Over the past 3 years, there has been a growing chorus of complaint about the rising costs of medications, particularly in oncology. Now that we have topped $3 trillion in national healthcare expenditures—against a gross domestic product of $19 trillion&mdash;nearly everyone agrees that we should change the cost curve so that it trends downward. That is easier said than done, because we are all going to live longer and need more healthcare.

In place of a system reboot, one approach has been to cut the cost of individual components of care. Physicians know all too well how this has gone for them. When accounting for inflation, oncologists have seen a steady decline in their compensation per unit of service, compounded by the perverse system of marking up drug prices instead of compensating physicians more directly for their skill and knowledge of how to choose, administer, and monitor drug delivery in the cancer setting. This has controlled the cost of care, but has it improved it?

Now the Medicare Payment Advisory Commission (MedPAC) is recommending that CMS establish a competitive pricing program for Part B drugs. Under MedPAC’s proposed Drug Value Program (DVP), a limited number of third-party vendors would negotiate with manufacturers to set lower prices for drugs.

Participating providers could obtain those drugs at the reduced rates, paid by CMS, and receive a small administrative fee. There is also a chance that participating physicians could share in the savings generated by the DVP. Once again, physician compensation would be tied to drug utilization, but there would supposedly be less incentive to prescribe costly drugs—in theory, more savings and more income.

However, one wonders if, under this system, less expensive and possibly less effective therapies could lead to more income. If so, we would have the inverse of the perverse incentive that currently exists. I believe that most physicians appreciate and agree with the need for profit in drug and biologic discovery.

However, few, if any, oncologists would agree that their compensation should be based on the cost of drugs. It takes the same skill, education, and time to care for patients whether they receive less expensive or more expensive medications.

Do we really want our physicians considering drug cost in their treatment decisions? Which is their higher duty: the obligation to provide efficacious therapy for their patients or the obligation to society, as citizens, to control healthcare costs? There are no easy answers here. I and others believe that the way forward is to change the focus of the system of reimbursement. The movement from fee for service to bundles and payment based on outcomes potentially creates alignment for all stakeholders. The market is malleable now, and the need for change will not abate. We have the opportunity to correct the system, and we should not stop until we succeed.

Articles

Over the past 3 years, there has been a growing chorus of
complaint about the rising costs of medications, particularly in
oncology.

MedPAC's Drug Price Solution May Be a Problem in Disguise

There is a lack of hard data on practice performance that makes it difficult to understand where to make improvements so that goals under the Oncology Care Model (OCM) can be reached, 2 administrators told a recent audience of oncology professionals. However, with the information that is available, it is possible to achieve positive changes and even a spirit of friendly competition, they said.

“We have seen very meaningful changes,” said Alti Rahman, MHA, MBA, CSSBB, practice administrator for Oncology Consultants of Houston, who described having instituted monthly staff meetings at which CMS data regarding practice performance on OCM quality measures was discussed. Wherever results could be measured it has been possible to make headway. “The areas that we’ve struggled with are the areas that we’ve had difficulty reporting on,” he said.

Rahman shared the podium with Anne Marie Rainey, MSN, RN, CHC, compliance and control officer for the Clearview Cancer Institute of Huntsville, Alabama, at the 2017 Community Oncology Conference for the Community Oncology Alliance. Already, the OCM has injected more clinical value and efficiency into practice activities, Rahman and Rainey agreed. Care has become more patient-centered as their practices have broadened mental health and advanced care initiatives. Interdepartmental communications also have improved, and unnecessary use of hospital and emergency departments (EDs) has been reduced.

Earlier this year, CMS released what practices have described as an extremely useful cache of information about claims data, not just from their own clinics, but from their market area. This has enabled practices to understand much more about what is going on with their patients. Rahman said practices are hungry for more of this data and would like CMS to provide regular installments. “We’ve had an iteration of it, and we need more.”

Despite its usefulness, the mass of data needs to be scrutinized and picked apart carefully to arrive at meaningful insights that could actually point to ways a practice could improve its operations, Rahman said. “Even though you have 10 patients admitted to a certain hospital at a rate of $50,000 each and another hospital has 5 patients at a rate of $500,000, that’s still a very surface-level view.” Rahman’s practice has partnered with analytics companies to help with the job of interpretation.

