Due to the high cost of cancer care, the oncology landscape is under intense scrutiny from the Centers for Medicare & Medicaid Services (CMS) and commercial payers. Cost trends in oncology demonstrate that what Medicare pays for cancer care is unsustainable and changes must occur or the program will soon be insolvent. Medicare’s hospital insurance trust fund is projected to be depleted by 2026.

 If this happens, more financial burden will shift to patients or care for Medicare beneficiaries may not be available.

Studies have raised doubts about the value Medicare and other payers are getting for the care they pay for, including in oncology.

 This has intensified the demand for new value-based care models such as the Merit-based Incentive Payment System (MIPS) and the Oncology Care Model (OCM). The OCM is an alternative payment model from the Center for Medicare & Medicaid Innovation (CMMI), an organization under CMS that develops new healthcare payment and service delivery models. The voluntary, 5-year pilot program will end in June 2021 and could be replaced by another complex value-based model. Oncology practices not participating in the OCM are in MIPS, as are most providers who care for patients with Medicare coverage.

The overarching goals of both programs are to better manage costs, deliver higher-quality care, and improve the patient experience. But are these programs actually achieving cost reductions, especially in oncology, that can help stabilize the costs to Medicare? Are they generating the desired improvements in quality of care and patient experience? Now that we are several years into both programs, these questions are worth a closer look.

Is it Possible to Reduce Costs and Provide Better Care?

Both MIPS and the OCM are part of CMS’ strategy to transition to paying for value rather than volume. Both programs have been thoughtfully designed to try and maintain or improve quality while maintaining or decreasing costs. However, they have several differences. For example, the OCM provides incentive payments for practice transformation to meet CMS’ Triple Aim of better care for individuals, better health for populations, and lower costs per capita.

 MIPS does not provide funding for change. The OCM is a steeper ramp to value-based care with more financial investment required. MIPS is a slower route to that objective.

Based on our experience with practices in The US Oncology Network (The Network) that are participating in the OCM, the program appears to be meeting its major goals of improving care while reducing costs. However, performing well in the OCM is extremely challenging and does not happen overnight. It requires a significant amount of practice transformation. The program was designed to support a better way to deliver care by funding practice transformation. Practices receive a Monthly Enhanced Oncology Services (MEOS) fee of $160 for each patient enrolled in the OCM. MEOS payments compensate for management and coordination of care. This additional funding enables practices to add nurse navigators, social workers, and other highly trained staff who enhance the patient experience while facilitating care that is more cost-effective.

Across participating practices in The Network, care has improved with the OCM, largely because the additional staff provide more touch points for patients. For instance, many practices utilize team huddles to identify at-risk patients. This enables more preemptive care to better manage adverse events, keeping patients healthier and out of the hospital. With additional staff, practices are also more proactive in coordinating care and facilitating advance care planning discussions that improve patients’ quality of life during therapy and when therapy is no longer effective. Overall, the structure and requirements of the program have facilitated better care, and patient feedback has verified a higher level of satisfaction.

Realizing savings with the OCM is also possible. The program uses a very sophisticated mathematical model to determine what a practice should spend versus what is actually spent. The goal is for practices to generate a cost curve lower than for providers not in the program. Many of The Network practices participating in the OCM have been very successful in adapting their clinics to the model, achieving substantial savings for Medicare.

There are, however, concerns about the program. The biggest cost in the OCM is drugs. The costs of cancer drugs continue to increase and are out of providers’ control. Mechanisms are built into the OCM to prevent cost outliers from disrupting the model, but it is a difficult balance to achieve. The success of the model depends on its being able to compensate physicians adequately for episodes of care. However, a new drug may come into play that offers improved outcomes and it alone may cost more than the entire episode of care is projected to cost. When this happens, the practice may be penalized even though the choice of therapy was backed by solid evidence. There is a long list of cancer drugs in the pipeline, so this problem is not going away anytime soon.

There are also some flaws in the model that are causing difficulties for some practices. Despite doing a good job of implementing the changes needed to improve delivery of cost-effective care, some practices are not meeting financial targets in the program, and it is difficult to discern the root causes given the complex structure of the model. Target prices are difficult to achieve without more clarity on cost drivers and how benchmark care prices are determined. The OCM still needs some fine-tuning to better understand situations like these.

All things considered, it appears the OCM can provide better patient care and reduce overall costs to Medicare. Performance by a large number of practices across The Network has demonstrated these goals are not mutually exclusive. The Network has 15 practices participating in the OCM, and 13 have beat benchmark pricing in the most recent performance period. On the quality-of-care side, all 15 practices have qualified to share robustly in the amount of savings achieved.

The 2015 Medicare Access and CHIP Reauthorization Act combined several incentive programs into one: MIPS. MIPS is a very ambitious program and is much larger than the OCM because most providers, not just oncologists, who care for patients with Medicare coverage are required to participate. Much like the OCM, the idea behind MIPS is to transition away from volume of care to a focus on quality, value, and accountability.

