Lessons From an Oncology Medical Home Collaborative

Evidence-Based Oncology, January/February, Volume 19, Issue SP1

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 (www.ncqa.org/Programs/Recognition/PatientCenteredMedicalHomePCMH.aspx). 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 (www.iononline.com).

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.

Sidebars A


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 (and ).

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

While many pathways programs implemented by third parties are based on state or regional consensus, they remain unnecessarily broad and lack input from individual oncologists and practices. In the OMH program, the plan and the practices mutually agreed to resolve both of these issues by having oncology practices establish single “preferred regimens” for at least 4 highvolume conditions in the adjuvant and first- and second-line metastatic settings, where appropriate. The regimens must be consistent with the most recent version of the NCCN guidelines (www.nccn.org).

Incorporation of performance status, such as the ECOG performance status or Karnofsky score, serves as a critical data point for decision making. It is relevant both for selecting the therapeutic options appropriate for an individual patient and for assessing whether or not chemotherapy should be given on a given day. In fact, the first ASCO Choosing Wisely quality improvement measure proposes avoiding unnecessary anticancer therapy, including chemotherapy, in patients with advanced solid-tumor cancers and a low performance status (3 or 4), and instead focusing on palliative and supportive care or clinical trials (http://connection.asco.org/Magazine/Article/ID/3190/Choosing-Wisely-Constructing-a-Top-Five-List-in-Oncology.aspx).

Table 1

Early results demonstrate that practices can readily meet these requirements. Further, their selections of preferred regimens are very similar (), which is remarkable because the practices developed these regimens independent of each other and without external input.

Table 2

At present, there is no automated means of collecting tumor type, stage, biomarker status, or performance status. All results are based on self report. Most practices have agreed to use an independent third party to collect and report results. The results from the first 2 months of the program are shown in . Overall, 97% of adjuvant, first, or second-line therapies were consistent with the NCCN guidelines, while 86% of therapies were consistent with the practices’ self-selected preferred regimens.

Care Management

Proactive patient engagement and early intervention is critical to reducing potentially avoidable care and complications. Consultants in Medical Oncology and Hematology, PC, has demonstrated that effective triage and symptom management protocols can reduce ED visits per chemotherapy patient year by 65% and hospitalizations per chemotherapy patient year by 43%.6,7 Furthermore, the vast majority of clinical calls (approximately 75%) can be managed at home when patients call early in their symptom course.

The Oncology Medical Home care management program is intended to improve patient care and outcomes by having a consistent expectation of patients and practices alike. For patients, the plan and the practices mutually agreed that setting patient expectations to call the practices first was critical to reducing side effects, ED visits, and hospital admissions and to improving time on therapy. Likewise, we agreed that proactive care management required patient education protocols related to expected medication side effects, and phone triage protocols to ensure consistency in response by the clinician. At minimum, specific target areas include chemotherapyinduced nausea and vomiting, dehydration, constipation & diarrhea, fever, febrile neutropenia, depression, and fatigue.

Practices track their triage line call disposition with, at a minimum, the following categories: manage symptoms at home, office visit today, office visit tomorrow, referral to primary care or specialty care physician, referral to the ED, or direct admission to the hospital. Re-engineering practices to meet these requirements has taken more time and effort than anticipated. Many practices have adopted software applications such as Navigating Cancer for their patient education portal. Most practices are adapting the Oncology Nursing Society’s PEP program for incorporation in their EMRs.


Both the practice and the health plan are committed to promoting evidencebased initiatives supporting the goals of improved patient experience, improved health outcomes, and reduced per capita costs. Peer-reviewed evidence shows that patients who participate in an ACP program have less fear and anxiety, have a better ability to influence and direct their medical care, believe that their physicians have a better understanding of their wishes, and have a greater understanding and comfort level with their illness than they had before ACP. Moreover, for patients who participate in ACP discussions there are fewer associated resuscitations, fewer intubations, fewer ICU days, better quality of life, earlier referrals to hospice, and less depression.8 Among caregivers, there is a better quality of life, less depression, and less bereavement when end-of-life issues are discussed.9 Patients with advanced cancer who reported having EOL conversations with physicians had significantly lower healthcare costs in their final week of life. Higher costs were associated with worse quality of death.10

Both ASCO and the NCCN Palliative Care Guideline (V2.2012) integrate ACP. For example, the latter states that providers should “elicit personal values and preferences for end of life care and congruence with values and preferences of family and health care team… (and) encourage the patient to discuss goals and preferences with family, provide advanced directives, and designate healthcare proxy.” Health insurers are required to have shared decisionmaking programs in place under Section 936 of the Patient Protection and Affordable Care Act (PPACA). Shared decision making requires collaborative processes between clinicians and patients, caregivers, or authorized representatives. ACP is, by definition, a shared decision-making process that provides patients and families with information about trade-offs among treatment options and facilitates the incorporation of patient preferences and values into the medical care plan.

By mutual agreement between the physician practices and the plan, the former must establish an ACP program for patients receiving chemotherapy. At a minimum this must include a facilitated discussion with patients receiving treatment for metastatic disease within 60 days of initiation of chemotherapy and prior to additional treatment for disease progression. The facilitated discussion is typically with a trained staff member—not necessarily with the physician—and the patient and family members. When ACP documents are completed, the program requires insertion into the chart and filing with the patient’s preferred hospital.

