August 2015 Vol 8, Special Issue: Payers' Perspectives in Oncology - Payment Reform
Wayne Kuznar

Payment reform that is centered around the patient by aligning payments to oncology practices for all services performed is a “win-win-win” approach for physicians, patients, and payers, said Harold D. Miller, President and Chief Executive Officer of the Center for Healthcare Quality and Payment Reform, Pittsburgh, PA, at ASCO 2015.

Practices do not have the resources to be able to provide all the services required in the total care of a patient with cancer. “That to me is a win-lose approach,” said Mr Miller. “The payers want to win, and the physicians and the patients end up on the short end of the stick.”

At present, oncologists are paid for face-to-face visits, which is not an accurate reflection of the actual time spent on patient care. “They have to figure out what’s wrong with the patient, what the different treatment options are, talk to the patient about that…they need to educate the patient, they need to do counseling for the patient,” in addition to managing oral therapies, he said.

Furthermore, if a practice wants to be an oncology medical home and provide care management resources and 24/7 access, “they don’t get paid for that,” Mr Miller said. “After therapy ends, a lot of services continue to the patients, whether it’s for survivorship or end-of-life planning, seeing the patient on an ongoing basis, monitoring their disease, dealing with complications, and so on.”

The ASCO oncology practice benchmark shows that the fee-for­service structure only pays for approximately 66% of the costs that oncology practices incur. The remainder of the funds comes from drug margins. “Oncology practices couldn’t stay afloat today if it weren’t for the drug margins that they’re getting,” said Mr Miller.

A proposal by ASCO adds a $750 one-time payment for the new patient to cover ancillary services that are not being paid for at present. A $200 monthly care management payment is also proposed to provide support that patients require during the treatment process that is not covered by payments for office visits and infusion. Finally, smaller care management payments would be added for up to 6 months after the end of treatment, and for patients in clinical trials, $100 extra monthly would be paid to cover administrative costs.

“We’ve estimated that what that adds up to is about $2100 on average per patient more beyond fee for service,” Mr Miller said. “That would be a 50% increase in what practices are getting today over their evaluation and management services visit payments and their infusion payments.”

The 50% increase in payment to oncology practices would represent only a 2.5% increase in total spending on a patient with cancer. Therefore, reducing “other” spending (ie, hospital care, drug costs, and other services) by this amount would be needed to cover the extra cost, and reducing other spending by only 7% would achieve the goal of the Centers for Medicare & Medicaid Services (CMS) to reduce oncology spending by 4%.

The avoidance of emergency department visits and hospital admissions through more comprehensive care would help reach the CMS goal, said Mr Miller, as it would avoid the unnecessary use of testing and imaging (as in the ASCO Choosing Wisely guidelines), as well as a reduction in the use of supportive drugs.

Substituting lower-cost chemotherapy for higher-cost drugs and instituting appropriate end-of-life care could achieve even more savings.

As more oncology payment reform models are discussed, Mr Miller encourages their evaluation in 3 categories:

  1. Do they provide significant and predictable resources for oncology practices to deliver high-value care?
  2. Do the payments match the costs by the phase and type of care that oncology practices deliver?
  3. Is the payment tied to appropriate use?

Mr Miller argued that the pay-for-performance model does not meet these goals, because it does not provide predictable resources and does not provide it in the places that oncology practices need. Shared-savings models fail on all 3 counts, he said.

“The closest that I’ve seen to actually meeting these criteria is what Anthem has done in its Cancer Care Quality Program, because it provides significant and predictable resources and it ties them to appropriate use, but it still focuses mostly on the treatment process,” said Mr Miller.

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Last modified: September 14, 2015
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