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CMS Innovation Center Releases Oncology Demo

On February 12, 2015, the Center for Medicare and Medicaid Innovation (Innovation Center) announced a new multi-payer payment and care delivery model to support better care coordination for cancer care. The model is primarily focused on physician practices in Medicare that provide chemotherapy, though other treatment modalities can be included. Beneficiaries who are in Medicare fee-for-service and being treated with chemotherapy in a participating practice for any major cancer (roughly 90%) will be included.

The practice will be responsible for total cost of care of the patients in the model, i.e., Part A and B services as well as oncology-related Part D expenditures. The new Oncology Care Model will include 24-hour access to practitioners for beneficiaries undergoing treatment with an emphasis on coordinated, person-centered care, aimed at rewarding value of care, rather than volume.

Physician group practices and solo practitioners that provide chemotherapy for cancer and are currently enrolled in Medicare may apply to participate. In addition, “other payers,”  including commercial insurers, Medicare Advantage plans, state programs, and Medicaid managed care plans, are also encouraged to apply. CMS notes in the request for applications (RFA) that it will look more favorably on applications from practices that show collaboration with other payers. In addition, CMS will look to markets where one or more payers have expressed interest, by having filed a Letter of Intent by April 9, 2015, and then promote collaboration between practices and payers in those markets.  Payers will be expected to employ the same two-part payment model as CMS, but will have more flexibility on other model parameters, such as benchmarking. 

This initiative has been under development for more than two years. CMS had considered a bundled payment system, but deferred on that approach after hearing from stakeholders about the financial risks associated with high cost chemotherapy drugs. While the cost of chemotherapy drugs—both Part B administered and Part D—are a major driver in cancer care costs, the model makes no changes in the current ASP+6, nor Part D. And, participating practices continue to be paid for services under the current FFS payment rules.

However, in order to help reduce total cost of care, such as  unnecessary hospitalizations and emergency department visits, participating practices will receive a monthly care management payment of $160 for each Medicare fee-for-service beneficiary cared for during a six month episode of care to support comprehensive, coordinated patient care. To promote broader oncology practice transformation—delivery of quality care and lower costs—practices will be eligible for performance-based payments.  Unlike other Innovation Center initiatives, participating in an ACO or other shared savings programs, is not a bar to participation in the OCM—with the exception of the Transforming Clinical Practices Initiative (TCPI).

As with other CMS “shared savings” models, CMS will establish benchmark targets, based on prior claims history of “assigned” beneficiaries, and adjust for geographic and other factors, before applying a 4% discount. In addition, CMS will apply a risk adjustment factor, which may be modified over the course of the 5 year model, as additional data is available. For the first two years of the model, practices will be under a one-sided model, in which they will be eligible for bonus payments, but not liable for losses. Beginning in year 3, practices will be eligible for a two-sided risk, under a lower 2.75% discount target, but also liable for losses. Practices will report, on a set of quality and process measures, which will also affect the amount of any performance bonus. In addition, practices will be expected to utilize an ONC certified electronic health record (EHR) and document care plans in accordance with the Institute of Medicine’s Care Management Plan and the National Cancer Institute’s Patient Navigation criteria.

Non-binding Letters of Intent for practices are due May 7, 2015. In each case, LoI’s will be posted on the CMS Innovation web-site so that payers and practices can identify potential partners in their respective markets..  Applications for both are due June 18, 2015. CMS expects to launch the model with 100 practices in the spring of 2016.  CMS expects to make some modifications to the RFA as they receive further stakeholder questions and input. Updates, along with copies of information on the OCM can be found here.

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