Unfortunately, the guidance and feedback practices have received so far have been very slim. Many providers are unclear about what the program is trying to do and what they must do to succeed. Performance on various quality metrics is compared with the metrics from other practices, specialty by specialty. Practices that do well receive a positive adjustment on services billed 2 years after the MIPS calendar year. The 11 practices in The Network participating in MIPS have qualified to receive positive payment adjustments in Part B payments based on improvements in cost and value. Reporting requirements, however, are quite extensive, and providers struggle to meet them. At least for now, practices receive little in return for the amount of effort they expend.

Determining whether MIPS has reduced costs for cancer care while providing better care is a much more difficult question to answer than for the OCM. At this point, it is impossible to tell. MIPS is divided into 4 weighted categories upon which practices are judged—quality, interoperability, care improvement, and cost of care&mdash;and cost has been a very small part of MIPS so far&mdash;but will gain more weight as the program continues.

Practices may be able to achieve spending reductions, but this may be more challenging under MIPS than with the OCM. Unlike the OCM, MIPS does not provide funding to achieve the transformation necessary to deliver better care. Providing high-quality, cost-efficient care takes additional resources, and practices in MIPS have to absorb these costs on their own.

Additionally, a lack of data hinders performance improvement. In the OCM, practices have a vast amount of information from claims data and Medicare’s summary reports. Unfortunately, MIPS does not have that depth of view into critical cost areas, such as acute care events. Comprehensive data are essential to perform well in all these models, and, unfortunately, data from MIPS are sorely lacking that could facilitate conversations about where the costs are and how to reduce them.

At this point, what MIPS is accomplishing is unclear. We do not know whether it has moved the needle on cost reduction or whether it is a feasible way to pay for the care provided.

The focus on value will continue to intensify, and more value-based programs will be coming from the government and commercial payers. Consequently, providers must learn how to adapt to this changing environment. Practices in The Network agree that changes in how care is delivered and paid for are important, but practices still must remain financially viable to continue to provide access to care. Programs that simply reduce payments for services are going to improve the value of care. There has to be a thoughtful approach to paying more to those who deliver better value. The OCM and perhaps MIPS may provide valuable insight to lead us in that direction.

Preemptive care, a major component of the OCM, contributes greatly to cost savings. For instance, hospitalizations are a major expense in cancer care. A recent study found the average cost of nausea- and vomitingrelated hospitalizations among patients with cancer exceeds $15,000 per event.6 Effectively managing pain and other symptoms reduces expensive hospital admissions and emergency department visits. Advance care planning not only provides high-quality care for patients, but also saves money by decreasing ineffective and often undesired end-of-life care. Whether cost savings such as these are significant enough to help stabilize Medicare remains to be seen, but the OCM is, at least, a good start.

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Studies have raised doubts about the value Medicare and other payers are getting for the care they pay for, including in oncology. This has intensified the demand for new value-based care models such as the Merit-based Incentive Payment System and the Oncology Care Model.

Can New Oncology Payment Programs Help Stabilize Medicare?

For the past 18 months, 187 oncology practices across the United States have been participating in the Oncology Care Model (OCM), the Center for Medicare & Medicaid Innovation (CMMI) program designed to provide higher-quality, more coordinated cancer care at the same or lower cost to Medicare beneficiaries. In this complex program, treatment is divided into 6-month episodes of care, and practices receive quarterly installments of claims data from the Centers for Medicare & Medicaid Services (CMS). Practices are only just receiving their first reconciliation reports from CMS for treatment delivered at the very outset of the OCM. The first few reconciliation reports will be critical, as they will indicate whether a practice can save money and still provide quality care― both of which must occur to succeed in this model.

Sixteen practices in The US Oncology Network (The Network) are participating in the OCM. At this point, it is not known how many―or whether any―of our practices will succeed. Some may not receive a performance-based payment, issued for meeting quality and value thresholds, the first time around. This would not be very surprising because this is considered a “ramp-up” period. Hopefully, for the second performance period, which is already complete, practices will show they can reduce total expenditures compared with what they were predicted to spend, even if they were unsuccessful in cutting costs in the first round. Unfortunately, CMS’ reconciliation reports for the second period will not be available for another 6 or 7 months.

Keys to OCM Success Although there are still many unknowns with the OCM, a few conclusions can be drawn based on what is known about the model. Essentially, there are 5 crucial activities for success. If any of these activities is not done well, the practice probably will not succeed with the program.

1. Identifying patients and billing for monthly-enhanced oncology services (MEOS)

Patients eligible for the program must be identified before they can be enrolled in the OCM and undergo treatment. This may sound easy, but it is difficult to accomplish. Practices must develop workflows to identify OCM-eligible patients. Particularly challenging is identifying patients on oral drugs, as it is hard to know whether an oral cancer medication was prescribed if it was not documented clearly in the electronic medical record. In addition, a practice must have an initial fill date to mark the start of a chemotherapy episode. Patients who receive intravenous treatment are easier to track because the clinic controls drug administration and documentation is more evident. All eligible patients must be enrolled in the OCM— patients can decline participation in the OCM, but the practice can’t pick and choose.

