We have been asked on numerous occasions why would almost 100 oncologists—with thriving successful private practices in New Jersey and many who have been in business for over 30 years&mdash;“give up their independence and identity in their community” and become part of Regional Cancer Care Associates (RCCA), a new entity with a single tax identification number?

The answer may not be immediately intuitive and in fact seems contradictory, but these oncologists joined together to maintain their independence and ability to deliver quality value based cancer care from their offices. Consolidation is happening everywhere in the new health care market where several macroeconomic forces are driving seismic change.

First, the overwhelming need to reduce unit cost of care and utilization of “unnecessary” care has created a tide that’s pulling all providers towards new geographically scaled delivery systems that will enable reductions in cost of service delivery and greater oversight of care utilization. Second, stability of the amount and reliability of reimbursement for services provided is deteriorating.

This instability pressures small (meaning limited in number and geographic coverage) independent providers to consider offsetting this risk by shuttling patients to larger and bettercapitalized providers.

Third, the increasing inability of small providers to influence decision making by larger care systems and payers leads small independent providers to give up their independence.

In cancer the problem is even more acute. With fewer people dying of cardiovascular and infectious diseases, and more cancer patients living longer with active cancer who require ongoing and ever increasingly expensive care, the rate of growth in the total cost of cancer care delivery is now thought to be unsustainable. While major breakthroughs of inexpensive interventions to prevent and treat early cancer remain possible, the current trajectory of cancer care cost growth has engendered a national discussion regarding controlling cost through limiting (rationing) access to care in general or attempting to eliminate unnecessary cancer care at scale.

RCCA was created to enable the latter approach, the so called Goldilocks formula—not too much care, not too little care, but just the right amount of care at scale. Those involved in the formation of RCCA understood that to have a measurable impact, RCCA needed to involve a large number of geographically dispersed oncologists (and their staff) to implement value based cancer care delivery at scale. Having a single tax identification number allows joining practices to maintain local managerial control and internal business agreements between partners and employed physicians. Centralized services are available to local divisions on a cost basis without any profit motive. To join RCCA physicians must agree to be focused on value based care delivery; however, RCCA delivers on its promise to maintain “local” practice independence.

RCCA was incorporated on January 1, 2012, from 10 existing and separate oncology/hematology practices distributed throughout the state of New Jersey representing care providers from every county. In 2013, RCCA added 3 additional practices in New Jersey and opened a Blood and Marrow Stem Cell Transplant program at the Georgetown MedStar University Hospital in Washington, DC, and now is expanding to include physician practices from other states.

RCCA currently includes over 100 boardcertified oncologist and advanced practice nurses supported by over 600 additional staff providing services from 26 locations throughout New Jersey and Washington, DC. With over 20,000 new patients (oncology and serious blood disorders) treated by RCCA physicians annually, and following one set of standards that are evidenced based and also accounts for cost of care, RCCA’s integrated care delivery provides a large number of patients access to care that is not redundant, has limited variance from the standard, accounts for cost using the most cost efficient care and access to an extensive array of clinical trials to avoid futile care.

As a first effort to demonstrate value-based care delivery at scale, RCCA launched evidencebased imaging guidelines that reduced excess imaging and had greater than 95% compliance. To encourage and repeatedly drive value based care delivery, RCCA physicians will track and report on clinical outcomes and cost of care by disease, segregated by histopathology/response to therapy, and implement relevant prognostic testing using software currently available to all RCCA care providers regardless of their EHR type.

To control cost and quality, transitioning from fee for service to at risk (bundled) contracts is being considered by payers across the country.

RCCA has created bundle products for most cancer types and subtypes and plans to aggressively market these products to payers. It is our belief that the best delivery system in oncology will be one that offers a defined product of services with predefined expected outcomes at a transparently fixed cost to patients and payers. In summary, being part of something larger than your practice does not have to come at the expense of your independence, as long as the change comes with a dedication to deliver value based oncology care.

Articles

We have been asked on numerous occasions why would almost 100 oncologists "give up their independence and identity in their community" and become part of Regional Cancer Care Associates (RCCA), a new entity with a single tax identification number?

Regional Cancer Care Associates Delivers Value-Based Care

In the debate over whether patientcentered medical homes (PCMHs) and accountable care organizations (ACOs) will lead to health care system savings, Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes, Memorial Sloan-Kettering Comprehensive Cancer Center, discussed at a conference recently hosted by T

how new payment models are challenging the current fee-for-service model for community care cancer centers.

“I’m going to try to look into the future and lay out what I think are possible trends to pay attention to,” he began. “I don’t think there’s any question that we’re in a phase of what business school professors would call ‘creative destruction.’” According to Bach, the old model of fee-forservice is eroding, and with this erosion comes opportunities for new payment models of care. As with any opportunity, there are threats as well.

For example, with the latest statistics emanating from The Community Oncology Alliance (COA) there is a general trend toward a shrinking network of care in the community setting, causing payers and providers to explore various risk-taking scenarios. Bach states that “Risk taking is one of the core ideas that everyone is looking at in the context of health care reform, in general, as well as oncology.” Says Bach, “Most care right now is fee-for-service,” which he describes as a no-risk situation. However, several other payment models being explored by payers and providers such as bundled payments, care management fees, integrated delivery or ACO models, and capitation, will introduce various levels of risk for both parties.

But of all the payment model options Bach referenced, he favors the bundled payment model most. “I’ve been pushing for complete bundling, a complete move to episode payment, for some time now.” As the discretionary purchasers of drugs, Bach would like to allow healthcare providers decide what's best. “Let them manage the variation in costs of drugs and things like that.”