Reporting data to CMS also has been a challenge for practices. They have had to employ new software and synchronize that with established practice management systems that often “don’t play nice” with other technology, Rainey said. Sometimes a software system will deliver an unexpected benefit, however. For Rainey’s practice, the capabilities of a patient portal system enabled her to review patient lists and spot information gaps that wouldn’t have been acceptable to CMS. “You never know what to expect the first time you go to submit that quality data. It was a really big deal for us, just knowing that that system worked. We were able to validate the data and submit it relatively easily,” she explained.

Better Results on Advanced Care Directives

Administrators at Rainey’s and Rahman’s practices were hesitant to go out and acquire new software management systems to help with the OCM transition. “There was so much change already going on. I cannot imagine starting the OCM and trying to change the system at the same time. That would be very stressful,” Rainey said. It was better to find a “middle ground” between old and new than start out afresh with all-new software, Rahman added.

Completion of advanced care directives became a prime target for improvement at Rainey’s clinic. Practice administrators knew already that this element of patient-centered care had been deficient because staff often felt uncomfortable discussing these issues with patients. They also recognized this as an area in which they could make definite and measurable improvements.

Previously, “Only about 1.5% of our patients had a DNR (do not resuscitate) status documented in a structured field in our electronic medical record,” Rainey said. “I’m really proud to say that we now have about 75% to 76% of our Medicare patients consistently documented. That’s just one area where it’s really opened the door for us to have to ask patients about something that maybe is uncomfortable for the staff member.”

As part of this effort, her clinic created handout information to answer patients’ questions about advanced care directives and other end-of-life decisions. The practice has also been screening for depression more actively, with the result that it has identified patients who could benefit from social workers or psychiatrists. They’ve also worked with physicians to make sure these patients’ needs are being addressed. “Had it not been for OCM requiring it, we probably wouldn’t have taken that strong a stance on getting it done,” Rainey said. Because of the need to coordinate the various elements of cancer care more successfully under the OCM, efforts have been made to improve communication between staffers, and this has been done successfully, Rahman said.

“There are so many areas of a practice that need to be managed, from billing and contracting to compliance and clinical operations. It’s created an environment where we have to come together and look at how patients are treated from all those different perspectives.”

Rainey agreed that, in her practice, departments that hadn’t worked together very well before have begun coordinating well. “I think that seems to be a huge win for everybody. There has been a higher level of communication.”

Patients have demonstrated that they are clearly interested in the OCM and how it is going to affect their care. At Rainey’s practice, a notification letter was sent out to patients to bring them up to speed on the transition and what it signified. They got about 60 phone calls from patients in 2 days, with a lot of questions, mostly about whether patients would still be able to see their accustomed doctor. “Since then, the more they have seen of their care plans, the more they like this,” Rainey said. Patients also like that medical assistants and practitioners are taking more time to explain things to them and reach out where needed.

Rahman said that a concern in his practice was that the information needed to explain the OCM would be too “dense” for patients, so they put together an video that would explain things in a way that wouldn’t confuse or overwhelm patients who already were laboring to understand their personal care and cope with the rigors of treatment.

Rainey’s practice has studied phone calls and patient navigation efforts to figure out what could be done to reduce the number of patient hospital stays and ED visits. The clinic found instances where nurses told patients to go directly to the ED. To improve direction, the practice established triage pathways for such conditions as nausea, vomiting, and diarrhea; more are pending. “We’re trying to make some changes based on what we’ve seen, but we’re also hoping to engage with some data analytics companies to pull out a bit more information, because it is a great deal of data,” Rainey said.

Despite the need to reduce unnecessary trips to the ED, Rainey’s practice decided that extending clinic hours would not have made a significant difference. The clinic was already open from 7 AM to 6 PM Monday to Friday, and most ED visits occurred during the regular workweek. “For us, it didn’t make sense to extend the time frame there,” she said. What was really happening was patients were heading for the ED without first calling the clinic to indicate that they weren’t feeling well. To counter this, Rainey’s practice decided to initiate a “call us first” campaign.

