Oncology Reimbursement Reform Leaves Stakeholders With More Questions Than Answers

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During the American Society of Clinical Oncology’s Annual Meeting which took place May 31-June 4, 2019 in Chicago, Illinois, oncologists and representatives from UnitedHealthcare and the Center for Medicare and Medicaid Innovation (CMMI) took the stage to discuss oncology reimbursement reform and whether there are changes on the horizon for the promotion of higher value care.

During the American Society of Clinical Oncology’s Annual Meeting, which took place May 31-June 4, 2019 in Chicago, Illinois, oncologists and representatives from UnitedHealthcare and the Center for Medicare and Medicaid Innovation (CMMI) took the stage to discuss oncology reimbursement reform and whether there are changes on the horizon for the promotion of higher value care.

Jennifer Malin, MD, PhD, FASCO, senior medical director of oncology and genetics at UnitedHealthcare, started off the session by explaining what oncologists and patients alike already know: healthcare costs are unsustainable.

“When we talk about the cost in healthcare, oftentimes we focus on just the pricing of the drugs and what individual out-of-pocket costs are. But the overall impact on the total cost of care is what impacts people’s premiums and what the federal or state government has to pay for Medicaid. That impacts the overall affordability for people to buy insurance in the first place,” said Malin.

She then went over some strategies oncologists are all too familiar with that payers use to improve the value in cancer therapy, such as clinical pathways, episode payment shared savings, bundled payments, and shared risk capitation.

UnitedHealthcare utilized each of these strategies in creating their own cancer episode program. The program, first implemented by Malin’s predecessor Lee Newcomer, underwent a proof of concept pilot study from 2009-2012. Afterwards, results were released showing that the program had a 34% reduction in costs for the 5 practices that were enrolled.

“Our cancer episode program is a new payment model based on the treatment of cancer episodes instead of drug margins. The program removes an oncology practice’s dependency on drug margins, and rewards physicians for improved quality and reduction in the total cost of cancer treatment. It also builds a learning system to identify best practices for improved quality and value,” she said.


After the results of the initial pilot, UnitedHealthcare rolled the program out to 250 practice sites. Due to the larger number of practices enrolled, collaboration between UnitedHealthcare and the practices went from monthly interactions in the pilot to less often. This, in part, contributed to the lower amount of savings—13%—seen in once the program expanded to more groups.

In talking about the revolution towards value-based care, what is often discussed are the faults with traditional fee-for-service (FFS) programs. Karen Hoffman, MD, MPH, of MD Anderson Cancer Center, presented provocative data regarding practices that use FFS, costing more money and more often referring their patients for more expensive treatments.

“In a model where physicians and healthcare providers are reimbursed for each for each service rendered, it may provide financial incentives to increase utilization of services or recommend services that are more expensive,” said Hoffman.

She explained that while physicians are prohibited by national statute for referring Medicare patients for designated health services at entities with which they have a financial relationship, studies have shown that there’s an increased utilization of services by physician “owners” versus non owners.

“Specifically, the data show that there is an increase in anatomic pathology services by self-referring providers. In 2010, it was estimated that self-referring providers made 918,000 more referrals for pathology, which ended up costing Medicare $69 million,” she said.

Finally, Lara Strawbridge, MPH, of CMMI, presented about an effort to address costs that oncologists are quite familiar with: the Oncology Care Model (OCM).

The OCM, which was implemented in 2016 as a 5-year model, is an episode-based payment model that targets chemotherapy and related care during a 6-month period that begins with a patient’s receipt of chemotherapy.

“The OCM has 176 practices, about 7000 practitioners, sees 200,000 unqiue beneficiaries per year, with 260,000 episodes of care per year,” said Strawbridge.

She provided an overview of some of the positive outcomes of the program, including an anecdotal story from a provider saying that “[the OCM] enables us to provide the care we’ve always wanted to do.” However, as the program nears the end of its 5-year pilot phase and CMMI looks to implement changes for the next version of the program, what spoke louder in Strawbridge’s presentation were the questions that went unanswered.

The OCM has generated a lot of actionable, valuable data for practices, although this has come at a cost of a high administrative reporting burden. Strawbridge didn’t mention those reporting burdens when discussing the challenges the OCM has seen over the past few years, What was mentioned, such as the limitations of the Medicare claims system and the complexity of practice business and coding models, are multifaceted questions that may not be addressed by the next rendition of the program.

For example, in a recent meeting of the Institute for Value-Based Medicine, Jessica Waldradt, manager of Managed Mare of Government Programs, Value-Based Care at Northwestern Memorial Healthcare, explained that there’s a lot of confusion around how episodes are triggered with the OCM due to an episode starting at the receipt of chemotherapy. This is because patients could be administered chemotherapy as a maintenance therapy as well as an active treatment, and due to this, Waldradt said her institution is at times unsure which patients are even meant to be included in the OCM.

This too, was not mentioned by Strawbridge.

In terms of the future of the OCM, much remains unclear as of yet.

Strawbridge said that, “We’re working on the next version of the model to include further improvement in quality of care and health outcomes, moving further away from fee-for-service infrastructure for payments, considering chemotherapy and supportive care, and looking into the adoption of two-sided risk.”