The optimal timing for these discussions is not known. The timing requirement for this program is arbitrarily arrived at based on the assumptions that 1) the majority of people would expect at least 1 trial of therapy, 2) introduction at the initial visits would create confusion, and 3) most patients would not progress within the first 60 days. However, it is known that goals and preferences for care change with cancer patients, thus the need for followup discussions each time the patient’s disease progresses.

Each practice is allowed to design or select a program most suitable to the practice. One practice has chosen to implement the Respecting Choices program from Gunderson Lutheran Foundation (www.gundluth.org/foundation) while other practices have adopted the Five Wishes program (www.agingwithdignity. org). In either case, practices have had to design a replicable process for ensuring that patients can have a facilitated discussion at the relevant time. All practices have chosen to have a scripted introduction, indicating that these discussions occur with all patients in the practice who have incurable disease. Other logistical issues that need to be resolved are who will introduce the topic, how the appointment is to be scheduled, where consultations will occur (home or office), and how to bill for the services.

Most experience to date has been with the initial discussion. In fewer than 10% of cases do patients decline the discussion outright, while approximately 25% of patients indicate that they’ve already had a discussion or have an advance directive. In these circumstances, strategies need to be developed for engaging patients and their families in a review of their goals and preference for care to assist the practice in knowing and respecting their choices. For patients and families who have gone through the process, over 90% have welcomed the discussions and found them helpful in sharing beliefs and preferences. In fact, in one practice, the availability of a trained social worker and psychologist has led to more referrals of existing patients by oncology infusion nurses than of new patients.

Many challenges have surfaced. Typically these conversations take 1 to 2 hours, yet reimbursement is not available from most insurers. Priority Health has begun to reimburse any licensed healthcare provider for discussion facilitation using S0257, counseling and discussion regarding advance directives or end of life care planning and decisions, with patient and/or surrogate. Documentation for reimbursement minimally includes 1) the person designated to make decisions for the patient if the patient cannot speak for him- or herself, 2) the types of medical care preferred, and 3) the comfort level that is preferred. This code can also be used for POLST documentation.

At present, coverage is only for fully insured and self-insured patients, although the plan is actively exploring how to cover these services for Medicare and Medicaid recipients. Although the ACA only requires that the plan cover these services as preventive services when recommended by the US Preventive Services Task Force, they are covered by the plan at no cost to the patient based on national recommendations from the American College of Physicians and the American Medical Association, independent of age or health status.

Oncology Medical Home Performance Metrics

Table 3

The third key element in the OMH initiative centers is codevelopment of performance metrics in 4 different domains. A fifth domain on survivorship will be added later. The initial metrics and the party responsible for the measurement are outlined in.

Of the 4 domains, the most challenging has been the ACP domain, primarily because getting accurate date-of-death data is a challenge. Measures of admission and chemotherapy during the last weeks of life as well as hospice in the last 3 days of life are all dependent on accurate date-of-death data. While practices could secure this information, the preferred alternative is to match the health plan cancer registry to the State of Michigan Vital Records death index. A probabilistic linkage to the national death index is also a viable albeit more expensive option.

Another significant measurement challenge has been tracking phone triage disposition to assess the impact of enhanced patient education and nursing triage protocols. Capturing triage disposition in most EMRs is difficult, requiring either inefficient manual tallies, electronic tools independent of the EMR, or expensive revisions to EMR software.

Implementation Challenges

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: john.fox@priorityhealth.com.1. Blayney DW, Severson J, Martin CJ, Kadlubek P, Ruane T, Harrsion K. Michigan oncology practices showed varying adherence rates to practice guidelines, but quality interventions improved care. Health Aff (Millwood). 2012;31:4718-4728.

2. Newcomer LN. Changing physician incentives for cancer care to reward better patient outcome instead of use of more costly drugs. Health Aff (Millwood). 2012;31(4):780-785.

3. Bach PB, Mirkin JN, Luke JJ. Episode-based payment for cancer care: a proposed pilot for Medicare. Health Aff (Millwood). 2011;30(3):500-509.

4. Total Cost of Cancer Care by Site of Service: Physician Office vs Outpatient Hospital. Avalere Health LLC. http://www.avalerehealth.net/ news/2012-04-03_COA/Cost_of_Care.pdf.Published March 2012. Accessed December 30, 2012.

5. Fitch K, Pyneson B. Cancer patients receiving chemotherapy: opportunities for better management. Milliman Client Report. http://publications. milliman.com/research/health-rr/pdfs/cancer-patients-receiving-chemotherapy.pdf. Published March 30, 2010. Accessed December 30, 2012.

6. Eagle D, Sprandio J. A care model for the future: the oncology medical home. Oncology. 2011:25(7).

7. Sprandio J. Oncology patient-centered medical home and accountable cancer care. Commun Oncol. 2010;7:565-572.

8. Wright AA, Zhang B, Ray, A, et al. Associations between end-of-life discussions, patient mental health, medical care near death, and caregiver bereavement adjustment. JAMA. 2008;300(14):1665-1673.

9. Detering KM, Hancock AD, Reade MC, Silvester W. The impact of advance care planning on end of life care in elderly patients: randomised controlled trial. BMJ. 2010;340:c1345.

10. Zhang B, Wright AA, Huskamp HA, et al. Health care costs in the last week of life: associations with end-of-life conversations. Arch Intern Med. 2009;169(5):480-488.