New processes must be established to bill Medicare for the enhanced services offered to patients. The practice may need to hire social workers, navigators, and other staff to deliver these additional services and follow through on program requirements, such as adherence to the Institute of Medicine’s Care Management Plan. Much to Medicare’s credit, the up-front funding needed to accomplish practice transformation is provided in the form of MEOS payments. Without this money, offering unbillable services such as navigation, nutrition, and social work would not be possible in a community cancer care delivery setting. It is still uncertain whether the OCM design will be financially viable for community practices, but the 16 participating practices within The Network are interested in finding out.

2. Performing and reporting on all quality metrics

If practices do not report their data to Medicare, this metric will not be factored into their performance scores. Data must be submitted through the OCM portal and include detailed information about enrolled patients such as cancer stage. Whereas the first performance period required practices to report on quality metrics, the second period required them to improve on those metrics. Practices now must report and perform to succeed in the OCM.

In addition to the metrics submitted by practices, quality measures based on CMS claims data are used to judge practice performance. One of the important measures in this group is how well practices succeed in reducing hospital visits; practices must perform on this metric to achieve points toward their Aggregate Quality Score.

3. Passing audits and other on-site visits

CMS may visit practices to verify that the requirements and intent of the program are being followed. There are requirements for “redesign activities” that must be met. These activities can make a difference in the patient’s cancer care journey, so fulfilling these requirements is imperative to satisfying the terms of the program, not only to pass a potential audit but also to support optimal outcomes. Practices that fail an audit could be removed from the program, even if they are saving money and reporting satisfactorily on quality metrics.

4. Ensuring appropriate cost resource utilization

Cost resource utilization is Medicare’s term for the proper management of MEOS payments to ensure the money is being used to fund enhanced services. To verify funds are being spent appropriately, all practices must submit data on Medicare’s cost resource utilization website. Practices must enter detailed information concerning all new employees— including salary information&mdash;who are integral to the OCM. The MEOS money must, at least in part, go to new hires, as the premise is that practices cannot provide enhanced services without increasing their existing workforce. Practices must also submit information on any existing employee who is doing a component of work for the OCM that he or she was not doing before. This information should include how much time is spent on OCM activities.

This is one of the most crucial elements of the program, as the management of costs is a core component being evaluated in the OCM. CMS and CMMI are watching the program carefully to see whether it can deliver better, more cost-efficient cancer care to Medicare beneficiaries. In other words, fulfilling CMMI’s Triple Aim: better care, healthier people, and smarter spending.

If practices successfully complete the first 4 keys to success but spend an exorbitant amount of money providing care, they will fail to meet the criterion of controlling costs. Not only will they not receive performance-based payments, but they will ultimately fail the program.

Feedback from patients in the OCM across The Network has been positive, as they have seen an improvement in the way their care has been delivered. Providers are also generally enthusiastic about participating in this novel program, despite the additional workload and practice transformation required.

The OCM is not for all practices, but if a practice believes in what the model is trying to achieve—and the experience has been fairly positive so far&mdash;it should be worthwhile to remain in the program. Conversely, if it is burdensome for the practice and difficult to master, it might be wise to discontinue.

Practices not in the OCM are participating in the Merit-based Incentive Payment System, another federal value-based reimbursement program. One way or another, the government is determined to focus on value, and these types of programs are not going away. The OCM is merely a stepping-stone to the future, and oncology practices must adapt to this new way of doing business and delivering care.

Marcus Neubauer, MD, discusses the tools needed for a practice to succeed with the Oncology Care Model.

5 Key Elements Needed to Achieve Success With the Oncology Care Model

Last year we got a better glimpse of what managed care will look like in the future. Although there still are many unknowns, especially in light of this being an election year that will bring a new administration, it’s already very clear how the transition to value is affecting oncology practices.

For example, this trend continues to create a lot of anxiety for community oncologists. Many are concerned about payment changes, the loss of longstanding referral relationships as primary care physicians and other specialists align with specific networks, and whether oncologists can maintain practice autonomy. Given what we know today, practices should be sure to address the following items this year:

1. Be aware of and involved in what’s coming. 

Most oncologists chose their profession because they love caring for patients and find joy in conducting research to find new and better treatment options. Negotiating with payers and keeping abreast of payment changes are some of the “necessary evils” that many prefer to hand off to practice administrators. However, with so much at stake during this transition to managed care, oncologists must make it a priority to be aware of and involved in what’s coming.

While the future of payment methods for oncology care is still murky, there’s no doubt that our industry is rapidly shifting away from fee for service (FFS) to value-based care. There continues to be a lot of discussion about what constitutes value, and many organizations from payers to associations and physician networks are working to develop definitions and guidelines.

Payers now expect physicians to make treatment recommendations that are in the best all-around interest of the patient. That means choosing evidencebased therapies that deliver the best outcomes and being economically responsible. These have been the foundation of evidence-based pathways since they were first introduced by The US Oncology Network 10 years ago.

