Managing Oncology Is Now a “Numbers Game”

November 2016, Vol 6, No 11
Dawn Holcombe, MBA, FACMPE, ACHE
President, DGH Consulting, South Windsor, CT

The Centers for Medicare & Medicaid Services (CMS) issued its “final” rule in mid-October for the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, and has permanently changed the face of cancer management for the rest of our lives.1

The MACRA rule amended title XVIII of the Social Security Act “to repeal the Medicare sustainable growth rate, to reauthorize the Children’s Health Insurance Program, and to strengthen Medicare access by improving physician and other clinician payments and making other improvements. This rule finalizes policies to improve physician and other clinician payments by changing the way Medicare incorporates quality measurement into payments and by developing new policies to address and incentivize participation in Alternative Payment Models (APMs). These unified policies to promote greater value within the healthcare system are referred to as the Quality Payment Program.”1 These opening sentences of MACRA are so simple, given the dramatic reimbursement changes MACRA will bring.

In the not-so-distant past, good oncology practice managers (often coming up through the ranks) had to understand personnel management; basic accounting; oncology coding; drug purchasing and management; contracting for fixed rates on a fee-for-service basis with a considerable number of private insurers; the management of claims and denials; and keep the physicians informed, busy, and happy.

By 2017, good oncology managers will need to understand all of these functions, in addition to a plethora of contracting relationships, public relations and strategic affiliations, drug purchasing and management when the mishandling or overuse of just 1 or 2 drugs could financially devastate the practice, increased oversight and regulatory restrictions, and complex contracting situations that could leave a practice out of network and out of business if not properly handled.

Truly great oncology managers will navigate their practices through alternative payment models, practice operations, and process transitions from patient treatment to care management and population management; risk management; bundled payments; episodes of care contracting; and quality measure and oversight pressures for reporting and analytics to an extent never before seen. The stakes are extremely high, and the MACRA legislation will push these pressures into the mainstream for practices, when, up until now, those most complex initiatives have been reserved for pilots and innovation programs.

Navigating Oncology Practices: The New “Numbers Game”

Practices will now be paid, penalized, and rewarded based on how they are scored on a series of categories. Because Medicare payments will be largely budget-neutral, any rewards paid to practices will come at the expense of penalties assigned to other practices.

A practice may feel like a winner to be categorized into a neutral payment impact model, but that keeps a growing target on their backs to move into the reward group or fall into the penalty group. Much of a practice’s positioning may be out of its control, and a function of geography, competition, other practices’ positioning and actions, patient mix, and local opportunities.

So what numbers are going to rule your lives now? Here are just a few.

55 Million

The Medicare program covers approximately 55 million people. The financial impact of MACRA on your Medicare business—which, for many practices, is up to 50% of their patient mix—will affect your financial stability for your other patients.

MACRA will be a Medicare game changer, with eventual ripples and consequences for private payers and contracts as well.


Equally important to the coding for the services you deliver and for which you seek payment are the diagnosis codes that track comorbidities and symptoms. These International Classification of Diseases, Tenth Revision (ICD-10) codes track the complexity of your patient; coding to the highest appropriate level of specificity for the patient’s diagnosis, concurrent conditions, and comorbidities will make a significant difference in your complexity scores.

CMS Quality and Resource Use Reports

The Quality and Resource Use Reports are feedback reports available from CMS for individual tax identification numbers that show how groups and solo practitioners performed the previous year on the quality and cost measures that were used for the Physician Quality Reporting System, the Consumer Assessment of Healthcare Providers and Systems, and the Value-Based Payment Modifier. These quality and cost measures will earn you points. Learn the point system, and understand where to put the majority of your energy under the MACRA program.

Internal Data Measures and Reporting

Medicare reports will tell you where you stand. You will need to be running your own internal reports to validate or challenge what is being reported about you. Analytics and statistical dashboards should become key components of your team meetings. Where do you stand? What can you change to push your measures in a different direction?

Value and Costs

Practices will be scored on the total costs of care for beneficiaries assigned to them under MACRA.

Your practice will be benchmarked against other practices for the value you deliver for those costs. You will want to lower your costs while increasing your value and quality. This will involve looking outside of your own practice walls—at costs and at outcomes.

What are the costs for Medicare of services delivered outside of your own office? Can you influence those costs through patient management or referral choices? What happens to patients outside of your walls? How effectively are patients’ comorbidities being managed, if they are being managed at all?

Quality Measures

Do you currently participate in quality reporting programs? Are these programs manual or technology supported? Are you ready to track measures on every patient every day? Medicare will be doing this through claims and other information. If you are not yet ready to embrace quality reporting and analytics for every patient, you will need to be by the end of 2017.


Medicare wants 90% of its payments to be value-based by 2018, and other private payers are following suit; this means methods, reporting, and reconciling far beyond fee-for-service. Risk-based analytics and management will also be an essential part of future practice contracting. Although the management of payments is the backbone of practice stability, the majority of practices do not yet have the technology or personnel resources to conduct this more sophisticated reporting.

3 Points to 70+ Points

Performance in 2017 will determine practice payments in 2019. CMS has relaxed some of its requirements for payment to allow practices to gradually transition into MACRA, but practices who perform at lower threshold point levels are likely to see penalties and payment reductions. Practices will be well-served to create a table for the point qualifications, and determine early in 2017 what point levels they plan to achieve.

4% Penalty

Practices that do not take any action to perform under the Medicare program submission options will be hit with an automatic reduction in total Medicare payments in 2019; therefore, minimum-level participation is recommended to avoid that penalty.

90 Days or 365 Days?

Practices may choose to participate on an “all basis” for 365 days of 2017, or on a “partial basis” for at least 90 days. The potential for reward is significantly different, but so is the effort involved.

Moving Forward

MACRA is going to happen. Some had hoped that after receiving approximately 3800 comments, CMS would postpone it, but that is not the case. MACRA will change the face of oncology practice management. Numbers and dashboards will become part of our daily lives.

Only time will tell whether this is a step in the right direction. I hope we can maintain our passion and focus on patients and on those who care for them. That passion is a defining characteristic for oncology care providers and the practice staff.


  1. Centers for Medicare & Medicaid Services. Medicare program; Merit-Based Incentive Payment System (MIPS) and alternative payment model (APM) incentive under the Physician Fee Schedule, and criteria for physician-focused payment models. Final rule with comment period. Accessed October 17, 2016.

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