As strong a supporter as he is for bundled payments, Bach thinks the appetite for something like that is very small right now, and he thinks that stakeholders are probably looking mostly at shared savings models, similar to ACOs, as the next step in care management.

The general thrust in oncology is to achieve savings outside of the drugs; and “The statistics are clear,” he said, “there is a lot of money being spent on hospitalizations, imaging, and advanced testing.” And data show that the possibility exists that patient-centered medical homes can reduce hospitalizations by a meaningful amount, but “The rumor is that the benefit is starting to plateau.”

In the state of Maryland, for instance, he said Blue Cross year-over-year reductions in spending from the patients’ medical home in primary care seem to be continuing, “but we don’t know how long that will compound. It seems in oncology, at least the practices that have been doing this the longest, have found a new normal.” The practices can redesign care to achieve savings and reduce costs.

With all the consolidation going on and the mergers of community practices, larger provider networks are forming, which is placing them in a position to take on greater risk. “There are practices seeking to get to scale so that they can have balance sheets that are substantial enough, have denominators of patients large enough, that they can start taking on more and more risk.”

Bach thinks that the general trend is to move risk to the place where the discretionary decisions are made, “and it’s not a question of if, but when.” While the larger networks of providers are in a position to take on greater risk, many practices are not in that size range. They may be one of a few providers in an area, which allows them to extract much higher rates of reimbursement. “So, this consolidation cuts both ways,” Bach said. Addressing the site-of-care shift, due in large part to the collapsing margins of drug reimbursement, Bach said, “We used to say 80% of care was delivered in the community setting. It’s now more proper to say it’s probably about 60%.”

He noted regarding the decline in drug reimbursement contributing to the site-of-care shift, “We used to be AWP [average wholesale price] and then went to ASP [average sale price] +6%. Sequester is causing the reimbursement rate to drop to ASP +4.2%, and any efforts to get that addressed have largely failed.”

340B drug discounts are also contributing to the site-of-care shift. “Remember,” he said, “the 340B program only goes to hospitals, it’s not for in-patient drugs, it’s for outpatient drugs in the hospital. So only the hospitals can benefit from 340B through their outpatient department.”

This has caused a huge distortion in the marketplace, he said, as the discounts allow hospitals to pay about 40% less for the drugs than a practice pays for them. And, according to Bach, the 340B program “has been steadily expanded to the point where now we have an unbelievable number, I think about one-third of US hospitals, maybe more than that, are now 340B eligible.

“These discounts are making the hospitals completely different players from doctor offices.” The discounts aren’t included in ASP, so hospitals are responding in a logical way.

“They are interested in acquiring ways to administer drugs and make a profit, so they are affiliating with practices. They’re buying the shelves of practices and hiring the doctors, and they’re also hiring doctors and purchasing their practices.”

Although multiple reports suggest that cancer care costs more in hospitals than in doctors’ offices, Bach suggests that there are problems with these reports. And that is that the findings are not risk adjusted to reflect just how sick the hospital patient is. The Avalere Report from 2012 has “no risk adjustment, no stage, no nothing.”

“So if you want to ask where is the potential for savings—where do we want to start thinking about bundles&mdash;where are there entities that could save money by getting lump sums for all the drugs they use?” Bach answers his question by saying, “You go to the places where there are huge profit margins.” And, in his mind, that means hospitals. “Hospitals have balance sheets and they’re getting fantastic reimbursements. So they’re exactly the ones to target for [savings].”

“I happen to work in a hospital…these are serious players.”

Peter B. Bach, MD, MAPP, discussed at a conference recently hosted by The American Journal of Managed Care how new payment models are challenging the current fee-for-service model for community care cancer centers.

Peter B. Bach, MD, Discusses New Payment Reform Models

Community oncology practices are at a crossroads despite the maturity of the marketplace. Running an efficient oncology practice is getting tougher and tougher, said Bruce Gould, MD, medical director at Northwest Georgia Oncology Centers in Marietta, Georgia.

“We deal with declining reimbursement— especially from Medicare and Medicaid. Practices just got a 30% haircut off of drug margins last year because of the sequestration cuts. There are continuous cuts, from 1 to 2% in the Medicare evaluation and management codes for physician services and chemotherapy administration codes,” said Gould.

Traditionally, oncology practices subscribed to the buy-and-bill model of drug delivery. Practices purchase the infusion-based or injectable therapies from drug wholesalers or group purchasing organizations (GPOs) that they administer to patients, rather than having these expensive medications dispensed through a retail or specialty pharmacy.

The practices store the medications as inventory onsite, administering directly to patients as needed. Practices then bill Medicare or private insurers, or collect copayments or coinsurance from patients. In the short term, it keeps the practice afloat and a steady stream of revenue flowing in. One study suggests that nearly 80% of an oncology practice’s revenue comes from the buying and billing of drugs.

However, the model does open the practice up to a certain amount of financial risk because inventoried medications can expire or too much medication can be purchased without being administered. The practice could end up with a stockroom full of worthless medication. Inadequate reimbursement from both public and private insurers is also a distinct possibility.

That’s where group purchasing organizations come in. More than drug distributors, GPOs can help practices “remain financially healthy by providing tools and technologies that optimize financial performance and maximize practice efficiency,” says Jeff Lovesy, vice president of Physician Office Sales for Cardinal Health Specialty Solutions. These tools include practice analytics, reimbursement, inventory management, and financial analysis.