Finding Ways to Improve Patient-Centered Care

Rahman’s clinic already had weekend hours, but expanded to after-hours access on weekdays. The clinic made it easier for patients to reach out to providers and made a habit of continuously communicating the availability of staff to overcome the patient perception that after regular clinic hours “their best option for medical attention is an ED.” This information is sent to patients in e-mail notifications and is made available on the practice portal.

Rainey said her clinic hopes to establish outpatient palliative care by partnering with a local hospital. Although “that could be potentially really beneficial for our patients, one of the concerns is that the move may worry some of the other providers in their market space. For example, they have a clinic near a hospital, but the palliative care program they want to initiate would be with a competing hospital.

With so much at stake in the process of transitioning to the OCM, practices want to avoid making mistakes that will turn out to be costly. Rahman’s clinic is looking for ways to monitor its progress toward achieving CMS quality goals. Such information could serve as an early warning that a coarse correction is necessary. This would enable an intervention that would avoid a unpleasant surprise at the end of a reporting period.

“The OCM is an opportunity to demonstrate and bring to light all of the things that we’ve known all along about efficiency and quality of care,” Rahman said. “We don’t want to find out toward the end of a measurement period whether we were positive or negative. We’re trying to develop an interim way to track progress to see what we need to do to stay at a positive performance level.”

As advice to others involved with the OCM, Rainey recommended involving key stakeholders early in the process to ensure that OCM changes are supported. “That’s huge. There are still many people who don’t understand what this means.” She said good communication and the ability to accept constructive criticism will benefit a practice. “If you incorporate those 2 things, I think you have a really great foundation to make things happen in a way that is really going to be sustainable.”

Rahman recommended that practices have a clear understanding of the benefits they expect to receive from whatever processes they initiate. “If you can’t get data out of it, then you really don’t know the validity of it.” It’s important to anticipate the propensity for staff members to forget and fail to carry out objectives, he added.

An audience member who said she worked for Cigna asked whether physicians in Rainey’s and Rahman’s practices were engaged with the OCM and had changed their styles of practice at all. Rainey responded, “Some are trying to do this right, and others still don’t understand the importance of the change that is taking place, and they’re still practicing how they would have practiced. I think that’s a challenge for us. We have our work cut out from that standpoint.”

Rainey added that monthly performance reviews with physicians at her practice have created a spirit of friendly competition. “They can see that ‘Dr X is 100% on everything, and I’ve got some work to do.’”

There is a lack of hard data on practice performance that makes it difficult to understand where to make improvements so that goals under the OCM can be reached.

The OCM Has Been Challenging, But Effective

Research shows that market dominance can improve revenue margins, but Cancer Care Northwest (CCNW) demonstrates that it can also benefit patients in sparsely populated areas.

Four decades ago when CCNW was one of more than a dozen cancer care providers in eastern Washington state, none of the regional independents was large enough to provide a comprehensive range of treatments, so patients with unusual tumor types often needed to drive more than 4 hours west for care, over the Cascade Range, to one of the Seattle area’s large hospitals.

Since then, CCNW has increased its market share in eastern Washington to more than 75% and achieved similar dominance in northern Idaho and part of western Montana. That patient volume supports 12 medical oncologists, 8 oncologists, 8 radiation oncologists and 7 surgical oncologists—many of whom specialize in particular tumor types. Together, they can provide patients with every mainstream cancer treatment except proton beam therapy and autologous stem cell transfer, all in a region where the largest city has just over 200,000 residents.

“We still bleed a few patients over to the west side [of the Cascades], but not many. There simply isn’t much they can do in Seattle that we can’t do here. Not only do we offer all the treatments, we also get the patient numbers we need to develop expertise in providing those treatments,” said practice president Jason Call, MD, a radiation oncologist who treats patients at CCNW’s North Spokane Clinic.

