Practice Management Strategies for a New Age: Oncology Resource Networks

Recent estimates have put the cost of cancer care at an excess of $100 billion annually, much of which is borne by government payers, including Medicare, Medicaid, and TRICARE for outpatient treatments, including chemotherapy, its administration, and radiation therapy.

The Affordable Care Act (ACA) provided in part for the creation of accountable care organizations (ACOs) and has encouraged the concept of medical homes. Throughout the United States, payers and physicians have been working on developing creative payment strategies that recognize quality care and value, while reducing cost.

One particular organization—Oncology Resource Networks—has worked diligently to build clinically integrated oncology networks for the purpose of implementing a comprehensive oncology practice management strategy. This strategy has been designed to address the cost of cancer care, while improving treatment quality and health outcomes. Equipping physicians with the electronic infrastructure and up-to-date evidencebased pathways needed to deliver cost-effective, evidence-based care is one of the aims of this organization. In addition, programs are made available to practices that enable physicians to deliver state-of-the-art care, while also assisting patients and their families at the end of life.

Practice Tools

Moving beyond data and infrastructure, Oncology Resource Networks has worked with providers to implement financial incentives that put these tools into practice in an expeditious manner. These tools include assisting practices to network in a procompetitive manner with other physicians for the purpose of implementing pay-for-performance programs, shared-savings models, quality initiatives, rational fee schedules, and bundled payment models. These approaches enhance practice value from the perspective of health plans and payers and have helped practices that have an interest in differentiating themselves in this increasingly challenging marketplace. The goals of such an approach include sustaining community oncology practices, as well as assisting hospital-based and academic practices that are facing many of the same challenges as community practices.

Clinical Integration

Oncology Resource Networks’ core benefit for community practices is its representation with employers and health plans. The hallmark of clinical integration, which is the basis for the concept of ACOs, allows practices to invest both financial and human capital to improve patient care. Oncology Resource Networks has created a patient-centric approach by embracing a model that addresses patient care in a prospective manner. This was done through the adoption of a web-based decision support tool that ensures evidence-based care at the point of care. This decision support tool helps physicians to take advantage of new diagnostic tools to include molecular and companion diagnostics and, in the near future, next-generation sequencing. This approach allows physicians to deliver targeted, personalized care and provides costeffective benefits to patients.


The development of pathways that are based on nationally accepted treatment guidelines has been designed by oncologists to improve practice profitability and yet reduce the cost of cancer treatment. The development of pathways that incentivize cost-effective approaches to care and the creation of pay-forperformance programs with payers have been designed to reduce the inefficiencies associated with the reimbursement process. The webbased decision support tool made available to Oncology Resource Networks’ member practices obviates the need for the more inefficient and time-consuming paper-driven prior ap proval and preauthorization programs, while avoiding practices that increase payment delays and bad debt.

Oncology Resource Networks’ evidence-based practice pathways are designed to incentivize physicians to utilize protocols and pathways that provide cost-effective treatment options. The program is designed to foster interdependence among physician participants through the use of incentives that reward physicians and practices that adhere to evidence-based practice guidelines that re duce cost. Physicians are rewarded for the financial investments of “human capital” that are necessary to build this approach to care coordination in an oncology medical home. The physician’s office staff is an integral component of the care coordination team, utilizing the technology tools that are provided by Oncology Resource Networks. The uniqueness of this program in the treatment of patients with cancer—the implementation of advanced illness programs and palliative care programs—and the incentives that have been created to utilize these programs, as well as the evidence-based guidelines, contribute to the network’s representation of practices with payers and health plans.


Oncology Resource Networks’ programs facilitate and ensure collaboration among physician members, thereby improving patients’ health and potentially reducing the cost of cancer treatment by creating a comprehensive care management approach that also increases the quality of care rendered to patients. The benefits to payers and patients in clude an integrated set of services that include a web-based technology system that monitors adherence to evidence-based practice guidelines and implements policies and procedures related to the program’s utilization management, case management, and disease management activities.

