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Experts Discuss Medicare's New Oncology Care Model

Evidence-Based OncologyJune 2015
Volume 21
Issue SP8

The American Journal of Managed Care convened experts in health policy, from health plans, and from community oncology, to discuss OCM and other issues in oncology care during the Oncology Stakeholders Summit, Spring 2015 Peer Exchange.

The CMS Innovation center (CMMI) recently announced the development of a new payment and delivery model to improve the effectiveness and efficiency of specialty healthcare. The new Oncology Care Model (OCM)1 one of several models being developed by CMMI requires participating physician practices that administer chemotherapy to enter into payment agreements with CMS to measure financial and performance accountability for episodes of care. Incentives in OCM include a monthly per beneficiary-per month (PBPM) payment of $160 for the entire duration of the episode, along with the possibility of a performance-based payment to foster quality care at a lower cost during the episode. CMS hopes to encourage participation by private payers, which would allow for a multipayer model to incentivize care transformation at the physician practices.

To discuss OCM and other issues in oncology care, The American Journal of Managed Care conducted the Oncology Stakeholders Summit, Spring 2015 Peer Exchange. From community oncology, to health policy, to health plans, the Summit brought diverse expertise together. The moderator of the panel, Bruce Feinberg, MD, vice president and chief medical officer of Cardinal Health Specialty Solutions, was joined by Scott Gottlieb, MD, resident fellow at the American Enterprise Institute (AEI); Brian Kiss, MD, vice president of Healthcare Transformation at Blue Cross Blue Shield (BCBS) of Florida; Michael Kolodziej, national medical director for Oncology Strategy at Aetna; and Ted Okon, MBA, executive director of Community Oncology Alliance (COA). Gottlieb, currently at AEI, has performed various roles at the FDA, including deputy commissioner for medical and scientific affairs, and has also served as a senior policy advisor for CMS.

Feinberg started the discussion on the OCM with the suggestion that in asking private payers to participate, Medicare shows that it expects wider adoption of the model by clinical practices. In Feinberg’s opinion, payers, who want to experiment with bundled payment, episode of care, or value-based reimbursement models, might find it easier to do so when they partner with Medicare. He then asked Okon whether he saw similarities between COA’s Oncology Medical Home (OMH) model and OCM, and what he might see as the advantage of a collaboration between private payers and CMS on this front.

Okon believes that both OMH and OCM are steps in the right direction; they have similarities because they are both based on a care coordination fee and shared savings. However, noting that the 6-month bundle in the Medicare OCM is diametrically opposite of the premise of shared savings, he added, “It’s quite ironic, too, because one of the biggest problems with the accountable care organization (ACO) model, that has been realized now after 2 or 3 years, is it was built on game sharing. So, basically, practices that are doing well in an ACO or ACOs that are doing well all of a sudden find out they can’t do any better because they’ve corrected the problem.” With OCM, Okon said, CMS intends to turn around low-performing practices, and involving private payers in the mix would indeed help. But he is absolutely against the long list of measures that both payers and providers had to submit through the letter of intent (LOI) for participation.

Kiss agreed, adding that while BCBS of Florida has been one of the pioneers with oncology payment models, his organization backed off from participating in the OCM after considering the administrative burdens and the associated costs that these measures would transfer to smaller physician and community practices. “We’re doing our things independently; that’s one of the things we’ve been successful with early on as a payer,” he added, largely because we avoided some of the CMS reporting requirements and we’re able to work collaboratively with systems, taking into account the realities of administrating everything we want to do.”

Gottlieb took a step back and provided his hypothesis on the broader impact of these measures. According to him, increased administrative burdens are a major driver of the consolidation of smaller, community-based practices with hospitals. He also thinks there may be a migration of physicians especially with the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which repealed the Sustainable Growth Rate formula to managed care plans like the Medicare Advantage Plan, which can reduce their administrative burden that entails a fee-for-service Medicare plan. However, Gottlieb thinks this may not impact oncology as much, which sees a higher proportion of Medicare patients.

Okon emphasized the lack of measurements in the CMMI programs being floated. “You don’t know the measurements, so how can you possibly turn around and do the things you need to do in your practice from a process standpoint, when you don’t have a good idea of where you stand?” he said. To add to this complication, Gottlieb said, the requirements constantly change, which makes it even more difficult for healthcare systems to adapt and improve.

Okon added that the feedback received is much too delayed to implement any changes. On the other hand, he applauded the UnitedHealthcare model, which “brought the practices together and they knew exactly how they were going to be measured, they knew what the starting measurement was, and they got regular feedback.”

Kolodziej thinks that while the OCM model is too prescriptive, it has initiated discussions on the concept of transforming healthcare delivery and making physicians accountable for delivering a certain quality of care. Kolodziej said that he’s developing oncology medical home relations with several practices, and also with integrated medical centers, the goal being to inculcate such concepts as continuous quality improvement, performance measurement, and considering the patient experience. However, he pointed out, after you develop all these performance metrics, there’s no assurance that practices will be reimbursed for it all. So he has developed a much simpler model, but does not know whether CMMI will let him run his model through its program.

Indicating that one of the reasons everyone thinks CMMI delayed its LOI deadline by 2 weeks was that payers were wary of coming on board, Kolodziej provided the flip side scenario he said practices are only signing up to participate in the OCM because of the PBPM for the 6-month period. “That’s not the right way of doing things,” he added, because newer practices may either lose money or just break even, while more established practices may earn some profit. And the way the model is currently structured, “They say it’s a 5-year model, but built within that is [that] at the 3-year point, if you haven’t [generated] any savings, you’re out,” Kolodziej said.


1. Oncology care model. CMS website.


. Published Accessed May 18, 2015.

Both Okon and Kolodziej agreed that CMMI cannot have a global prescription for all clinics. “It’s like what Scott said. Healthcare is local,” said Kolodziej, and he concluded that while bigger practices can adapt to the OCM, smaller practices just cannot.

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