Ray D. Page

Changing Physician Incentives for Affordable, Quality Cancer Care: Results of an Episode Payment Model

PURPOSEnThis study tested the combination of an episode payment coupled with actionable use and quality data as an incentive to improve quality and reduce costs.nnnMETHODSnMedical oncologists were paid a single fee, in lieu of any drug margin, to treat their patients. Chemotherapy medications were reimbursed at the average sales price, a proxy for actual cost.nnnRESULTSnFive volunteer medical groups were compared with a large national payer registry of fee-for-service patients with cancer to examine the difference in cost before and after the initiation of the payment change. Between October 2009 and December 2012, the five groups treated 810 patients with breast, colon, and lung cancer using the episode payments. The registry-predicted fee-for-service cost of the episodes cohort was

American Society of Clinical Oncology Policy Statement on Clinical Pathways in Oncology

98,121,388, but the actual cost was

The Patient-Centered Medical Home in Oncology: From Concept to Reality

64,760,116. The predicted cost of chemotherapy drugs was

Payment for Oncolytics in the United States: A History of Buy and Bill and Proposals for Reform

7,519,504, but the actual cost was

A Pathway Through the Bundle Jungle

20,979,417. There was no difference between the groups on multiple quality measures.nnnCONCLUSIONnModifying the current fee-for-service payment system for cancer therapy with feedback data and financial incentives that reward outcomes and cost efficiency resulted in a significant total cost reduction. Eliminating existing financial chemotherapy drug incentives paradoxically increased the use of chemotherapy.

Impact on Oncology Practices of Including Drug Costs in Bundled Payments

The use of clinical pathways in oncology care is increasingly important to patients and oncology providers as a tool for enhancing both quality and value. However, with increasing adoption of pathways into oncology practice, concerns have been raised by ASCO members and other stakeholders. These include the process being used for pathway development, the administrative burdens on oncology practices of reporting on pathway adherence, and understanding the true impact of pathway use on patient health outcomes. To address these concerns, ASCOs Board of Directors established a Task Force on Clinical Pathways, charged with articulating a set of recommendations to improve the development of oncology pathways and processes, allowing the demonstration of pathway concordance in a manner that promotes evidence-based, high-value care respecting input from patients, payers, and providers. These recommendations have been approved and adopted by ASCOs Board of Directors on August 12, 2015, and are presented herein.

Financial Conflicts of Interest Among Oncology Clinical Pathway Vendors

In recent years, the cost of providing quality cancer care has been subject to an epic escalation causing concerns on the verge of a health care crisis. Innovative patient-management models in oncology based on patient-centered medical home (PCMH) principles, coupled with alternative payments to traditional fee for service (FFS), such as bundled and episodes payment are now showing evidence of effectiveness. These efforts have the potential to bend the cost curve while also improving quality of care and patient satisfaction. However, going forward with FFS alternatives, there are several performance-based payment options with an array of financial risks and rewards. Most novel payment options convey a greater financial risk and accountability on the provider. Therefore, the oncology medical home (OMH) can be a way to mitigate some financial risks by sharing savings with the payer through better global care of the patient, proactively preventing complications, emergency department (ED) visits, and hospitalizations. However, much of the medical home infrastructure that is required to reduced total costs of cancer care comes as an added expense to the provider. As best-of-practice quality standards are being elucidated and refined, we are now at a juncture where payers, providers, policymakers, and other stakeholders should work in concert to expand and implement the OMH framework into the variety of oncology practice environments to better equip them to assimilate into the new payment reform configurations of the future.

Reply to A. Small et al

The authors review and discuss the opportunities and challenges raised by policy options for Average Sales Price reform or replacement.

Oncology Pathways—Preventing a Good Idea From Going Bad

Bundled, or episode-based, payments are ingrained in the oncology reimbursement reform lexicon. Adopting these reimbursement policies in the outpatient oncology setting is appealing. Payers are able to reimburse defined, predictable payments for each patient for a set period of time, and providers have the freedom to practice medicine without being micromanaged by payers. Payers also benefit by moving away from existing policies that reward providers for doing and billing more. In other words, under these reform policies, revenue centers become cost centers for providers, upending the fee-for-service paradigm. A focus on bundled payment in outpatient oncology treatment is now of urgent concern with the announcement of the Center for Medicare and Medicaid Innovation’s oncology care model (OCM). The OCM incorporates bundled payment with a shared savings program based on spending for all care provided to patients with cancer upon the initiation of chemotherapy, inclusive of all chemotherapy and supportive care drugs (whether intravenous or oral), day surgeries, diagnostic tests, emergency department visits, and inpatient stays. However, implementing the OCM and other bundled payment policies in realworld practice has raised a multitude of questions.Foremostamongthemiswhether thebenefits of includingdrugs in the bundle for practices to manage outweigh the risks? Among key opinion leaders and policymakers, the inclusion of drugs in an outpatient oncology bundle seems a foregoneconclusion. Both the prices of these drugs and their use pose challenges to the system; launch prices for new, branded drugs are high and have grown on average 12% per year since 1995, outpacing spending growth on cancer care more generally and overall medical care. Overuse and misuse of these drugs also likely account for a nontrivial amount of spending levels and trends. Policymakers tout the benefits of including all drugs in bundled payment policy for the following reasons. First, physicians, rather than patients, are the ones who control demand because insurer coverage andpayment fornovel drugsused on and off label are virtually guaranteed because patients are generally well insured at the margin via Medigap policies and/or are covered by charity organizations. Second, practices generate substantial revenue from drugs covered under the insured patient’s medical benefits because of the buy and bill system. If oncologists are at financial risk for the drugs they choose to use to treat patients with cancer, then they will be more likely to choose the least costly regimens when efficacies are similar; this will mitigate spending growth and promote the use of generic and biosimilar drugs when available. Third, because oncologists will become more price sensitive under these payment policies, theywill seek out better prices for the drugs they use to treat patients through negotiationswithmanufacturers and other parties in the drug distribution chain.

American Society of Clinical Oncology Criteria for High-Quality Clinical Pathways in Oncology

INTRODUCTIONnThis analysis evaluates the impact of bundling drug costs into a hypothetic bundled payment.nnnMETHODSnAn economic model was created for patient vignettes from: advanced-stage III colon cancer and metastatic non-small-cell lung cancer. First quarter 2016 Medicare reimbursement rates were used to calculate the average fee-for-service (FFS) reimbursement for these vignettes. The probabilistic risk faced by practices was captured by the type of patients seen in practices and randomly assigned in a Monte Carlo simulation on the basis of the given distribution of patient types within each cancer. Simulations were replicated 1,000 times. The impact of bundled payments that include drug costs for various practice sizes and cancer types was quantified as the probability of incurring a loss at four magnitudes: any loss, > 10%, > 20%, or > 30%. A loss was defined as receiving revenue from the bundle that was less than what the practice would have received under FFS; the probability of loss was calculated on the basis of the number of times a practice reported a loss among the 1,000 simulations.nnnRESULTSnPractices that treat a substantial proportion of patients with complex disease compared with the average patient in the bundle would have revenue well below that expected from FFS. Practices that treat a disproportionate share of patients with less complex disease, as compared with the average patient in the bundle, would have revenue well above the revenue under FFS. Overall, bundled payments put practices at greater risk than FFS because their patient case mix could greatly skew financial performance.nnnCONCLUSIONnIncluding drug costs in a bundle is subject to the uncontrollable probabilistic risk of patient case mixes.