Value Pathways powered by NCCNTM are based on the National Comprehensive Cancer Network’s Clinical Practice Guidelines in Oncology® and The US Oncology Network’s Level I Pathways. They are up-to-date, peerreviewed, evidence-based practice algorithms for cancer treatment, and are designed to maximize survival, minimize toxicity, and provide cost-saving opportunities. They are brought to the point of care by Clear Value Plusâ„ , a regimen support tool that can interface with most electronic medical records (EMRs) and provides financial transparency and real-time reporting.

Oncologists should also keep a watchful eye on what The Centers for Medicare & Medicaid Services (CMS) is doing. Because a majority of cancer patients are 65 years or older and covered by Medicare, many practices receive 40% to 50% of their payment from Medicare.

CMS plans to launch its Oncology Care Model (OCM) on July 1. This episodebased payment model will manage chemotherapy treatment and the spectrum of care provided to beneficiaries receiving chemotherapy. Practices chosen to participate in the five-year pilot will receive financial support for transforming their practices, including monthly care management payments for participating Medicare FFS beneficiaries as well as retrospective performance-based payments. This compensation will be in addition to the services the physician provides and bills to Medicare.

Practices in this pilot are expected to rely on the most current medical evidence and share decision-making with patients about whether they should receive chemotherapy. The performance-based incentives are based on comprehensively and appropriately addressing the complex care needs of the beneficiary population receiving chemotherapy as well as furnishing services that specifically improve the patient experience or health outcomes.

Another organization with skin in the game is ASCO, as indicated by their development of a “value framework.” This framework compares one new agent in cancer treatment with the prevailing standard of care for a specific clinical cancer indication using data from a prospective randomized trial. Rather than scoring different drugs against each other, the value framework examines the clinical benefit and toxicity of an agent in order to generate a “net health benefit” score that is juxtaposed against the cost of treatment. It is designed to help evaluate the value of different cancer treatment options and facilitate discussion between physicians and patients when it comes to making decisions about cancer care.

2. Think holistically about your patients. 

Unplanned hospitalizations are very expensive, and physicians are being held accountable for their patients’ overall care. This elevates the need to be more aware of the treatment patients are receiving outside the oncology office.

Practices that have not already established a solid framework for providing holistic care must take steps to do so this year. Many oncology practices are finding success with patient navigators who help ensure that patients adhere to treatments by proactively monitoring their health and progress between appointments. Others are offering extended office hours to better handle patient questions and concerns.

Patient portals are also being used to heighten engagement with patients by providing them with easy access to their personal health records and educational resources. Portals help patients to better understand their care and treatment plans while improving communication with the practice.

Many of these tools and ancillary services are crucial for meeting the guidelines being established for value-based care and payment. Practices should evaluate the appropriateness of each in order to achieve better care and outcomes.

With value-based payment becoming a reality, physicians need proven tools and processes to support evidence-based medicine—from treatment guidelines and pathways to reporting solutions that provide insight into practice trends. These tools are essential to thriving in a value-based payment system that recognizes and rewards physicians for providing cost-effective, high-quality patient care.

Many practices have already implemented the ancillary services discussed above and were early adopters of oncology-specific EHRs and other technologies that enable them to capture, monitor, and report data. In fact, some practices are collecting so much data, they are not sure what to do with all of it.

One of the most important things physicians can do to show payers that they are meeting their criteria for delivering high-quality care at a lower cost is to know the rules. Now, more than ever, oncologists must be vigilant in understanding the various contracts they have with each of their payers so they know which metrics are most important to each payer and are able to provide each with the right information in a timely manner.

Oncologists should also be on the lookout for new technologies. For example, it is going to be increasingly important to be able to provide comprehensive information to payers that combines the information from the oncology practice with data from other providers. Practice solutions that connect providers and allow sharing of information will be the catalyst for providing the required information to payers.

Cancer is one of the most important and complex healthcare challenges of our time. We have a lot of work to do as our industry works through changes aimed at improving outcomes and lowering costs. While the evolution toward managed care can create unrest among oncologists, it also creates many opportunities to shape the future of how care is delivered to patients in our communities.

Diana Verrilli is vice president and general manager of Managed Care, Quality & Provider Solutions for McKesson Specialty Health. Dr Marcus Neubauer is medical director of Oncology Services for McKesson Specialty Health & The US Oncology Network.

Although there still are many unknowns,
especially in light of this being an election year that will bring a new
administration, itâ€™s already very clear how the transition to value is
affecting oncology practices.

Top 3 Must Do's to Prepare for Managed Care in 2016

	The US Oncology Network and McKesson Specialty Health

Medical bills are the single largest cause for filing personal bankruptcy in the United States.

 In fact, it’s estimated that up to 62% of all personal bankruptcies result from medical expenses. The high cost of medical care can be devastating to patients and their families—even those with health insurance—as they struggle with copayments, coinsurance, and deductibles. People with cancer are especially prone to these financial strains because the cost of treating the disease is higher than many other diseases, and treatment can be lengthy.

One approach to manage the costs is to create, employ, and adhere to clinical pathways. Pathways are effective tools for reducing unnecessary variability in care, a key factor in achieving better outcomes and more predictable costs. Ironically, a decade ago when The US Oncology Network introduced its Level I Pathways, which have been incorporated into Value Pathways powered by NCCN, many payers were leery of this strategy. However, after seeing positive patient outcome results

 and experiencing the impact pathways can have on their cancer spend, most payers are now all in.