One core benefit of a good GPO is its ability to offer value through pricing, according to Barry Fortner, PhD, president, ION Solutions, an AmerisourceBergen company.

Many factors contribute to a GPO’s ability to secure this value, including size of its membership, longevity in the market, and historical performance.

“The value of a GPO goes far beyond the pharmaceutical contracts offered by including additional services such as educational opportunities, nondrug vendor partnerships that offer value, convenient access for services and technologies, and the creation of a unified community of practitioners,” continued Fortner.

In addition, GPOs can help practices remain independent by providing “better pricing on drug purchasing and information about drug rebates. This leads to lower cost of goods and improved operating margins for the practice,” says Gould.

The expertise provided by the GPO can improve practice efficiencies so that “the practice can have more money to keep within the practice to help with the bottom line,” he adds. Gould points out that GPOs, while often obtaining better prices on oncology agents, can be the only source to purchase certain medications.

He readily admits that 5 or 6 years ago, like most oncology practices, “We focused on our IV business. As long as it was making a few bucks and paying for itself, we were satisfied.”

GPOs have grown in importance to community oncology practices, with two-thirds of practices having a relationship with both a primary and secondary GPO, according to an August 2013 survey

 by Kantar Health, an evidence-based decision support partner to pharmaceutical, biotechnology, device, and diagnostic companies (see

: Community Oncology Practice Distributor/GPO Affiliation).

Meadow Green, a consultant in the Commercial Strategies Group of Kantar Health, says that according to the survey, “The number 1 reason for choosing a GPO is contract pricing and purchasing programs. That’s what is driving practices to develop relationships with these entities” (see 

“In the current reimbursement environment,” claims Fortner, “being involved with a GPO is essential.” He says that “It is difficult to imagine a practice not being a member of a GPO.”

		Reducing costs and increasing cash flow

		Improving product access and reimbursement

		Driving practice efficiency and enhancing patient care

		Increasing physician education and engagement

The relationship between GPOs and practices isn’t just a one-way relationship, however. With more oncology practices merging with local hospitals and medical centers, which often have their own GPOs, the part of the market consisting of independent practices is shrinking and that is affecting GPO business as well.

Oncologists and hematologists in the buy-and-bill model are reimbursed for the office visit, the infusion service, and the intravenous drug itself.

“As more oral oncolytics become available—and assuming similar efficacy&mdash;oncologists will only be reimbursed for the office visit. The oral oncolytic gets adjudicated through the patient’s pharmacy benefit and the potential for payment will be lost to the oncologist,” says Lovesy.

Practices are adapting to the growing prevalence of oral oncolytics in a number of ways. These include starting, or expanding, their in-house dispensing pharmacy, partnering with retail pharmacies, and sending prescriptions to specialty pharmacies for dispensing.

“Oral oncolytics represent a real opportunity for practices, especially to offset areas in which we’re under-reimbursed,” said Gould. Lovesy added that “GPOs must position themselves to support the oral dispensing strategy that best fits the oncologist’s practice model, regional payer requirements, and patient mix.” Growing its in-house pharmacy dispensing service was Northwest Georgia Oncology Centers’ objective when it approached RainTree Oncology Services.

		Figure 1. Community Oncology Practice Distribution/GPO Affiliation

Gould says the company focused the practice’s attention on the pharmacy, where it hadn’t been before. Along with providing expertise on how to run a better pharmacy and how to provide better care for patients, the practice was able to “increase our capture rate so that oral prescriptions weren’t walking out the door and down the street.”

RainTree also staffed Gould’s practice with relationship managers, essentially pharmacists who had run other pharmacies in other practices. “They provide the expertise and focus on pharmacy operations to improve efficiencies and provide better patient care,” says Gould.

In the current legislative and regulatory environment, the pressures on oncology practices are mounting. GPOs are one way to keep practices viable.

“Some practices are drowning in administrative burden,” says Green. “A practice has to identify what its needs are. Practices can have primary and secondary affiliations to comparison shop on prices—drug prices or information technology. But the practice solutions that GPOs offer are robust and useful,” she continued.

The buy-and-bill model hasn’t completely gone the way of the dinosaur, yet.

“Oncology payment reform is evolving, and it’s early in its evolution. Many would like oncologists to move away from relying on drug margins to keep their practices afloat, replacing current reimbursement models with pay-for-performance type models. But I don’t see the buy-and-bill model going away and I don’t see the GPO model going away anytime soon,” said Gould.

		Figure 2. Important Services Provided by GPOs

		Percentage of Practice Managers Ranking Each Service (n = 56)

		Source: Kantar Health; Practice Manager Survey 2013—Q9.4 Which of the following services/attributes are most important to you in your current group purchasing organization(s) (GPO)? Please rank the top factor as 1 = most important, the next as 2 and the third as 3, etc.

		Akscin J, Barr TR, Towle EL. Key practice indicators in officebased oncology practices: 2007 report on 2006 data. 

Community oncology practices are at a crossroads despite the maturity of the marketplace. Running an efficient oncology practice is getting tougher and tougher.

Practices Look to GPOs Even as Reimbursement Cuts Loom

For oncology practices today, the keys to negotiating successful contracts are size and a willingness to contain costs while improving quality.

Having a large presence in a market helps an oncology practice demonstrate that it has the scale to serve a large number of patients. A secondary but related factor that drives success in negotiations with health plans is a willingness to move away from fragmented feefor- service contracting and to follow protocols. By following protocols, oncologists can demonstrate that they are controlling costs and improving quality.

