Payment Reform Pilot Updates at the COA Payer Summit

Published on: 

Payer—provider teams presented updates on their cost-saving pilot projects and looked to the future of these models in oncology care.

An ageing population, technological innovation, increased awareness resulting in earlier screening, and improved treatment regimens that have made cancer a chronic disease in some cases—all of these factors together lend a significant contribution to the growing cost of oncology care. In an attempt to curb this increasing financial burden on the US healthcare system, several payment reform pilots are being evaluated by payers in collaboration with their clinical care partners. At the third Payer Summit hosted by the Community Oncology Alliance (COA), payers and providers took to the stage to provide a progress report and discuss some of the challenges and lessons learnt along the way.

The first case study was presented by Michael Kolodziej, MD, national medical director, Oncology Solutions, Aetna; and Russell Hoverman, MD, vice president, Quality Programs, Texas Oncology. They provided an update on the clinical pathways program pilot at Texas Oncology. Kolodziej said that he had played a significant role in developing the pathways program while he was still with US Oncology, to evaluate its impact on cost of care. “We were successfully able to show that pathways can reduce cost while maintaining the quality of care,” he said. After joining Aetna, “We convinced Texas Oncology to let us try the pathway in the Medicare Advantage program (MA). The Aetna TRS MA Innovent Oncology Program has yielded about $4180 savings per patient in the first year, Kolodziej said, with total savings of $765,000 among 183 members. “The second year savings are even better,” added Kolodziej.

The pathways program is still a product in evolution, according to Hoverman. When we tied income to pathways performance, we saw a tremendous improvement in performance. In his opinion, pathways and guidelines, tiered drug fee schedule, care management and patient support services, advance care planning, and payment structure, all contribute toward bending the cost curve while helping deliver quality cancer care. Support tools such as “Clear Value Plus have tremendously improved data compliance, which has in turn improved pathway performance,” Hoverman told the audience.

Pointing out that being responsible for the total cost of care is a whole new arena, Hoverman thinks that hospital-generated can be pooled with the data generated in smaller physician practices for improved progress. “The cost of drugs and cost of care means we have to change,” he said.

The next pilot program introduced was UnitedHealthcare’s episode payment program that was piloted at 5 medical groups, including Northwest Georgia Oncology Centers. Lee Newcomer, MD, MHA, senior vice president at United Healthcare, explained that the episode model was rooted in rewarding performance and cutting back dependency on drug volume and sales.

A gain sharing model, the participating clinics registered all patients with breast, colon, and lung cancer and provided clinical data to the payer. A single episode payment was made at the initial visit and drugs were reimbursed at the average sales price rate. All physician services continued to be reimbursed as fee-for-service (FFS). “Episode payments remained unchanged with drug changes,” Newcomer explained.


Measurement of annual performance found that the episode payment model resulted in a tremendous cost savings. Newcomer then showed data that has now been published in the Journal of Oncology Practice, that while the FFS cost for the 810 patients from the 5 practices was expected to be $98,121,388, the actual cost was only $64,760,116; a huge saving of $33,361,272 in total medical costs.

However, drug costs increased said Newcomer, from $7,519,504, to $20,979,417 during the period of data collection between October 2009 and December 2012.

“The program has since expanded; Texas Oncology started in January. We now have a third wave of practices joining in, but we have frozen participation right now. Since the first wave of pilots was so successful, we need to see them duplicated before we move forward.”

“We are very encouraged by this project that there are opportunities for savings,” said Newcomer. “No matter the approach, community oncologists have the opportunity to be rewarded for the value they bring.”

According to Scott Parker, executive director of Northwest Georgia Oncology Centers, the essential requirements of a successful reform pilot are a cohesive practice group, strong analytics capacity (either in-house or outsourced), strong reimbursement and strong clinical manger, strong treatment planning approval procedure, and an active collaboration with and customer service for patients. “From our standpoint, these key components—though obvious and simple in concept—are critical to develop an innovative payment model,” said Parker.

Another pilot program that was discussed was the COME HOME project that has been the brainchild of Barbara McAneny, MD, who leads New Mexico Oncology Hematology Consultants, among many other hats that she wears.

Steve D’Amato, BSPharm, BCOP, executive director of New England Cancer Specialists, shared the adaptation of the COME HOME project in their practice. “It transformed and positioned us for the future,” D’Amato said, adding that it required commitment, buy-in, and a lot of energy.

In his experience, COME HOME requires a triage system, and urgent care was a major component of it. It was key, he said. “Clinicians participating in the COME HOME program have their own set of pathways—that’s another essential component. At our clinic, we also extended our daily clinic hours and began operating even on weekends—which was quite essential,” D’Amato said. He explained that while it did not directly impact cost “patient satisfaction was through the roof.” This helped our patients bypass visits to the emergency department (ED), which is an overall cost saving to the healthcare system.

“COME HOME also positioned us for the Oncology Care Model (OCM). The infrastructure costs though are real to run this project. To transform the clinic into an OCM was huge, but COA and Barbara provided us with tremendous support,” D’Amato indicated.

“When we started COME HOME, we were only thinking of patients and doctors. Most of my patient population is poor. So the point was to keep them out of the ED and from being admitted to a hospital. The triage pathways that we created solidified what we were doing. We had to educate our patients and ask them to call us first rather than 911. This took a lot of educating our practice staff on how to handle these patients and them to teach patients to call us rather than ED,” McAneny said.

She explained that the complexities of the healthcare system should be the least of a sick patient’s worries, so “we took care of navigating the healthcare conundrum for the patients.”

She acknowledged that working with the COA and the Commission on Cancer for the accreditation worked very well for the project. “We have seen significant impact on total cost of care, reduced the number of days of hospitalization.” At the end of the day, McAneny wants to see a restructuring of payments “so physicians have the flexibility to do what they want to do while keeping patients happy with the quality of care they get.”