While it is clear that pathways are here to stay, the current state does present challenges for oncologists. Some have questioned the value of pathways and have been particularly vocal about whether the guidelines are too focused on cost or are too confining. Others are frustrated by the complexity of adhering to different pathways that have evolved as many payers have developed their own versions.

These challenges underscore the need for oncologists to continue to take the lead in finding pathways that benefit patients and are acceptable to payers.

Let’s be realistic. No payer thinks what they currently pay for cancer care is a good deal. Many drug regimens are expensive, some with only marginal results. Unplanned hospitalizations is a leading cause of the high cost of cancer care. While less than 1% of many payers’ populations have cancer, more than 10% of those payers’ expenditures are for cancer care.

Pathways were developed to proactively drive value— more specifically to improve the quality of patient care, which leads to better outcomes and lower costs. The value equation can be simply stated as outcomes (or quality) divided by cost. The higher the cost of cancer treatment, the more the value is challenged. If the difference in outcome is substantial between two treatments, good value may be upheld even if the superior treatment choice costs more. On the flip side, when two regimens are marginally different in outcome, higher costs quickly diminish value.

The US Oncology Network invested a significant amount of resources developing the original Level I Pathways and, more recently, Value Pathways powered by NCCN. Community oncologists worked together and based both pathways on significant evidence reviews, best practices, and outcomes. As oncologists review treatment options, they first consider efficacy and toxicity of each regimen. If two regimens prove to be similar, then the cost of care becomes the determining factor, and the regimen with the lower cost is recommended as the pathways choice.

There are several well-documented examples that support this strategy, one being a retrospective study conducted by The US Oncology Network and Aetna that looked at 2 groups of patients with NSCLC over the course of an 18-month period. Patients in 1 group were treated entirely with on-pathway regimens. The second group was comprised of patients who, at any time, were treated with an off-pathway regimen. Because pathway adherence was not expected or meant to reach 100%, there was a significant group of patients who received at least 1 off-pathway regimen. Results of the study showed a 35% reduction in outpatient costs over 12 months with equivalent clinical outcomes (ie, overall survival) for patients treated on-pathway.

There was also a pivotal Eastern Cooperative Oncology Group (ECOG) study published in 2013 in 

The Journal of the American Medical Association

, which considered the addition of bevacizumab as a third agent in the treatment of patients 65 years and older with advanced NSCLC. In this study, patients were assigned to either paclitaxel/carboplatin or paclitaxel/ carboplatin with the addition of bevacizumab.

The study showed that median survival time for patients who received paclitaxel/carboplatin was 8.9 months and 9.7 months for patients with the addition of bevacizumab. The authors concluded that adding bevacizumab to carboplatin and paclitaxel chemotherapy was not associated with better survival. The costs of these regimens, using Medicare reimbursement rates, were $625 for six cycles of paclitaxel/carboplatin and $74,000 for paclitaxel/carboplatin/bevacizumab.

Results from these studies highlight the importance of considering cost after efficacy and toxicity. It is the right approach, because cost doesn’t only matter to payers. It is also very important to patients and their families.

Pathways are designed to guide physicians to the best treatment options; however, there are some patients who are best treated outside of the pathway in question. Most pathways have mechanisms to allow for these exceptions, and oncologists should explain pathway exceptions to payers so they understand the process.

For Value Pathways powered by NCCN, the expectation is that compliance should be about 80%. This includes clinical trials, which are always considered on-pathway. A higher than 80% compliance rate may indicate physicians are not considering exceptions. A lower rate, however, may point to oncologists who are veering off-pathway too quickly. Tracking and evaluating the reasons for the exceptions is crucial for the further development of any pathway.

A common frustration among physicians is the number of different pathways in the marketplace. As payers began to see the value of pathways over the last 10 years, many developed their own guidelines, which makes treating patients more complicated because there are multiple sets of “rules.” The benefits of pathways stem from creating standardized care paths based on a thorough review of the science. As new drugs are introduced to the market, oncologists must take an active role in designing, initiating, updating, and adhering to pathways. If oncologists aren’t determining the value of these drugs, the payers will and interests may not be aligned.

Most payers understand that they are not experts in cancer care and appreciate the work that has been done by oncologists. The onus is on oncologists to create pathways that drive value and then ask for a seat at the table to negotiate reimbursement that emphasizes value over volume.

The benefits of pathways far outweigh the challenges, and as we move into the next decade of pathways use, we have many opportunities to improve upon this strategy. It is important to keep in mind that the oncology space should be neither entirely payer nor provider dominant. Both have important roles in helping control the cost of cancer care and allowing access to care.

			LaMontagne C. NerdWallet Health finds medical bankruptcy accounts for majority of personal bankruptcies. NerdWallet.com. March 26, 2014. https://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/

			Hoverman JR, Cartwright TH, Patt DA, et al. Pathways, outcomes, and costs in colon cancer: retrospective evaluations in two distinct databases. 