The problem in many markets is that health plans tend to dictate contract terms, as oncologists and other physicians have seen in Tennessee recently. The Tennessee Medical Association has documented how health plans have been changing payment terms in mid contract, thus forcing many practices to accept these terms, says Yarnell Beatty, vice president of advocacy for the Tennessee Medical Association (TMA). For oncologists in Tennessee, drastic changes in contract terms have resulted in a big drop in payment just since the start of this year, he added.

“Health plans are so big and powerful that they have what amount to take-it-or-leave-it clauses in their contracts. These clauses allow them to amend contracts and the fee schedule at any time,” he says. As of last year, Blue Cross Blue Shield of Tennessee said it would cut what it pays to practices that have in-office pathology laboratories by 52 percent, and most large oncology practices have in-office labs.

Jeffrey F. Patton, MD, the CEO of Tennessee Oncology in Nashville, said his practice has been adversely affected by this change. “We couldn’t accept a cut of that size,” Patton says. “We have 80 oncologists working in 40 sites in Tennessee, and our size means we can refuse such unilateral changes.”

At each site where it delivers care, Tennessee Oncology needs an in-office laboratory. In addition, it has a central lab, Patton says.

“We need an analyzer at every site to check the blood counts before you deliver care, and we have a central lab to do chemistry analysis as well,” he says. “A cut of 50 percent would have been significant, and we were fortunate to have the size to reject that cut.”

Tennessee Oncology said it would not accept the cut, and because of its size and geographic coverage in the Volunteer State, it retained the contract, Patton says.

Small practices, however, do not have the market clout to say no to payers, Beatty says. The TMA supports legislation to prevent health plans from making unilateral changes in mid contract.

As of mid-March, that legislation was under consideration. “We just want some predictability for medical practices so that they will know what they will be paid during the year,” Beatty says. “We need this legislation to level the playing field, particularly for smaller independent practices.

“There needs to be predictability on the provider side so that they can be more efficient and know how much staff to hire and which services to deliver,” he adds.

Another important element when negotiating contracts with payers today is a willingness to move away from fragmented fee-for-service payment. Oncologists are just starting to get involved in negotiating shared savings and other payment arrangements with health plans. Just as size is important to controlling costs, these new payment methods are designed to provide a financial reward for keeping costs low and for improving the quality of care oncologists deliver.

To control costs and coordinate care more effectively, health plans are asking oncologists to participate in accountable care organizations and patient-centered medical homes. But progress in developing these arrangements for oncology has been slow, hampered by the complexity of cancer care.

While they recognize that fee-for-service arrangements need to be replaced and are interested in new forms of payment, oncologists remain wary of negotiations over new reimbursement models.

“Everyone understands that we need to develop a more value-based system that includes some risk sharing,” says Patton. “There are lots of discussions about new forms of payment, and new programs are being developed, but the vast majority of reimbursement remains as fee for service. Oncology is complicated and understanding where all the costs are is a challenge.

Practices are blind to hospital costs, and that’s the biggest part of the cost equation. For us to do a bundled payment or go at risk would be difficult until we fully understand hospital pricing,” he explains.

“To do that would require a lot of collaboration with payers because health care is fairly well behind other industries in terms of information technology. Without the right data and the proper tools to measure costs in real time, it’s difficult to do risk contracting,” he adds.

In order to negotiate favorable terms under these new payment arrangements, oncologists will need data on the full costs of care, including hospital and other costs that they normally do not see. Only then would they be able to trust the other parties involved in these negotiations.

“Once we have data we can start to come up with a solution together for how to do valued- based reimbursement for oncology,” he comments. In Tennessee, oncologists are just starting to have these conversations with payers.

Oncologist Marcus Neubauer, MD, medical director of oncology services with McKesson Specialty Health and the US Oncology Network, agreed, saying changes in cancer care payment have been slowed by the need for more data.

Nonetheless, Neubauer has seen that payers are starting to negotiate more sophisticated forms of payment that reward oncologists for delivering value, which health plans define as high-quality care that keeps costs under control.

Previously, Neubauer was in a private practice in Kansas City that was 1 of 5 oncology groups to adopt an episode of care payment system in 2010.

That practice, the Kansas City Cancer Center, contracted with UnitedHealthcare in a program designed to measure the effects of replacing feefor- service reimbursement. In the 4 years since then, he has seen more interest in moving away from exclusive fee-for-service payments.

“But oncology is an incredibly difficult specialty to attach bundled or episodic payments to. It’s not like cardiac, hip, or sinus surgery, where the care delivery is more uniform. If anything, cancer care is getting more heterogeneous with the expanding list of cancer-causing mutations and corresponding targeted agents,” Neubauer adds.

The cost of medications alone can complicate negotiations because one patient may be given a drug that costs $50 per month while another patient with a similar (but not identical) condition may receive a therapeutic regimen that costs $7000 per month, he explains. Another complicating factor is how patients are treated at the end of life, where care can be extremely costly, Neubauer says.

“For all these reasons, it’s very hard to say that a health plan will give an oncologist 1 payment for the treatment of any 1 type of cancer. Still, we need to get to value-based payment systems,” he said. Given these complicating factors, it might be best to begin a negotiation for an innovative payment program with radiation therapy because there is less variation in radiation oncology than there is in medical oncology, Neubauer adds.

The US Oncology Network has developed new payment models for radiation oncologists and is starting to build patient-centered medical homes (PCMHs) that would use fee-for-service payment to start and then shift to alternative payment models such as shared savings, he says.

