is among the top 3 highest medical cost categories in the United States. Oncology also is an area of clinical care that is characterized by high variability in costs and treatment choices across the country. Given this large medical cost footprint and significant potential for clinical improvement, we believed and showed that applying evidence-based guidelines-pathways-to cancer care can help address the variability and get to equal or better health outcomes and lower costs.”

He noted that widespread adoption of a pathways-based model requires changes in the approach to care, decision support, and payment. “Supporting oncologists through these changes is critical,” said Klein, “and new contractual relationships must drive positive change for their practices and their patients.”


Aetna teamed with US Oncology Network’s Texas Affiliate, announcing the results of a shared savings model at the American Society of Clinical Oncology symposium in late 2012.6 According to Aetna, members in the program had at least the same clinical outcomes as members not under the shared savings program, but emergency department and hospital visits dropped significantly, as did hospital admissions and hospital days (). This resulted in 12% lower costs overall for lung, breast, and colorectal cancers alone.

“The concept for a shared savings model came from the understanding that oncology care is clinically complex in almost every case,” commented Klein. “A comprehensive oncology management strategy starts with patients and the goal of adding value to their cancer therapies. But unless incentives are aligned, there’s no traction for the physicians and support staff to undertake the difficult work of practice change at the office level. We feel that to gain increased value, you have to flip the coin to the other side and negotiate shared risk.

“We replaced the traditional buy-and-bill model with a system that is rewarding in more appropriate ways, including payment redesign and use of a medical home model approach to patient care. We offer greater payment as an incentive for adherence to pathways, especially with regard to prescribing generic drug products when appropriate. The payment structure also focuses on what physicians do for patients in the office as well as what they do to keep them out of the need for care.”

What, if any, early lessons have plans learned about developing the relationships necessary for an oncology ACO? According to Klein at Aetna, “Physicians are key component to the success of pathways implementation, and aligned incentives are a must. Having a trusted relationship with oncologists is critical as well, because they are providing the care. Without their input, no program can really be effective.”

He also pointed out that “Physicians also have an important role in helping the insurer gather and analyze data, which can help in developing additional program goals going forward. We require some mechanism of data capture and strongly encourage interactive electronic clinical decision support tools. This gives us an unbiased activity reporting, which we can then use to feed the ‘plan, do, check, act’ cycle of quality improvement back to the physicians and offices at the practice level.” Klein noted that from earlier pilots, they realized that oncologists appreciated these tools as learning guides. “Process improvement reduces error while teaching about habits, both good and bad.”

And what of Aetna’s long-term goals? “While we focus on tools used within practices for many reasons (workflow, precertification relief, error reduction), we will be looking to connect the inoffice environment with the care delivery ecosystem outside the oncology office in the future,” replied Klein. “Oncologists can be ideal ‘medical neighbors’ in medical home—type integrated delivery systems. In an ACO, it’s all about working together. This can be parlayed into bundles of care, as well.”

Additional pilot programs in oncology ACOs are being sponsored by Blue plans in California, Maryland, Michigan, New Jersey, Tennessee, and South Carolina.4

Tackling Oncology Care Payments

One of the daunting challenges when considering shared savings methods for oncologists, as well as many other specialties, is the use of fee-for-service reimbursement, along with the “buy-and-bill” system for purchasing oncology medications, both sources of revenue for the oncology practice. Medicare and commercial plans have moved to average manufacturer price—based billing for drugs, which have limited buy-and-bill practices in recent years, but these issues need to be tackled before oncology ACOs can be developed in the mainstream.

UnitedHealthcare, though not starting an oncology ACO per se, has a pilot program (more of a patient-centered medical home model) which may help set benchmarks as to how oncology providers can be paid in such an organization. In this pilot, providers are paid on an episode-of-care basis. This pilot involves 5 oncology practice sites.7 The episodes of care were defined by the practices themselves for 19 cancer subcategories. This payment for cancer care is fixed, and drugs are reimbursed only at the manufacturer’s cost, discouraging buy-and-bill practices. Patient visits are billed separately, and UnitedHealthcare also pays oncology practices a case management fee, which may promote better coordination of care.7

In this move away from fee-for-service payments, which would be unworkable in an ACO or shared savings environment, the up-front episode-of-care fee covers the usual treatment period for a patient with breast, lung, or colon cancer. If the cancer recurs, this episode-of-care payment can be renewed every 4 months during the course of the disease. This provides the continuity of payment needed for oncologists to continue overseeing the patient’s care (regardless of whether drug therapy is utilized).

This move is echoed by the efforts of others, such as those by Andrew Pecora, MD, president of the New Jersey—based Regional Cancer Care Associates, which was featured in the last issue of Evidence-Based Oncology.8 From the standpoint of building ACOs, it looks like a move in the right direction. EBO

Funding Source: None.

Author Disclosure: Mr Mehr reports receiving payment for involvement in the preparation of this article.

Authorship Information: Concept and design; drafting of the manuscript; critical revision of the manuscript for important intellectual content. 1. Accountable care organizations have more than doubled since 2011 (press release). Leavitt Partners, February 20, 2013. Accessed February 22, 2013.

2. Medicare Program; Medicare Shared Savings Program: Accountable Care Organizations. CMS-1345-P. Federal Register, Vol. 76, Issue 67. November 2, 2011.

3. Stagg Elliott V. Disease-specific ACOs make their debut. American Medical News, January 28, 2013. Accessed January 31, 2013.

4. Barkley R. Where does oncology fit in the scheme of accountable care? J Oncol Pract. 2012;8:71-74.

5. Florida Blue and Moffitt Cancer Center Create Cancer-Specific Accountable Care Arrangement (press release). Florida Blue, December 20,2012. Accessed January 31, 2013.

6. Aetna, the US Oncology Network provide more evidence that clinically proven, integrated cancer care enhances quality and controls costs: positive outcomes from new study presented at ASCO Quality Care Symposium. Aetna, December 6, 2012. Accessed January 12, 2013.

7. Blum K. Episodic payment put to the test. Clinical Oncology News, December 2010. Accessed January 15, 2013.

8. Focusing on clinical and economic outcomes—not guidelines: is it time for a new direction in oncology care? Am J Manag Care. 2013(1 Spec No.):SP43.