The practice that is now CCNW began operations in 1975, when a single medical oncologist named Turner Woods hung his shingle in Spokane, Washington. Woods took on a handful of partners over the following decade, all of them medical oncologists, and then joined the organization that became US Oncology, a Texas-based company that provides management and back-office services to cancer practices. It was during those years that the practice consciously decided to become a comprehensive cancer care provider. It first added 3 radiation oncologists and its first linear accelerator. A few years after that, it added a surgical oncologist and the gynecological oncologist, both of whom had been operating in independent practice in Spokane.

About a decade ago, the partners in the practice decided they could improve their business by becoming truly independent, so they left US Oncology and hired Warren Benincosa, MPH, to run the operation. However, Benincosa’s tenure as CEO nearly turned out to be very brief. Soon after he arrived, hospital chains around the country began snapping up independent oncology practices and the 2 local chains reached out to CCNW and expressed a strong interest in purchasing the practice.

After 14 months of negotiations, Providence Health and Services and Community Health System both came through with serious offers, but the partners ultimately decided against selling. Their analysis of the market suggested they could become the region’s dominant cancer care provider without backing from any hospital. Their strategy: help the practice by helping all types of patients. During the US Oncology years, CCNW used a complicated algorithm for ensuring that treatment of patients without adequate insurance was kept to a minimum. The US Oncology algorithm was so conservative that the practice turned away a substantial percentage of potential patients. This engendered ill will and ended up hurting the bottom line.

“One of the first phone calls I received when I came to work here was from a primary care physician who said he would never refer another patient to us. He wanted to partner with oncologists who would care for all of his patients, so if we wouldn’t take the poorly insured patients, then we weren’t going to get the well-insured ones either,” Benincosa said.

“Shortly after I reported the conversation,” Benincosa added, “the partners decided on a fundamentally different approach. We have since gotten the algorithm down to a single question: do we treat this patient’s condition? If the answer is yes, we accept the patient, regardless of ability to pay. There was some concern initially that such a policy could bankrupt the practice, but extra business from well-insured patients has offset extra business from uninsured patients, and we are thriving financially.”

Because patients who don’t have appropriate insurance can constitute a drain on practice finances, CCNW employs financial navigators who work to obtain government assistance, charity care, and drug subsidies that bridge the gap between what patients can and can’t afford. These counselors cannot find enough dollars to fully cover every patient—CCNW contributes about $1 million in charity care per year&mdash;but a high percentage of uninsured patients do qualify for enough financial aid to cover the cost of caring for them and prove the old algorithm wrong.

Higher patient numbers also increase CCNW’s market share, which gives the practice a stronger position when it is negotiating compensation with private payers. Turning poorly insured patients away boosted the patient rosters of competing organizations and gave those organizations more leverage with payers. Now that CCNW controls more than 75% of the market, the practice has given payers little alternative but to offer better payment agreements. Finally, higher patient numbers also enable the practice to fulfill its mission of providing comprehensive cancer care across a large geographic region that has fewer people than the island of Manhattan, which had 1.6 million in 2014. The practice now sees enough patients to support all the personnel and equipment needed to treat all but the rarest tumor types.

To achieve growth and stability, the practice also needed to align itself with one of eastern Washington’s 2 big hospital chains to cement its control over radiation treatment services and thus be able to fully integrate its offerings to patients. CCNW made a proposal to Providence Health Services, the hospital network that had once sought to buy the practice. Providence would abandon its radiation oncology business and, in exchange, CCNW would give Providence a share of its radiation oncology profits. The offer was tempting enough to secure both a quick deal with Providence and a call from Idaho’s Kootenai Health, which wanted (and got) the same arrangement with CCNW.

The deal, formally expressed as The Alliance for Cancer Care, allowed CCNW to expand its radiation oncology offerings from 4 linear accelerators at 4 offices to 8 linear accelerators at 8 offices. It also gave the practice a strong alliance with a provider of tertiary hospital services sufficient to cover nearly any medical problem with any patient. But CCNW still wasn’t finished using partnerships to supplement its medical offerings.

The practice does not get enough patients with cancers of the head and neck to support its own surgical specialists, so it has aligned itself with a pair of independent specialists in Spokane. It also has aligned itself with a facility that provides gamma knife surgery for those relatively rare patients who need such a procedure. Such partnerships give CCNW patients seamless access to specialized care—no extra forms to fill out, no separate billing, etc&mdash;and the specialists get additional business.