A few oncologists have developed PCMHs and experienced some success negotiating favorable terms for these arrangements, notably Consultants in Medical Oncology and Hematology, a practice in Drexel Hills, Pennsylvania, that has a medical home and has contracts with a number of payers, according to oncologist John Sprandio, MD, who founded the practice.

In many settings, health plans require oncologists to follow care guidelines. The medical home model supported by McKesson Specialty Health and The US Oncology Network is called Innovent Oncology and encourages oncologists to follow protocols designed to improve patients’ overall health and decrease hospitalization rates and emergency department visits.

“With Innovent, we consider some risk-shifting models such as quality metrics and shared savings that are short of a bundled payment arrangement. Once we show that oncology care can be managed tightly at the provider level, we will be in a better position to negotiate a bundled payment model,” Neubauer says.

Under bundled payment, a health plan might negotiate a contract to pay for all care for a cancer patient for 1 year and pay that amount out every month over 12 months. Then at year’s end, it could continue the same payment or adjust the payment up or down depending on the patient’s level of illness. The oncologists negotiating such a contact would need to know all of their costs and may be responsible for paying for care in a hospital or other setting.

Therefore, getting fixed payments over the year would require the oncologists and everyone on the integrated care team to keep costs low and minimize costly complications.

Under such arrangements, oncologists may negotiate a clause that allows them to get out of the bundled payment arrangement if a patient develops catastrophic complications.

Experts believe such an out clause could be the difference between success and failure when caring for some patients because if cost exceeded the payments, the oncologist and the providers would assume those increased costs. But if all care costs are lower than the bundled payment, the oncologists and others on the care team would share the savings.

In Negotiations, Oncologists Find That Size Does Matter

Despite repeated attempts to pass a permanent fix to address Medicare’s sustainable growth rate (SGR) formula, efforts by lawmakers on both sides of the aisle have stalled again. So, it looks like another temporary patch will have to do.

The Senate passed the bill by a bipartisan 64 to 35 vote on March 31, which now heads to the president’s desk. The bill includes language to fix the SGR for 12 months and delay 

Industry stakeholders would have much preferred a permanent fix to the SGR formula, but most are in favor of a stopgap measure to prevent a 24% drop in Medicare reimbursement rates from going into effect on April 1.

The bill, HR 4302, calls for a 0.5% update through December 31, 2014, and a 0% update from January 1, 2015 through March 31, 2015. In addition, it includes a provision to delay the transition to ICD-10, which would prohibit the Department of Health and Human Services from implementing the transition at any point before October 1, 2015.

This legislative drama is playing out even as the US cancer care system is faced with the prospect of a dramatic increase in the number of patients with cancer, and proportionately fewer oncology specialists to treat them, the American Society of Clinical Oncology (ASCO) warned in a webcast on March 11.

During the webcast, led by ASCO President Clifford A. Hudis, MD, the group called for Congress to help stabilize payments to doctors under Medicare by repealing the SGR. The webcast also highlighted a landmark report released by ASCO, T

The State of Cancer Care in America: 2014

 highlights how oncologists are trying to adapt to a growing demand for services, changes in healthcare delivery systems, and to the economic pressures that small oncology practices face. Specifically, the ASCO report addresses the challenges faced by a shrinking oncologist workforce, the viability of the small and mid-sized practices in rural areas of the country, and quality and value initiatives to implement moving forward.

	Viability of Small and Mid-sized Practices

As a result of payment cuts and lowered reimbursement for chemotherapy agents, ASCO says smaller practices, which consist of 1 to 2 physicians, are becoming increasingly rare. As the primary source of cancer care in small towns and rural communities in the South and West, this trend will make access to local high-quality, personalized treatment burdensome to patients.

In 2013, the ASCO National Oncology Census noted shifts in the characteristics of oncology practices, notably changes in practice size, the number of affiliations between practices and other entities, and a wider array of physician specialties housed within each practice. The census was fielded in 2012.

The census data suggest that oncology practices as a whole are growing larger and that smaller practices (consisting of 1 to 2 physicians) are becoming increasingly rare (see 

What’s fueling the decline in the number of small and mid-sized practices are recent cuts to Medicare physician payments and other factors. These practices, concentrated in the South and West, serve more than one-third of new patients, according to ASCO’s research.

ASCO is concerned because these smaller practices are often the primary providers of cancer care, enabling people to receive high-quality, personalized treatment that’s close to home.

		Figure 1. Size of Practice as a Proportion of Total Respondents

		Source: American Society of Clinical Oncology. The State of Cancer Care in America: 2014. Reprinted with permission

Carolyn B. Hendricks, MD, a solo practice medical oncologist in suburban Maryland said during the ASCO webcast that, for the first time, she couldn’t afford to treat her patients in her office but had to send them to the hospital to receive their infusion therapy. “My patients were very surprised to see the out-of-pocket costs associated with receiving treatment in a hospital,” she said during the webcast.

Her practice faces a daunting future because of the increased cost of chemotherapy drugs and the lowered reimbursement paid by the Centers for Medicare & Medicaid Services, a practice sometimes referred to as “buy-and-bill.”

“Giving chemotherapy is expensive,” she said. “My practice has lost revenue and has to purchase chemotherapy on credit and then scramble to be reimbursed adequately.”

Years ago, the buy-and-bill model was lucrative. That’s quickly changing as higher priced drugs and lower reimbursement affect the viability of small practices, leaving them with 4 possibilities: purchasing another practice, selling the current practice, merging with a larger practice or hospital, or closing the practice entirely.