			Neubauer MA, Hoverman JR, Kolodziej M. Cost effectiveness of evidence-based treatment guidelines for the treatment of non—small-cell lung cancer in the community setting. 

			Fitch K, Pyenson B. Site of service cost differences for Medicare patients receiving chemotherapy. Milliman Client Report. October 19, 2011. http://milliman.aiprx.com/uploadedFiles/insight/health-published/site-of-service-cost-differences.pdf

Pathways are effective tools for reducing unnecessary variability in care, a key factor in achieving better outcomes and more predictable costs. 

Oncologists Must Take Lead Role in Developing Clinical Pathways

On June 30, the deadline passed for practices interested in participating in the Oncology Care Model (OCM) to submit their completed applications. Perhaps your practice was one of the more than 400 that submitted a letter of intent to participate and you are hoping to be among the 100 or so selected for the program.

The OCM is a program developed by the Center for Medicare & Medicaid Innovation (CMMI) that seeks to improve the effectiveness and efficiency of specialty healthcare through a new payment and delivery model. It requires participating physician practices that administer chemotherapy to enter into payment agreements with CMS to measure and perform on quality metrics during an episode of care. In exchange, CMS pays practices an incentive for Medicare fee-for-service beneficiaries of $160 per beneficiary per month for the duration of the episode. The program also includes potential performance-based payments that are specifically designed to encourage coordinated quality care at a lower cost during the episode.

The goal of this program is to appropriately align financial incentives to improve care coordination, appropriateness of care, and access to care for beneficiaries undergoing chemotherapy. Ultimately, these improvements are intended to result in better care, smarter spending, and healthier people. Similar programs have been under way in general practice for quite some time, and CMMI is now expanding to specialty care. So, why oncology? Oncology is an obvious first choice. The cost of treating cancer—especially chemotherapy&mdash;is highly variable, but mostly expensive. Furthermore, more than 1.6 million people are diagnosed with cancer each year, with a majority of those being over 65. Factor in the US Census Bureau’s prediction that by 2030 more than 20% of the American population is expected to be over 65, and it’s easy to see why oncology is on the radar.

CMS is not the only group to be heading down the road toward alternative payment models. At the 2015 ASCO Annual Meeting, the society announced a similar program called Patient-Centered Oncology Payment (PCOP). Their proposal is designed to simultaneously improve services to patients and reduce spending for Medicare and other payers. Likewise, many if not all private payers have similar initiatives under way. In fact, CMS is encouraging other payers to join their efforts to create a multi-payer model that would streamline transformation at the physician practices.

Practices chosen to participate in the OCM will have their work cut out for them. The program is slated to officially kick off in spring 2016, meaning that practices will need to begin to “transform” quickly to ensure they will be able to meet the performance and reporting criteria required of the program.

The addition to the practice of patient navigators who proactively monitor and perform outreach to patients is a requirement of OCM participation. It’s also clear that technology will play a vital role in enabling practices to successfully participate in this program.

Many oncology practices have already made progress in adding appropriate personnel and implementing technology solutions, such as Electronic Health Records (EHR), to enhance their ability to document and report care plans and patient event data. However, to be successful in meeting the specific criteria set forth in the OCM, most existing EHRs will need to be enhanced.

Practices must closely collaborate with their EHR vendors to clearly outline the requirements of multiple programs including Meaningful Use, PQRS, the OCM and other reimbursement models as introduced by private payers. It is important that practices are capable of participating and performing in more than 1 alternative payment model. This may require significant EHR enhancements.

Technology, necessary for successful participation in the OCM, will go beyond EHRs. For example, practices will receive claims data from payers that will be rich in information but will require analysis and interpretation. Solutions offered by McKesson Specialty Health consolidate data from internal and external sources and support practices through the entire care lifecycle, from treatment selection and administration to patient-reported outcomes, billed charges, and payer Explanations of Benefits (EOBs). These clinical, operational, and financial insights into the coordination, cost, and value of patient care can help practices in making timely and appropriate decisions, while providing comprehensive data for OCM reporting.

As many practices anxiously await the decision from CMS as to whether they have been selected for the OCM, it is clear that the way oncology practices will be reimbursed is changing. So, regardless of whether your practice is chosen for the OCM, it’s time to accept (and even embrace) change and begin taking steps toward transforming your practice.

Marcus Neubauer is medical director of oncology services at McKesson Specialty Health.

Many oncology practices have already made progress in adding appropriate personnel and implementing technology solutions, such as EHR, to enhance their ability to document and report care plans and patient event data. However, to be successful in meeting the specific criteria set forth in the OCM, most existing EHRs will need to be enhanced.


CMS Standards for Reporting Call for Advanced Technology, Training

Precision medicine has become fashionable. President Obama explained its significance in his State of the Union Address in January, and followed up by including a $215 million initiative to collect genetic information from 1 million Americans as part of the budget he sent to Congress. But even before his speech, precision medicine was receiving a great deal of attention, particularly in oncology.