This program is designed to create substantial integration among its participants and is expected to create significant efficiencies, including improved quality of care and more cost-effective care. The network’s representation of its membership with payers results in greater coordination of care through the use of advanced illness programs that have been previously demonstrated to reduce hospital length of stay, emergency department visits, and hospital admissions, while also improving the quality of care that patients and their family members receive.


One of the hallmarks of Oncology Resource Networks’ commitment to patient care is testing these innovative approaches.

Physicians who participate in the network agree to use a web-based decision support tool, receive enhanced reimbursement for participation, have the opportunity to receive bonuses that result from the network’s shared-savings model, and participate in an oncology ACO. The reduction in costs related to hospitalization, radiation therapy, and other cancer-related treatment expenditures will be distributed between participating physicians and the health plan, employer, or the Centers for Medicare & Medicaid Services (CMS). This model of accountable care and clinical integration created by Oncology Resource Networks also encourages patients to participate in the treatment decision-making process. As part of the ACA, CMS has permitted Oncology Resource Networks to operate as an ACO and share with its practices the savings that are generated through programs that reduce the cost of cancer treatment in the Medicare population.

Recently, Oncology Resource Networks collaborated with a number of organizations, including the RAND Corporation, led by Mireille Jacobson, PhD, Deputy Director of Health Economics, Finance and Organization, for the purpose of funding opportunities. Jalpa Doshi, PhD, Director of Value-Based Insurance Design Initiatives at the Leonard Davis Institute’s Center for Health Incentives and Director of the Economic Evaluations Unit of the Center for Evidence-Based Practice at the University of Pennsylvania Health System, and Henry Glick, PhD, at the University of Pennsylvania also collaborated with the networks to provide ongoing outcomes analysis. Other collaborations include the Florida Agency for Health Care Administration on behalf of Florida Medicaid, Blue Cross Blue Shield of Florida, the Florida Health Care Coalition, CIGNA, EQ Health, Vital Decisions, and eviti.

New Ways to Incentivize Oncologists to Provide Cost-Effective Care

A number of pilot projects have been developed for the purpose of looking at innovative strategies to realign the financial incentives associated with treating patients with cancer. The concept of episodebased payments has been proposed intermittently over the past several decades and has received more prominence as a result of the ACA.

In a 2011 article published in Health Affairs, Peter Bach, MD, and colleagues discussed the idea of episode-based payments for cancer care and proposed a pilot for Medicare. More recently, the April 2012 issue of Health Affairs was dedicated to “Cancer Care: Value, Costs, and Quality.” Lee Newcomer, MD, of UnitedHealthcare, reviewed the historical context of the “buyand- bill” reimbursement model and discussed the potential for a bundled payment approach as an alternative strategy for reimbursement. This approach, which has been tested by UnitedHealthcare in a number of large practices, is clearly attractive to payers and to providers, who see it as a potential opportunity to reduce costs and improve margins.

However, many practices would be challenged by assessing the risks associated with providing patients with chemotherapy drugs, given the ever-changing treatments and the novel treatments that are constantly being made available to patients with cancer. Such an approach, which removes the drug cost from the treatment paradigm, potentially results in administrative and patient care challenges that can prevent it from becoming a scalable approach in today’s complex care system. In addition, applying this approach to a Medicare population is potentially problematic. The complexities of variable patient care settings, including academic medical centers, hospital- based practices, community oncology practices, and practices providing access to 340B drug pricing, can potentially further complicate this as a scalable approach to reimbursement.

Along with traditional forms of reimbursement and bundled payment approaches, there are a variety of methods that include rational reimbursement. In this scenario, physicians are incentivized to receive higher reimbursements for generic alternatives, where costeffective options are available, suggesting those as reasonable choices.

Oncology Resource Networks has pioneered this approach, as well as pay-for-performance strategies, in markets where a rational reimbursement strategy is a not an option for physicians or for health plans. Oncology Resource Networks has pioneered this approach, as well as pay-for-performance strategies, in markets where a rational reimbursement strategy is a not an option for physicians or for health plans.

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