If more small practices close, it will have an effect on workforce shortages, says the report.

ASCO estimates that by 2025, the demand for oncology services will grow by 42% or more, while the supply of oncologists will grow by only 28%. That translates to a shortage of more than 1480 oncologists by 2025.

Like most clinical care workforces, medical oncologists are growing older as a group. In 2008, the proportion of oncologists aged 64 years and older surpassed the proportion under 40 years of age, according to the report.

That age gap is expected to grow wider, the report said, since medical oncologists tend to be slightly older than the general physician population.

The American Medical Association (AMA) identifies about 13,400 physicians in the United States who specialize in adult medical oncology and/or hematology. Separately, Medicare’s Physician Compare database identifies 11,300 medical oncologists and hematologists/ oncologists who treat Medicare-eligible patients (see 

). The report does highlight an encouraging finding: subspecialty growth in overall numbers appears to be driven primarily by increases in the hematology/oncology and medical oncology workforce (see 

). However, the number of gynecologic, pediatric, and radiation oncologist subspecialists is relatively flat.

		Table. Numbers of Physicians in Oncology Specialties

		Source: American Society of Clinical Oncology. The State of Cancer Care in America: 2014. Reprinted with permission.

Such pressures on the oncology workforce could not come at worse time, however. Although advances in treatment and screening have produced a decline in cancer deaths in recent decades—with 13.7 million survivors in the United States&mdash;the number of newly diagnosed cases of cancer is projected to increase by as much as 42% by 2025.

To improve the quality and value of cancer care, and somewhat lessen the impact of workforce shortages, ASCO data show that practices appear to be increasing their use of advanced practice nurses and other nonphysician providers.

In addition, ASCO and many practices are exploring new payment and delivery models that reward high-quality care, reduce administrative burden, and pay practices better for the services needed by patients with cancer.

ASCO is recommending the development and testing of new care delivery models and payment models, ending persistent financial threats, and repeal of the SGR. The group also recommends greater use of physician-led quality initiatives such as ASCO’s Quality Oncology Practice Initiatives (QOPI) and the CancerLinQ learning system that is currently under development and will provide oncologists, regardless of geographic location, personalized guidance and real-time quality feedback to improve patient care.

Offered as a free program to ASCO members, QOPI is an oncologist-led, practice-based quality assessment and improvement program.

		Figure 2. Numbers of Oncologists (MDs and DOs)

		Source: AMA Masterfile and The American Society of Clinical Oncologists. The State of Cancer in America: 2014. Reprinted with permission.

The program integrates measures developed by practicing oncologists and quality experts, and spans the continuum of cancer care. The measures, which are reviewed and updated annually, are based on clinical guidelines, published studies, and collective expert consensus— ensuring that emerging science and new clinical recommendations are considered by participating practices without a significant research-to-practice delay.

The ASCO CancerLinQ initiative is focused on building a “learning health system” composed of a knowledge-generating computer network that will collect and analyze cancer care data from millions of patient visits and expert guidelines— and feed that knowledge back to providers at the point of care. In this way, CancerLinQ will support greater consistency and quality in practice&mdash;and speed progress in developing new or better treatments.

The CancerLinQ prototype featured the following core functions:

		Acceptance of any cancer care data, in any format, directly from electronic health records and other sources, overcoming the long-standing hurdle posed by inconsistent health data standards.

		Generation of individualized guidance on the care of any given patient with breast cancer based on automated, machine-readable versions of ASCO expert breast cancer guidelines. The full CancerLinQ system, when implemented, will also provide guidance based on the collective experiences of other similar patients.

		Access to and exploration of a database of information on the care of patients with breast cancer—including patient characteristics, treatments, and outcomes&mdash;to identify real-world trends and associations and new hypotheses for research.

		Feedback on physicians’ performance against quality measures from QOPI.

“The US cancer system is among the best in the world, but it cannot continue to meet the growing needs of patients unless fundamental, systematic change is pursued,” Hudis said at the conclusion of the webcast.

Despite repeated attempts to pass a permanent fix to address Medicare's sustainable growth rate (SGR) formula, efforts by lawmakers on both sides of the aisle have stalled again. 

Permanent SGR Fix Falters, ASCO Issues Cancer Report

Chief Innovations Officer, Professor, and Vice President of Cancer Services

		John Theurer Cancer Center at Hackensack University Medical Center

President, Regional Cancer Care Associates, LLC

The current state of affairs in oncology care reimbursement is in flux, with the promise for dramatic change. It is hoped that change will foster value-based oncology care delivery, avoid the need to ration care indiscriminately, and allow for continued discovery and advancement. Good luck!

Why would we take something as complex as oncology care and tackle cost control through a new reimbursement strategy? The need to control the growth rate of cost in oncology is undeniable. The cost “problem” has been created, in part, by our cardiology colleagues, who by their collective success have done a good job of preventing premature death from cardiovascular disease, and by our own efforts in extending progression-free survival and overall survival. As more patients with cancer receive therapy that is increasingly expensive, with new drugs and technology that improve outcomes but compound costs, the need to impose controls increases.

The second issue—moving reimbursement toward at-risk bundling&mdash;may not be as clear. In short, if providers risk financial loss for overutilization and are rewarded for proper utilization (not underutilization), this approach may help to control costs and preserve quality.

