The Changing World of Oncology Reimbursement, Are You Ready?

The expenses associated with cancer care in the United States are staggering and only expected to climb.

The expenses associated with cancer care in the United States are staggering and only expected to climb. In 2010, the total cost was $125 billion. By 2020, with more individuals living with cancer as a chronic disease, costs are expected to grow by 36% and exceed $170 billion. Faced with escalating costs, the government, payors, and providers are engaging in various activities to test different reimbursement methodologies for cancer care.

But full transition to value-based payments in oncology will continue to be an evolution, not a revolution — and collaboration is key. The aim is to shift the economics from a fee-for-service environment (buy and bill) to one that reimburses for quality, efficiency, and a lower cost of care. Typically, we see payors and providers collaborating on the following types of value-based reimbursement models:

  • Pay for Performance — Performance-based payment related to the oncologists’ compliance with select clinical pathways and proven guidelines.
  • Oncology Patient-Centered Medical Home — Coordination payments for care management across a spectrum of clinical and supportive services.
  • Commercial Payor Shared Savings Projects — Targeted ED visit and hospital utilization cost reductions through adherence to clinical pathways and guidelines, with savings from reduced utilization and improved care management shared with the oncologists.

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Source: EGG Management Consultants