Oncology Care Model: 2-Sided Financial Risk


Bruce Feinberg, DO: All right, Kavita. I’m going to go 1 more time. Tell me about 1-sided risk versus 2-sided risk. If the practices involved are going to be facing 2-sided risk, were they not already in 1-sided risk? And where is the risk in 1-sided risk?

Kavita K. Patel, MD, MS: Right now, just to make sure everyone understands what 1-sided versus 2-sided risk is, everyone in the model up front is in an upside only, meaning nobody has to “pay the government back” if they actually spend more than what the CMS [Centers for Medicare and Medicaid Services] thought that they “should be spending” on total cost of care in cancer. That’s kind of the upside and downside or what 2-sided risk is. As of this year, if you have not made, in any of the performance periods… You don’t have to have saved money all throughout the first 2 years. You just have to have saved money during the 1 particular period of time in the 2 years, and then you can still stay in the upside risk for the entire model.

Bruce Feinberg, DO: Why is it risk if it’s upside? Risk is not upside.

Kavita K. Patel, MD, MS: You’re right, but with the volume of patients on Medicare who have cancer, I don’t think it’s actually fair to tell these practices, from the get-go, that you have to take downside financial risk. This is the first time any physicians have received any data about their performance. And I’ll remind you that most oncologists like to think they are the masters of all care when a patient has cancer. Patients with cancer also have depression, diabetes, heart failure, and all these other problems that they happen to go see a bunch of other doctors for. But this is a total-cost-of-care model, all those costs inclusive. So I actually don’t think it would have been fair to give people true financial risk the way an actuary or an insurance company would think about risk, to be perfectly honest.

Bruce Feinberg, DO: Oh, I totally agree, but it’s just not the way I understood everything that was coming out of CMS 3 years ago to be reading.

Ted Okon, MBA: Well, let me just add, I say the practices have gone at risk regardless, because they’ve had to make these investments in people, infrastructure, systems, and things like that. They’re looking and saying, “Well, what happens if this goes away? What do I do? Do I fire people? I mean, what exactly happens? What do I do with the systems?” There’s the risk that even though they weren’t going to be at risk, as Kavita talked about, in terms of it was only a 1-sided risk. There are practices now that are not only facing that, what happens, but they’re facing that they either have to drop out of this or have to assume 2-sided risk. What’s interesting is if you haven’t done positively, and 1 of these are what we call performed in the black in 1 of these 3 performance periods, and you basically have to go at risk, that’s crazy. It’s like going to the casino, rolling the dice, and putting your practice on the line. Those practices, those facilities, are in the worst position, I should say, in terms of assuming 2-sided risk.

Bruce Feinberg, DO: Right. So, they would not go forward.

Ted Okon, MBA: They would not go forward.

Kavita K. Patel, MD, MS: You would drop out of the model if you were. That’s exactly the conversation. About a little over a third of the practices, maybe a little more, have saved money or would be able to stay in the 1-sided risk, which means that about half or a little more than half of these Oncology Care Model [OCM] practices are going to be asked to go into 2-sided risk. To Ted’s point, these are the very people who actually can’t do it. By the way, just to go to what the other Medicare models have done, this is exactly why the ACOs [accountable care organizations] now have this in-between concept. They have what’s called Track 1.5 because it’s the exact same thing that happened in primary care, Bruce. There were not enough takers to go to full financial risk in primary care, so they had to create an in-between. That’s kind of what we’re seeing in oncology.

Bruce Feinberg, DO: Despite the fact that many practices may drop out, I think many were surprised by the number that chose to participate or at least the size, scale, and scope. We had 196 practices, but there weren’t 196 doctors. It represented close to 50% of the Medicare population under treatment.

Ted Okon, MBA: There were over double that number that actually submitted LOIs [letters of intent] that said we were interested. What was interesting is that it got down to 200, in the low 200s. Then you had some who dropped out. It’s roughly around 190 or so. But it’s a fairly big population. When you talk about certain practices, like Florida Cancer Specialists, I think they have 9% of all the patients, actually. So you have a big contingent of Medicare patients who are in the OCM.

Kavita K. Patel, MD, MS: And academic institutions.

Bruce Feinberg, DO: Right, and insurance.

Kavita K. Patel, MD, MS: And insurers, right.

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