Implementing change of this type at scale, however, is fraught with major practical challenges, including but not limited to different electronic health record (EHR) systems, lack of standardization of diagnostic/prognostic up-front patient characterization, and lack of standardization of outcome reporting, including incidence and severity toxicities, delivered dose intensity, and clinical efficacy outcomes. Simply stated, the goal is to avoid the need to indiscriminately ration care and instead follow the Goldilocks formula— not too much care, not too little care, but just the right amount of care at scale.

Why would providers of cancer care want to do this? Well, moving from claims-based to claimless reimbursement and eliminating precertification authorizations are 2 good reasons to start. If only it were this simple. Again, good luck! With the rapid move to more personalized medicine driven by genomics and the more frequent approval of new and expensive agents and technologies, it becomes imperative to slow down rising healthcare costs.

To solve complex problems, one must look for least common denominators. To that end, oncologists need to use the language of oncology and genomics (ie, not ICD-10), so results of the comparison of clinical and cost outcomes between patients and between providers is the result of clinical intervention, and not reflective of the starting population.

Next, outcomes assessment must be defined and standardized nationally. The good news here is that the FDA drug approval process provides standard definitions. Doctors and nurses are spending the majority of their time on data entry as the use of EHRs grows, so the solution must avoid double data entry requirements. Software is now available that can facilitate patient sorting and outcomes tracking. Evidence-based standards for treatments are readily available to oncologists, so packaging care into “bundles” is doable, albeit tedious. Underutilization needs to be tracked and guarded against.

In sum, payers and providers appear able and ready to move forward and test at-risk bundles where the total cost and service provided is fixed up front, transparent, and tied to achievable outcomes. At-risk bundles hold promise because rationing is avoided. This payment model will drive savings through repeated outcomes tracking and reporting. Now all we need to do is to get started. Good luck!

Enabling At-Risk Bundled Oncology Reimbursement: Why, When, and How

Cancer is challenging in many ways. Trying to contain the costs of disease management may be the biggest challenge of all.

For a patient without cancer who simply needs a hip replacement, for example, the surgical procedure is the same whether the patient is a 25-year-old tennis player or a sedentary but elderly 70-year-old.

“There are variations in care, as well as comorbidities such as whether the patient is morbidly obese or is positive for hepatitis C,” said Jay Sultan, the chief product portfolio architect for the TriZetto Corporation, a health care IT company headquartered in Englewood, Colorado.

“But overall, the evidence-based guidelines are well established and the outcomes are much simpler. There is less reason for warranted variation in care.”

But for the patient diagnosed with any kind of cancer, it’s not so straightforward. “Cancer is not the same for everyone,” said Matthew Farber, MA, the director of provider economics and public policy for the national Association of Community Cancer Centers, based in Rockville, Maryland. “What works for one person doesn’t necessarily work for another.”

It’s not just cancer itself that’s complicated— treatments can be, too. With the development of targeted therapies over the past few years, as well as differences in the genetic development and stage of the disease, a patient who learns she has breast cancer may have one of 25 variations of that particular cancer. Determining how to treat patients and keep spending down, in light of spiraling health care costs, is paramount.

Different payer models and concepts have emerged as an alternative to the traditional fee-for- service method, which reimburses physicians for whatever treatment they prescribe; it is based on the quantity of care. Collectively, these alternative models focus on value, as insurance companies pay physicians for following particular standards of care. They include treating via clinical pathways (standardized treatment plans for particular diagnoses), establishing accountable care organizations (ACOs) (practitioners being paid based on saving money and having their patient outcomes meet certain quality standards after receiving medical care), and bundled payments (payers paying based on specific medical episodes and expected costs of those episodes), among others. There’s a lot of overlap, notes Farber.

“Many of these have pieces similar to others, and providers are keeping a close eye on all of them,” he said. “It’s not as if we operate in a vacuum.” What does this all mean for the community oncologist trying to navigate the changing landscape?

Physicians shouldn’t ignore how payment reform is affecting the world of oncology, said Farber. “While there’s lots of waiting to see how different payer models will play out, we tell our members that ‘sticking your head in the sand’ and doing nothing is not an option,” he said.

Doing so will only ensure that change will continue around you and leave you behind. As an example, Farber said that an oncology practice in one state may decide not to join a local ACO when approached to do so. But that practice may find that local primary care physicians involved in that ACO will refer their cancer patients only to oncologists in the ACO network, “even if the non- ACO oncologists have a prior relationship with those patients,” he said.

So what can oncologists do when faced with changing trends in how their work is reimbursed by insurance payers?

Leonard A. Kalman, MD, has some insights. As the chairman of Advanced Medical Specialties in Miami, Florida, Kalman’s group has been involved as a partner in an oncology- specific ACO with insurer Florida Blue and Baptist Health South Florida for the past 1½ years as part of a 3-year program. As reported on 

December 2013, Kalman said the ACO had a —2% trend in its first year, a change from an annual 10% increase up until the year before the pilot began.

As a shared savings program, the ACO operates on a fee-for-service basis, but the partners share any savings as long as quality criteria are met. In the December Onclive.com article, Kalman admitted that he wasn’t sure exactly where the savings had come from, though he suspected that a reduced per member per year spend on chemotherapy was a major source in the first year. In the second year, there are plans to focus on reducing hospital admissions, especially toward the end of life.

More recently, Kalman said he believes this kind of “total cost of care” model, rather than bundled payments, will be the key mode of payment reform in oncology. “Management of an attributed cancer population, initially with fee-for- service, then evolving to shared or full risk, is the road I really think is best,” he said. But bundled payments are attractive to insurance companies, Farber said, because they provide predictability. “You know, for 6 months of treatment, I’m going to have to pay $X. Payers really do crave predictability. However, that is a very difficult trade-off to ask of providers.”