This exciting new approach to medical diagnosis and decision making is a hot topic for good reason. Very few healthcare initiatives in our lifetime have evolved as quickly and shown as much promise, especially relating to the way we treat patients with cancer. But like all new ideas or technologies, rapidly occurring changes present both opportunities and challenges for everyone involved, including government, patients, payers and physicians.

It’s hard to argue with the benefits of precision medicine. Oncologists dream about treating cancer with more exact therapies that improve outcomes and reduce side effects. However, we must acknowledge and find ways to overcome some of the challenges that will arise along with such rapid and sweeping change.

The first challenge oncologists struggle with is ordering the appropriate tests for their patients. A proliferation of diagnostic companies offer molecular tests, but only limited guidance on which tests are clinically appropriate and, also important, which tests insurance companies will cover. Although genetic tests are becoming more affordable, some are still quite expensive. Payers wrestle with decisions on what types of tests to pay for and under what circumstances, often leaving the patient stuck in the middle. More evidence on the clinical utility of molecular panels is required to solve this problem.

Another challenge oncologists face is how to use the results of increasingly large molecular panels. The results of a panel may suggest a clinical trial the physician doesn’t have access to, a drug that is off label, or simply an ambiguous result. As new, more-specific information about each variation within a cancer type is unveiled, oncologists will face a substantial increase in the amount of information they must review to stay up-to-date and provide the highest quality of care. This is especially true for many community oncologists who practice as generalists, treating patients with all types of cancer.

Results that lead to expensive off-pathway therapies are particularly difficult for physicians, patients, and payers. An oncologist and his or her staff may have to spend hours on the phone trying to get a treatment authorized, and payers must struggle with the decision of whether to authorize a treatment with limited evidence of efficacy. Once prescribed, the outcomes of these treatments are not systematically recorded, resulting in the loss of potentially valuable data.

The vast amount of information and knowledge required for precision medicine underscores the value of participating in a network that offers access to shared best practices and continually updated evidence-based pathways. These pathways will become increasingly nuanced as we expand our understanding of how different mutations impact treatment decisions. Oncology-specific healthcare information technology with real-time updates on the latest pathways, drugs, and clinical trials will be required for oncologists to practice effectively in the future.

The rapidly growing world of precision medicine also creates an unprecedented need for clinical research. Driver mutations must be identified and then studied to determine if related targeted therapy really makes a difference. Already, more efficient trials are being designed to test multiple drugs against multiple targets. We need to continue to push to have these trials in the community-based setting, where oncologists deliver a majority of the cancer care. In addition, we know that a great amount of valuable retrospective data is generated every time an oncologist prescribes a treatment for a patient and documents it in an electronic health record. When everyone in the oncology community has started linking patients, cancer mutations, and treatments, and begins tracking outcomes, we will truly be driving cancer care forward.

Cancer is smart and hard to treat. Precision medicine may give us the advantage we need to more directly target a specific disease, reduce toxicity, and avoid older treatments that have unpredictable results.

Whether or not the proposed initiative is approved in this year’s budget, I expect genetic testing to continue to become more prevalent and to have an unprecedented impact on our healthcare system. In the coming years, we’re going to gain even more clarity regarding which gene mutations matter and see tremendous progress in the development of new treatment options. And as we do, precision medicine will help us improve cancer survivorship and ultimately reduce the costs of care.

Marcus Neubauer is medical director of oncology services at McKesson Specialty Health and The US Oncology Network.

Like all new ideas or technologies, rapidly occurring changes present both opportunities and challenges for everyone involved, including government, patients, payers and physicians.

Physician Quandary: Data Shortage, Surfeit Impinge on Precision Medicine

Think back to what healthcare was like in the early 1980s. Thirty years ago, electronic health records and oral chemotherapy were hardly blips on the radar, and vertical integration was in its infancy. Even though the healthcare environment was very different, many of the challenges we face today are the same. Rising costs, an aging population, and higher rates of chronic disease were issues back then for private and government payers, providers and patients, just as they are now. Several initiatives that have a dramatic impact on healthcare today were born during that time—managed care, transitioning away from inpatient care toward outpatient care, and the introduction of clinical pathways.

Originally, pathways focused on standardizing care as a way of managing the quality of care provided. The goal was to reduce unnecessary variability in clinical practice and improve outcomes. Evidence-based guidelines were developed and adopted throughout healthcare from general practice to specialties—including oncology. Over the years, the role of pathways has evolved and expanded significantly. Today, they are not only effective tools for improving the quality of care, but also for driving value in healthcare.

The idea of driving value with pathways has gained the attention of payers, providers, and many thought leaders in cancer care. Treatment of cancer, in particular, has been identified as one of the fastest-rising cost centers in healthcare and has come under scrutiny for high drug costs, high rates of hospitalizations, and potentially unnecessary and expensive end-of-life care. Several studies from McKesson Specialty Health and The US Oncology Network reported over the last decade support for the use of evidence- based guidelines, specifically Level I Pathways, as an effective method of lowering cost while still demonstrating outcomes similar to those in the published literature. Level I Pathways, which were developed nearly 10 years ago by The US Oncology Network, are now refined into Value Pathways powered by the National Comprehensive Cancer Network (NCCN)—the result of the recent collaboration between the NCCN, McKesson Specialty Health, and The US Oncology Network.