More services have led to greater market share, which has made it possible to provide even more services. This positive cycle has made CCNW financially successful. It has also insulated the practice against forces that have necessitated more radical changes at other practices across the country.

For example, CCNW has adopted treatment pathways to ensure that all its oncologists follow established and standardized best practices for treating any particular tumor type at any particular point in its development. Indeed, the practice was one of the pioneers in creating the treatment pathways that were eventually adopted across the US Oncology network. CCNW has not, however, felt the need to jump with both feet into an alternative-care model that replaces fee-for-service compensation for payments based on outcomes that an oncology practice may or may not be able to control.

The practice was interested in participating in one of the pilot programs designed by CMS to reward high-quality care (and pay less for low-quality care), but its electronic medical record was unable to track the necessary data. By the time the practice had upgraded, the participation window had closed. “Research and pilot programs are still a long way from establishing a complete set of best practices, but there are a lot of exciting strategies for reducing costs and improving outcomes, all in various stages of development, and we now have ourselves at a point that we can jump in pretty quickly when it makes sense for us to do so,” said Benincosa. “We don’t want to get ahead of the evidence but we’re eager to keep improving the quality of the product we offer.”

The private payers in CCNW’s service area—which have been aggressive about trying to control costs by requiring prior authorization for an ever-growing list of treatments&mdash;have taken a wait-and-see attitude about outcome-based compensation. Neither Blue Cross-Blue Shield, the dominant provider, nor any of its local competitors have pushed for any move away from fee-for-service. They may be waiting, like so much of the nation, to see whether any substantial healthcare reforms emerge from the current Congress.

The partners at CCNW are naturally interested too, particularly because Washington is a Medicaid expansion state, but they are trying not to let uncertainty hinder the evolution of their practice. “The state of cancer care is changing so quickly that practices must constantly adapt just to stay current,” said Call, who added that the practice’s long-term business plan may bring continued growth, but only in its established footprint. “We don’t have any grand plan to double in size, but the population around here is aging, so cancer rates are rising and we are going to need more doctors to treat them all.”

Conti RM, Landrum MB, and Jacobson M. Health Care Cost Institute. The impact of provider consolidation on outpatient prescription drugbased cancer care spending. Health Care Cost Institute website. www. healthcostinstitute.org/wp-content/uploads/2016/08/HCCI-Issue-Brief- Impact-of-Provider-Consolidation.pdf. Published 2016. Accessed June 2, 2017.

Cancer Care Northwest made a successful bet on going fully independent and became a dominant provider in its market. 


How a Northwestern Practice Gained by Accepting Patients of All Means

Good data and data analysis can tell doctors a lot about their performance that they may have overlooked, said Bobby Green, MD, senior vice president for clinical oncology at Flatiron Health in New York City. Without careful analysis, doctors may assume they’re doing the right thing even though the truth may be different. “I think I’m a good oncologist,” he said. “I know my patients think I’m a good oncologist. My referring docs think I’m a good oncologist, but the reality is I don’t really have any idea whether I’m a good oncologist.” The difference is being able to prove it by the numbers, he said.

CMS has put so much emphasis on reported data that it is now paramount for oncology practices to understand how data should be sifted and interpreted to arrive at meaningful conclusions, said Green, who in addition to his work for Flatiron, continues to work as a practicing oncologist 1 day a week. He spoke in April at the 2017 Community Oncology Alliance annual meeting.

At Flatiron, Green is working on ways to mine healthcare information for clues to better outcomes and lower costs. Through his clinical work, he is participating in the Oncology Care Model (OCM) pilot for better outcomes and lower costs. “We’re being asked to look at several different things,” he said. “We’re being asked to measure the quality and cost within our practices. We’re being asked to make interventions in our practices that have the potential to affect care and the potential to affect the financial viability of our practices.”

