The Future of Oncology Reimbursement

Gail Thompson

February 2015, Vol 5, No 1 - Cancer Center Business Summit


Changes in oncology payment and reimbursement as well as delivery models were reviewed recently by an expert panel at the Cancer Center Business Summit (CCBS). Providers, payers, industry representatives, and thought leaders were on hand to share their thoughts and experiences.

Moderated by Marc Samuels, JD, MPH, Chief Executive Officer, ADVI, the panel included Michael Kolodziej, MD, National Medical Director, Oncology Solutions, Aetna; Kavita Patel, MD, MS, Fellow and Managing Director, Engelberg Center for Health Care Reform, The Brookings Institution; Denise Pierce, President and Chief Executive Officer, DK Pierce & Associates; Larry Strieff, MD, Specialty Medical Director, Hill Physicians Medical Group; and Robin Zon, MD, FACP, FASCO, Michiana Hematology Oncology, and Chair, Clinical Practice Committee, American Society of Clinical Oncology (ASCO).

Dr Kolodziej shared with the audience that moving forward, transparency in care, pricing, utilization, and costs will be mandatory from all stakeholders: providers, payers, patients, and employers. While everything must be on the table for review in order to develop workable solutions, he noted that reform will not work unless physicians are holding the reins, so collaboration rather than conflict between payers and providers is essential. Aetna has explored several models for oncology, and has decided on the parameters of a model based upon the oncology medical home. This meets the company’s needs and expectations for transparency and quality, and should allow oncology practices to meet those deliverables as well.

Dr Patel explored alternative payment models under review by the Centers for Medicare & Medicaid Services (CMS). One of the models CMS is considering identifies patients with specific cancers and builds an episode-based payment on a per-month basis, plus another payment that is risk-adjusted for care coordination. When an episode is complete, quality measures will be reviewed with the potential for a bonus performance payment or a negative payment element for poor performance. CMS would like to include private payers in this implementation, but has not yet identified any collaborators. Some of the current challenges for this model include defining a cancer type, defining a finite period of time coverage, and other issues that have arisen with control of Medicare Part D, Part A, and Part B costs.

Employer perspectives on cancer management were presented by Ms Pierce, based upon qualitative and quantitative research completed recently with employers across the United States. Cancer has become one of the top 3 disease concerns for many employers, some of whom are starting to take action themselves, rather than to wait for a payment reform model. Ms Pierce discussed the efforts of employers that are exploring a solid tumor mapping program, the use of nurse navigators, value-based payment design, among other options to manage cancer treatment costs. In a specific example, she discussed collaborations between MD Anderson Cancer Center and Shell Oil Company through a voluntary program that offers cancer information and prevention services to Shell employees utilizing a case manager. She indicated that business coalitions are also starting to become more engaged not just in contracting for services, but in benefit design and analytics coordination.

The Hill Physicians Medical Group has built a bundled payment model for oncology patients in California. Dr Strieff described the utilization experience, the development of the case rate, and the necessary addition of stop-loss programs to financially protect the physicians. The group is monitoring quality by using ASCO’s Quality Oncology Practice Initiative program. To date, the model has led to performance improvements, increased satisfaction compared with a standard fee-for-service model, and improvements in cost.

Dr Zon outlined the details of Consolidated Payments for Oncology Care (CPOC), ASCO’s proposed payment reform model. This model would replace current codes with new codes that are billable for physician services for new patients, for each month of active treatment, for monitoring patients not in active treatment, for services related to transitions of care, and for additional payment adjustments related to utilization and performance on quality measures, adherence and use of certified pathways, resource utilization (oncology medical home, hospitalization, and emergency department admissions), and participation in clinical trials. The CPOC model is not yet tested; ASCO hopes to begin practice testing this year.

Presenters generally agreed that CMS will be a major driver of change for provider payments. It is likely that private payers will begin collaborating with CMS, increasing the rapidity of changes on oncology payments across a wide variety of markets. In addition, it is expected that drug costs will be targeted and probably removed as a driver of cancer treatment choices; rather, patient outcomes and allowable cost parameters will become targeted drivers of treatment choice. Several oncology payment reform models are under consideration by public and private entities, but none have been identified as primary solutions at this time. The consensus among presenters was that the current system is not sustainable, and private insurers and CMS have committed to change.

In addition, employers were mentioned as a rising catalyst—rather than a passive participant—in the oncology payment and management reform arena. Escalating prices for insurance premiums are pushing small to medium employers to turn to exchange plans for employee health insurance benefits, a move that has far-reaching implications for coverage and access.

Despite the variety of pilots and proposed models, the panel emphasized that the future of oncology reimbursement is a work in progress, and one clear solution is yet to emerge.