Having oncologists take on a “population management” mind-set is a culture change that takes education, discussion, and time, Kalman said.

With the model he is working with, “Physicians aren’t threatened as they learn to manage a population, because they are initially getting fee-for-service with a shared savings component. When they become competent to manage a cancer population, they become a very attractive partner to hospital systems, to employers, and to insurance plans,” he said.

Using electronic medical records that embed chemotherapy pathway regimens, based on considerations of efficiency first, toxicity second, and cost third, is a key component of cancer population management, Kalman said.

Hiring a separate team of physicians and mid-level providers to provide “supportive care” to patients with metastatic disease, simultaneous with their active therapy, is another important point, Kalman said. It’s also important to be proactive to avoid unnecessary admissions by designating personnel who are available at all hours to triage calls from patients, he added.

Many stakeholders are looking forward to seeing the results of a bundled payment plan between UnitedHealthcare and 5 cancer centers across the country that began in 2010. Lee N. Newcomer, MD, MHA, the senior vice president of oncology, genetics and women’s health at UnitedHealthcare, said in an e-mail that the final results of the 3-year study were done and in press; he could not comment on the results prior to publication. The physicians involved in the study, however, worked together as they worked in a bundled payment model instead of the more traditional fee-for-service. “The process was very collaborative,” he said. “We shared data and insight throughout the entire program.” Insurers debating a similar move should consider working in the same way with physicians: “Open transparency with information is critical,” he said.

In a 2013 report titled “Tying Payment Incentives to Quality Measurement” published in the Journal of Oncology Practice, Newcomer and colleagues wrote that “The standardization of processes is difficult” and that due to the small sample size of 175 patients with breast, colon, or lung cancer that were studied, “The primary question about this project—‘Does it lower the cost of cancer therapy?’&mdash;could not be answered yet.”

Echoing Kalman, Newcomer also wrote about the importance of leadership, as “It took a tremendous effort for each medical group to choose and commit to a single regimen for each episode.”

And finally, Newcomer noted that making a change to a different payer system is, frankly, a lot of work: “It is, however, a daunting task to correctly identify the patients, to change the billing systems for these patients, and to adhere to the selected regimens. The medical groups expend substantially more administrative effort for each patient to participate in this program and these costs were not measured in the initial effort,” he wrote.

The report concluded by noting that “The episode payment program has taught participants methods for measuring performance. Outstanding performance can be rewarded with multiple payment methods. The most important lesson from this program has been that collaboration with data and measured performance are possible for cancer care.”

Newcomer’s study echoes Kalman’s advice about changing payment models. “Everyone—the oncology physicians, their staffs, the insurers, and the hospital staff&mdash;has a day job already. Managing a cancer population to achieve the “triple aim” takes additional full-time employees and careful planning, said Kalman.

Also, change doesn’t happen quickly. “These programs, to be successful, take time and should be years in the making to achieve optimal results. It’s all a work in progress,” he said. But how do you measure success? “Ultimately, cost control is key, but one must maintain or improve quality, and achieve high rates of patient satisfaction,” he said.

Finally, when considering partnering with others to create an oncology-specific ACO or other payer model, find like-minded people and organizations who share your values, said Kalman.

“Pick your partners carefully—make sure you all have aligned goals,” he said.

Transforming Oncology Payments From Fee for Service to Value

A physician’s confidence level in his genomic knowledge plays a significant role in attitudes towards genomic tests, especially in tests that look for changes in DNA that are taken from patients’ tumor samples, according to research from the Dana-Farber/Brigham and Women’s Cancer Center (DF/BWCC).

Physicians who are confident in their ability to interpret and explain the findings to patients were more likely to want to prescribe the test and consider using test results when making treatment recommendations while physicians with lower levels of genomic confidence were less likely to offer the testing, according to the research. Stacy W. Gray, MD, AM, who is the first author of the report, said 42% of responding oncologists approved of telling patients about test results even when their significance for the patient’s outlook and treatment is uncertain.

“The fact that we found so much variation in physicians’ confidence about their ability to use genetic data at a tertiary care National Cancer Institute-designated comprehensive cancer center makes us pause and wonder about how confident physicians in the community are about dealing with this,” said Gray, a thoracic cancer physician at Dana-Farber. “It begs the question at a national level, how are we going to make sure that this technology for cancer care is adequately delivered?”

The researchers report that 160 medical oncologists, surgeons and radiation oncologists participated in a study that asked participants about their current use of somatic testing (ie, testing patients’ tumors for known mutations one at a time), their attitudes about multiplex testing, and their confidence in their ability to understand and use genomic data. The survey did not include a direct test of the physicians’ knowledge. Results of the survey showed that 22% of doctors reported having ‘low confidence’ in their knowledge about genomics. When queried about their knowledge and their ability to make recommendations based on the test results, 14% said they lacked knowledge about how to explain the concepts to patients, and 26% doubted their ability to make treatment recommendations.

Physicians who participated in the survey said they ordered tumor genomic testing for an average of 24% of patients and only 18% of the participants planned to use multiplex tumor testing “infrequently.”

A physician's confidence level in his genomic knowledge plays a significant role in attitudes towards genomic tests, especially in tests that look for changes in DNA that are taken from patients' tumor samples

April 2014 | Oncology Business News®