A study conducted by The US Oncology Network and Milliman compared patients with colon cancer whose care followed physiciandeveloped Level I Pathways (also known as “on-pathway”) with other patients (“off-pathway”). The study found mean per patient cost differences of more than 30 percent (favoring the on-pathway group).

Another study looked at patients with non-small cell lung cancer (NSCLC) treated in the community outpatient setting. Cost of care over a 12-month period and overall survival were compared between patients treated on-pathway versus off-pathway, and the study found overall outpatient costs to be 35 percent lower for on-pathway versus off-pathway choices (average 12-month cost, $18,042 vs $27,737, respectively) with no difference in overall survival observed.

 Results of both of these studies suggest that treating patients according to clinical pathways is a cost-effective strategy for delivering care, and highlights opportunities for oncologists to help rein in cancer care costs.

Pathways help reduce costs by standardizing care. One of the biggest cost drivers in healthcare is high variability in care. This is especially true in the treatment of cancer, given the high and variable costs of oncology drugs. Following pathways leads oncologists down a path that ultimately results in a treatment option that has been proved the most clinically effective and cost-effective option. Pathways were developed with clinical efficacy, toxicity, and cost taken into consideration. In other words, when developing a pathway to treat a specific type of cancer, if 2 drugs offer the same efficacy and toxicity, the lower-cost drug, often a generic drug, is selected as the pathway treatment option. This also improves the predictability of cost for payers and patients.

Value Pathways powered by NCCN are an example of pathways that follow this formula. They are up-to-date, peer-reviewed, evidence-based practice algorithms for cancer treatment, and are designed to maximize survival, minimize toxicity, and provide cost-saving opportunities.

 They represent the same rigor that we put into creating and maintaining Level I Pathways over a decade ago, but now have the expert contribution of NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines) panel members. Value Pathways powered by NCCN differ from NCCN Guidelines. They are a subset of NCCN Guidelines that take not only efficacy, but toxicity and cost into consideration to come up with a more succinct list of treatment choices that drive value. Currently, Value Pathways for chemotherapy decision making have been developed for more than 12 different diseases, and Value Pathways for radiation therapy are on the horizon.

To bring Value Pathways powered by NCCN and NCCN Guidelines to the point of care, McKesson Specialty Health offers Clear Value Plus, a regimen support tool that provides Value Pathways and NCCN Guideline choices at the point of care. Clear Value Plus also allows a provider to see the relative costs of selected regimens to help patients make informed decisions that take both efficacy and cost to patient into consideration. Clear Value Plus can be used as a stand-alone Web-based tool, integrated in the physician workflow through clinical interfaces with multiple electronic medical records (EMRs), or fully embedded with McKesson Specialty Health’s iKnowMed Generation.

 In all instances, Clear Value Plus delivers clinical and financial transparency along with real-time reporting.

Some wonder if pathways are here for the duration or if the introduction of personalized medicine will eliminate the need for standardized care. On the surface, the idea of individualized care determined by genetic testing might suggest pathways will be rendered obsolete. However, Value Pathways take into account the cancer causing mutations that require specific treatment choices. So, if anything, the progression toward individualized medicine will actually lead to more refined pathways and ultimately better outcomes as the most effective treatments are used.

Likewise, questions arise about the effects of different payment scenarios using pathways. Payers are exploring a myriad of payment options to address spiraling costs, including bundled payments for treatment. Pathways inherently make cost of treatment for different types of cancer more predictable and can be a great tool in helping physicians and payers estimate costs and negotiate appropriate bundled payments.

Thus far, practices using Clear Value Plus are giving very positive feedback. Users like having access to Value Pathways powered by NCCN, NCCN Guidelines, and financial information, all at the point of care. Also, because treatment decisions are recorded in Clear Value Plus, participating practices can use reports for quality improvement and payer contracting around value-based initiatives. Oncologists understand that when patients receive standardized care anchored in clinical quality and evidence-based medicine, the opportunity for positive outcomes increases, and oncologists can help keep costs in check. With this in mind, pathways will likely be an integral part of oncology care delivery for the foreseeable future.

			Hoverman JR, Cartwright TH, Patt DA, et al: Pathways, outcomes and costs in colon cancer: Retrospective evaluations in two distinct databases. J Oncol Pract. 2011;7(suppl):52s-59s.

			Neubauer M, Hoverman JR, Kolodziej M, et al. Cost effectiveness of evidence-based treatment guidelines for the treatment of non—small cell lung cancer in the community setting. J Oncol Pract. 2010;6(1):12s-18s.

			McKesson Specialty Health: Connecting payers and physicians for improved patient care. http:// www.innoventoncology.com/web/. Accessed November 18, 2014.

Several initiatives that have a dramatic impact on healthcare today were born during that timeâ€“managed care, transitioning away from inpatient care toward outpatient care, and the introduction of clinical pathways.

Marcus Neubauer, MD