Evidence-Based Oncology
December 2018
Volume 24
Issue 13

Medical World News: Managed Care Updates, December 11, 2018

Azar Announces Mandatory Oncology Payment Model Is Coming

A mandatory payment model is coming in oncology care, HHS Secretary Alex Azar said November 8, 2018, 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, in prepared remarks emailed to Evidence-Based OncologyTM, the time had come for “exploring new and improved episode-based models in other areas, including radiation oncology.”

Right now, the Center for Medicare and Medicaid Innovation is working with practices on care transformation through the Oncology Care Model (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, which he said has shown significant savings.

Azar had a different message about mandatory bundles: “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 ways 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. “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.”1

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 in an interview 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. “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 New Jersey, 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 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.”

Although Libutti agreed with the idea of looking at episodes of care, because 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.


ACOs Had No Signficant Impact on Spending for Patients With Cancer

1. Statement in response to HHS Secretary Azar’s comments on a radiation oncology alternative payment model [press release]. Arlington, VA: ASTRO; November 8, 2018. Accessed November 12, 2018.Although accountable care organizations (ACOs) have been shown generally to reduce costs for patients compared with similar patients who didn’t receive care in an ACO, the same cannot be said for cancer care in ACOs.1 ACO practices did reduce costs for cancer care, but not at a more significant rate than non-ACO practices during the same time.

A study in the Journal of Clinical Oncology, the journal of the American Society of Clinical Oncology, compared patients with cancer who were treated at ACO practices with those treated at non-ACO practices in the same geographic region.2

With the high cost of cancer care and the incidence of cancer expected to increase as the population ages, “it is critically important to understand how broad policy efforts to control healthcare spending are impacting the care of patients with cancer,” the authors wrote.

The researchers analyzed a 20% sample of Medicare fee-for-service beneficiaries using 2011 to 2015 Medicare Research Identifiable files. They matched practices that became part of an ACO to non-ACO practices in the same region and calculated costs and utilization for beneficiaries.

The analysis showed that total mean spending per beneficiary was significantly different between ACO and non-ACO patients in the pre-ACO period ($18,909 vs $18,458, respectively), but that decrease in spending for ACO patients (—$308) was not significantly different from the decrease in spending for non-ACO patients (–$319).

The data showed a significant increase in outpatient spending from the pre- to post-ACO periods, but the increases were not significantly different between ACO and non-ACO patients. In comparison, radiation therapy and chemotherapy spending decreased between the pre- and post-ACO eras, but there were no differences in the decreases between the 2 groups.

The authors postulated a few reasons why ACO practices didn’t reduce spending or utilization much more than non-ACO practices. For instance, cancer care is complex and requires coordination across a variety of providers and settings, and it can be difficult to implement strategies to reduce utilization across settings. Second, technological advances and novel devices and drugs have contributed to the increasing cost of cancer care. Third, ACOs may have been targeting other chronic diseases.

Lastly, oncology providers have been engaged in multiple initiatives to promote value and alternative ways to deliver and pay for care, such as the Oncology Care Model and oncology medical homes, which could have resulted in widespread improvements that simultaneously affect both ACO and non-ACO patients.

“Although it may be too early to see an impact of ACOs on patients with cancer, it is also possible that ACOs may need to explicitly focus on patients with cancer to improve their care and reduce unnecessary spending,” the authors concluded.


  1. Joszt L. NAACOS-funded study: ACOs save the government $541.7M in 2013-2015. The American Journal of Managed Care® website. in-20132015. Published September 19, 2018. Accessed October 15, 2018.
  2. Lam MB, Figueroa JF, Zheng J, Orav EJ, Jha AK. Spending among patients with cancer in the first 2 years of accountable care organization participation. J Clin Oncol. 2018;36(29):2955-2960. doi: 10.1200/JCO.18.00270.
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