New Models May Bridge the Payment Gap

Barry Russo

The Center for Cancer and Blood Disorders (CCBD) believes that its acupuncturist, dietitian, psychotherapist, and other ancillary service providers extend patient's lives and decrease total treatment costs by reducing hospital visits. In the past, payers did not agree and would not pay for such services, which is one reason why partners at the practice are excited about the ongoing transition from fee-for-service payments to fee-for-outcome payments.

“If payment models truly allow practitioners to share in cost savings and to profit from improved outcomes, then it will make sense for us, financially speaking to provide all services that make sense medically speaking for our patients. We will be able to make our best medical judgment, but we will be risking our own money on that judgement, which is fair,” said Barry Russo, who manages CCBD’s 185 employees at nine offices across the Dallas-Fort Worth metropolitan area.

“The payment structure isn’t there with any of our payers yet. We’re still in very early days of creating models that evaluate our impact on costs and outcomes, but payment models are certainly moving in a direction that rewards practices for efficiently providing superior care, which is good news for practices that do, in fact, efficiently provide superior care,” Russo said.

Payment models have already shifted enough that CCBD has reaped financial benefits from its decision to implement the oncology medical home (OMH) practice model. That model, along with several other closely related patient care strategies, is designed to simultaneously slash total treatment costs and improve patient outcomes, largely by identifying and addressing problems before they get bad enough to send patients to the hospital (Table).

A cornerstone of these models is centralized telephone triage lines that operate 24-7 to answer patients’ questions as soon as possible and arrange immediate appointments for those who need them. These speedy appointments typically require longer operating hours, such as on the weekend, or increased staffing. The new models also emphasize both greatly improved communication with patients and increased reliance on standards of care and correspondingly less reliance on physician discretion.

The transition took thousands of staff hours for CCBD. Even a seemingly simple step, like replacing individual telephone numbers at offices with a single point of patient contact, proved to be a major undertaking. Worse, the practice needed to document that it was undertaking every step correctly if it wanted to be certified as an OMH or meet the standards for programs such as ASCO’s Quality Oncology Practice Initiative. Still, the extra work was less of a challenge than the radical changes to patient—caregiver interaction.

Under the old system, patients with questions called their individual treatment center and often spoke directly to their usual nurse or their doctor. With the new system, calls go to a single triage operation staffed by nurses who never see patients in person. Several other aspects of the new model—such as the longer operating hours—tend to increase the number of people with whom CCBD patients interact at the practice and tend to distribute decision-making power from each patient’s doctor to a number of CCBD team members.

“It’s a mistake to underestimate how big a change this model represents. It’s not just a huge amount of paperwork and computer updates in the back office. It’s a major change in workflow for every physician, every nurse, and everyone else,” said Ray D. Page, DO, PhD, the practice’s managing partner. “You need universal buy-in to make it work well, and I can fully understand why many practices wouldn’t want to do it. The trouble is, practices that don’t make transformational changes are not going to be able to survive under new payment models.”

Page believes practices that want to make the full transition to the OMH model need to negotiate new compensation models with at least some of their payers before they undergo a comprehensive transition. Several components of the model—keeping open appointments for emergencies, having more patient interactions with the care team, and actively checking up on patients who are acutely ill—undoubtedly increase costs. Practices that implement these components without negotiating to share in any possible hospital savings put themselves at risk of heavy financial loss.

Other features of the OMH model are almost universally beneficial, even if they don’t bring extra dollars from payers, because they improve patient outcomes, boost practice margins, and save payers money— largely from inception. Page also thinks these features offer practices a significant opportunity to benefit both patients and themselves while easing the eventual transition to one of the newer models of care delivery.

For example, treatment pathways that list every step oncologists need to take with every patient on every visit appear to reduce costly errors and create significant savings for practices. The centralized phone triage, which typically uses standardized scripts to make sure nurses cover every base, also creates significant financial savings for most practices, in part because it frees clinical nurses from distracting phone calls. There’s even some anecdotal evidence from CCBD’s experience that offering Saturday hours can generate enough extra billing to just barely cover the costs of that service.

CCBD has been able to implement and maintain the other aspects of the OMH model because it has negotiated payment structures that go beyond fee-for-service with two of the three big private payers in the Dallas-Fort Worth market (Aetna and United HealthCare), and it is in the process of negotiating such a contract with the third-largest local payer (Blue Cross- Blue Shield). It also participates in CMS’s Oncology Care Model program, which also pays for both performance and the provision of enhanced services. The government initiative pays practices $160 per beneficiary per month to account for the cost of extra services such as same-day appointments. It also gives them a chance to share in any savings that practices generate by keeping patients healthier or providing services more efficiently.

These contracts with payers are sufficiently outcome-oriented to support all aspects of the OMH model, but even they do not provide financial compensation for everything that CCBD believes is medically justified by both published research and their experience. “There is a huge amount of literature documenting the connection between good nutrition and good health during cancer treatment, and there are very specific strategies for eating well while undergoing cancer treatments. We try to get a sense of what patients are eating and refer those who struggle to maintain a good diet to our dietitian, who works with them to find a good diet they can stomach. The results of just a few visits are often dramatic, and we see the same for patients who have reason to visit the pain management specialist, the psychotherapist, and even the acupuncturist,” Page said.

Because payers refuse to pay for such services, CCBD must find alternative sources of funding. Wealthier patients can pay for them out-of-pocket. Those with more limited means are often covered by grants that CCBD receives from local and national philanthropies that seek to improve quality of life for patients with cancer.

CCBD’s wide range of support services enables the practice to differentiate itself from its only major competitor in the market, US Oncology. CCBD is significantly smaller than US Oncology, and it tries to overcome that by positioning itself at the cutting edge of oncology care—hence its early adoption of the OMH model. Russo believes that the practice’s commitment to staying ahead of the curve has allowed it to remain competitive over the years and that for independent practices, a focus on quality will serve them well as payment models continue the move from a fee-for-service base to fee-for-outcome.

“New payment models are already creating pressure for all types of practices to change what they do, and the changes are only in their infancy,” he said. “The better payers manage to align compensation with quality. It’s a real opportunity for smaller practices that can adapt faster than their corporate competition.”