This Week in Managed Care: June 5, 2020

This week, the top managed care news included Oncology Care Model timelines being extended due to COVID-19; shifting racial disparities in avoidable hospitalizations; nonprofit hospitals did not direct Medicaid expansion savings into communities.

Oncology Care Model, other alternative payment models’ timelines extended due to COVID-19, racial disparities shift in observation status in hospital admissions for avoidable conditions, and a study finds nonprofit hospitals did not direct Medicaid expansion savings into communities.

Welcome to This Week in Managed Care, I’m Matthew Gavidia.

OCM, Other APM Timelines Extended Due to COVID-19

This week, the Center for Medicare and Medicaid Innovation extended the Oncology Care Model, or OCM, for a year and granted flexibility for timelines on other alternative payment models due to the havoc created by COVID-19.

The yearlong extension of the OCM is newsworthy for what will apparently not happen. CMMI unveiled a possible successor plan, Oncology Care First, or OCF, that was set to take effect January 1, 2021. OCM will extend for a year through June 2022. The announcement does not mention the OCF, and reports changes to financial modeling that include:

  • An option for OCM practices to forgo upside and downside risk for performance periods affected by the pandemic, defined in the document as the public health emergency.
  • For practices that stay in 1- or 2-sided risk during performance periods affected by the pandemic, any episodes of care affected by COVID-19 can be removed from reconciliation for those periods.

The adjustments also cover several high-profile alternative payment models, and vary from no change to the Bundled Payment for Care Improvement Advanced program, to the decision to extend year 5 of the Comprehensive Care for Joint Replacement program through March 2021.

CMS Administrator Seema Verma announced the update in a blog post in Health Affairs, saying that while health care transformation has made great strides, “when it comes to a pandemic of the proportion we’re now experiencing, as part of ensuring that value-based payments are sustainable, the models must be adjustable to address the uniqueness of the current situation.”

For more, visit

Racial Disparities Shift in Observation Status in Hospital Admissions for Avoidable Conditions

Being admitted to a hospital for something that might have been avoided is sometimes used as a marker for the presence of quality primary care in a patient’s life. Compared with whites, racial and ethnic minorities have much higher rates of potentially avoidable hospitalizations. And blacks are less likely than whites to have a source of usual primary care.

A study released this week used national Medicare data to try and understand disparities between black and white patients in avoidable hospitalizations for ambulatory care—sensitive conditions.

Writing in the June issue of Health Affairs, the researchers found that upon first look, it did appear that the gap between black and white patients had begun to narrow. However, further analysis showed that black patients were being coded as admitted under observation status at a higher rate over time than white patients.

While avoidable hospitalizations due chronic conditions that respond to outpatient care decreased, there was an increase in the gap of avoidable observation stays. The authors said that suggests that circumstances in ambulatory care settings did not change. Rather, it seems that an increase in switches to observation status appeared to be creating a reduction in racial disparities in avoidable hospitalizations.

The researchers noted that it is unknown why black Medicare beneficiaries were more likely to be switched to observation status, but the change has a negative financial impact on these patients.

For more, visit

Study Finds Nonprofit Hospitals Did Not Direct Medicaid Expansion Savings Into Communities

According to a study published in JAMA Network Open, Medicaid expansion was associated with a decrease in nonprofit hospitals’ burden of providing uncompensated care. However, hospitals did not redirect this financial relief toward spending on additional community benefits.

Initially, Medicaid expansion was expected to alleviate some nonprofit hospitals’ financial stress, as it would provide revenue via Medicaid reimbursements from patients previously receiving uncompensated care. But to maintain their tax-exempt status, nonprofit hospitals have to demonstrate they engage with communities by providing benefits and improving overall health.

In a cohort study, researchers used a difference-in-differences analysis to determine if Medicaid expansion was associated with changes in nonprofit hospital spending on community benefits.

Using hospital characteristics collected from the American Hospital Association, the researchers found direct community expenditures remained more stable in small, nonurban hospitals compared with large and urban hospitals. However, large, urban hospitals experienced the greatest net gains from expansion.

The researchers hypothesize one reason for the decline in community-directed spending in the current study “may be that sophisticated hospitals capitalized on the influx of Medicaid patients—and the gap between Medicaid reimbursements and hospital charges—to enhance the appearance of total community benefit spending.”

“Clearer, enforceable requirements for community-directed benefit spending alongside stronger financial incentives for population health through, [for example], alternative payment models, might increase nonprofit hospitals’ direct investments in their communities,” the researchers conclude.

For more, visit

ASCO 2020 Meeting Coverage

This past week, the American Society of Clinical Oncology, or ASCO, presented its 2020 annual meeting in a virtual format. provided full coverage of the virtual meeting, which took place May 29th to the 31st.

Highlights included:

  • An exclusive interview with Dr Melissa Johnson on the CITYSCAPE trial
  • Outgoing ASCO president Dr Howard A. “Skip” Burris notes in his opening address the importance of patient involvement to accelerate progress in oncology
  • Access to quality cancer care improves survival under the ACA

For full conference coverage, visit

Paper of the Week

And, now our paper of the week, which looks back at some of the most important papers over the past 25 years of The American Journal of Managed Care® and why they matter today.

As the Oncology Care Model and other alternative payment models are extended amid the COVID-19 pandemic, this week’s 2018 paper provided an overview of alternative payment models and how leading national organizations are involved with linking quality improvement initiatives and payment reform.

Researchers highlight that as quality linked to payment reform has gained momentum and is being mandated at the national level, it is imperative to rapidly implement more real-world applications of quality initiatives linked to oncology-specific alternative payment models and the educational framework needed to support them.

For the paper, visit

For all of us at AJMC®, I’m Matthew Gavidia.

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