ASCO’s New Patient-Centered Oncology Payment Model

Meg Barbor, MPH

June 2017, Vol 7, No 6 - Reimbursement


Orlando, FL—The American Society of Clinical Oncology (ASCO) has developed a proposal for an Alternative Payment Model that is focused on delivering value in oncology and supporting higher-quality and more affordable cancer care. Dan Zuckerman, MD, Executive Medical Director, St. Luke’s Mountain States Tumor Institute, and Past Chair, ASCO’s Clinical Practice Committee, discussed the details of the new Patient-Centered Oncology Payment model at ASCO’s first Oncology Practice Conference in March 2017.

“This idea came about in 2013 when a group of physicians discussed what we thought provided value in cancer care, the ways we thought we should be paid, how to incentivize physicians so that we’re paying attention to cost and affecting it to the degree that we can, and valuing ourselves and the fact that we do difficult cognitive and ancillary work on behalf of our patients and their families and don’t get reimbursed for it,” said Dr Zuckerman.

The New Oncology Payment Model

The Patient-Centered Oncology Payment model is designed around a cancer treatment episode of care, using a defined period of active therapy and 6 months of follow-up after therapy. The data used to create the model came from the Centers for Medicare & Medicaid Services (CMS) Medicare Part A and Part B claims data from 2012, the 2012 Maine All Payer Claims Database, and published results from the Oncology Medical Home model.

The majority of oncology spending does not go to the oncology practice, said Dr Zuckerman. More than 90% of spending pays for drugs, laboratory tests, imaging studies, surgical procedures, emergency department visits, and hospitalizations. By contrast, fees for oncology practice services represent less than 10% of spending for patients with cancer during episodes of chemotherapy treatment.

However, certain costs can be influenced by specific situations, he said. For example, although a few expensive drugs drive the majority of oncology drug spending, the appropriate use of these drugs can lead to significant savings. In addition, imaging costs add up, and most of these costs are derived from a few types of imaging studies in oncology.

Furthermore, more than 25% of hospital admissions for patients with breast, colon, or lung cancer in 2012 were attributed to complications of treatment; therefore, considerable reductions in avoidable hospitalizations are possible and can reduce costs. The average spending per Medicare beneficiary with breast, colon, or lung cancer exceeds $45,000 during treatment and 2 months after treatment, but with the proposed new payment model, Dr Zuckerman estimates a 9% reduction of $4000 per patient.

Aimed at transitioning away from the fee-for-service model, ASCO’s new Patient-Centered Oncology Payment model is designed in a tiered-based fashion and will:

  1. Add new codes to existing evaluation and management (E&M) codes to cover the cost of service;
  2. Replace E&M codes with monthly payment codes that provide flexibility in how care is delivered;
  3. Eventually graduate to using bundled monthly payments that will include oncology practice costs and other costs, such as tests, hospitalizations, and/or drugs.

“This is the holy grail—being able to do bundles—or actually take on total risk,” he said. This new payment model calls for accountability in all 3 areas, but for things that oncologists can control.

“The concept is that you’re basically asking for more money, an infusion of cash into the practice. This calls for a care management fee on top of your E&M so that you can receive payment for services delivered by nonphysicians and for non–face-to-face services, and reduce ER [emergency department] admissions and potentially avoidable testing,” Dr Zuckerman said.

New Payments for Oncology Practices

The Patient-Centered Oncology Payment model proposes an additional $750 one-time payment for a practice for a new patient, taking into account the multidisciplinary care, consultation, and cognitive tasks that go into seeing a new patient and are not currently reflected in the E&M codes.

Practices would also get a $200 monthly care management payment during treatment months, and $50 care management payments during active monitoring months, for up to 6 months after the end of treatment, to deal with survivorship and potential midterm complications; this adds up to approximately an additional $2000 per patient for the practice.

With the implementation of the Patient-Centered Oncology Payment model, the savings to payers will more than offset the new payments to the practice, he added. An illustrative analysis showed large potential net savings, with a 5% to 7% reduction in spending on drugs and tests and a 30% reduction in emergency department visits and hospital admissions, leading to a 4% reduction in total spending, he reported.

“We’re asking for more payment, so we do have to hold ourselves accountable,” said Dr Zuckerman. A series of quality measures from the Quality Oncology Practice Initiative is used as part of the model, and practices are not permitted to fall below a certain quality level.

The Patient-Centered Oncology Payment model also takes into account appropriate use criteria, so areas with high rates of adherence yield higher payments; that is, a bonus is awarded if emergency department or hospital admissions rates are better than the set target.

Dr Zuckerman urged institutions to gather their data, define payment amounts, and better understand their unpaid services before approaching payers. He and his colleagues examined the costs that could potentially affect their own center, and found $2.4 million for services such as chaplains, navigators, phone triage, nutrition, and patient and family advocates in 2014. “We do a lot of work to keep our patients out of the hospital, but none of this is reimbursed,” he said.

ASCO is working closely with CMS and the Physician-Focused Payment Model Technical Advisory Committee on this model, with the aim of getting the Patient-Centered Oncology Payment model deemed as an advanced oncology-based Alternative Payment Model.