In his presentation, Green described numerous situations where cost savings and quality initiatives based on Big Data can go awry without careful selection and handling of data points. The Medicare Access and CHIP Reauthorization Act (MACRA), the Medicare reform law, has been CMS’ tool to spur medical practices to gather data and report on a number of performance measures, and the analyses based on this data will determine how well practices are remunerated. Therefore, oncology practice managers and physicians must understand how to correctly interpret the data they’re gathering and that are coming to them from CMS, Green said. He noted that under the CMS plan, by 2020, 60% of the physician payment formula will be based on performance as measured from reported data.

Good measurement begins with a sound analysis plan and continues with a willingness to look deeper than surface impressions, he said. “The first answer you get is not always the right answer.” For an example, he reviewed a Flatiron study of 

 testing in cases of squamous non—small cell lung cancer (NSCLC). Ideally, about 20% of patients with squamous NSCLC would be tested for 

, particularly, those with a lifetime history of smoking or for whom inadequate tissue samples were obtained. The Flatiron study of 4095 patients and 206 clinics showed an average testing rate of 21%, which Green said was “spot on.” But on closer inspection, it was discovered that some of the clinics had been testing far fewer than 10% of patients with squamous NSCLC, whereas others had been testing close to 100%, both of which were clearly undesirable extremes, Green pointed out.

This example shows the importance of looking at data more closely to avoid being misled by superficial observations, he said. “If you drill down, you actually see some discrepancies, and I would argue that these are discrepancies that if you’re a practice that’s either testing too many or not testing enough patients, this is an improvement that you would want to make.”

Conversely, an initial examination of data can tell you you’re doing the wrong thing and only upon closer inspection are you able to determine that things are being done correctly. To demonstrate, Green presented a study of KRAS testing in patients with metastatic colorectal cancer (mCRC) who were potential candidates for EGFR inhibitor therapy. He noted that KRAS testing is advised for mCRC because it’s harmful to give EGFR inhibitor therapy to patients who are KRAS-positive. An initial look at the data showed KRAS testing rates peaking at 71% of patients (n = 168) in 2012 and dropping to 57% (n = 748) in 2014, neither of which was acceptable, Green said.

Further analysis showed one clinic testing as many as 90% of patients and another testing just 35% of patients. There was wide variation among the remaining clinics, too. That wasn’t good either. But then Flatiron looked at testing by line of therapy and found that the overall testing rate reached 90% of patients as they progressed through multiple lines of therapy, which showed that, in general, KRAS testing rates were acceptable. The reason for the discrepancy was that not all doctors were testing patients at the same time. “If people weren’t going to get an EGFR inhibitor in the first line, some practices didn’t test until they were closer to being ready to do that,” Green said. “The answer was that there was variation in the timing. That’s OK. Everyone’s doing the right thing. Practices are performing as you would expect.”

One important aspect of that finding is that in an environment where doctors are paid according to CMS’ view of whether they are delivering care appropriately, it is essential for CMS to look at the right data and evaluate performance based on correct assumptions about the meaning of that data, Green said. “Imagine if this [KRAS-testing example] were part of a [CMS] quality metric and it affected payment reimbursement and shared savings. That’s all possible in the new world we’re living in, but when you dig into the data you actually find a bit of a surprise—that people are not doing a bad job,” Green said.

A huge amount of data is being produced as a result of the transition to electronic health records (EHRs), but so far it hasn’t been possible to extract as much useful information and insight from that data as doctors and researchers would have liked, Green said. Nevertheless, the field of data mining is moving forward and the possibilities are exciting, he added. As part of the process, it’s important to make meaningful comparisons of data and to not be forced to collect and relay data that isn’t going to contribute to meaningful analysis, Green said. “We have quality metrics that we need to report on, and I fundamentally believe that the metrics I’m reporting on don’t do a lot to really deliver higher value care for my patients. I don’t believe that checking a box that says I’ve assessed my patient for pain is going to address their pain better simply because I’ve checked that box.” For that reason, practices need to be vigilant that CMS doesn’t saddle them with quality reporting requirements that lengthen the workday but don’t add value to the clinical process.

Beyond measurement, what practices need from CMS is feedback that amounts to actionable information, Green said. The volume of Medicare claims data that has been given to OCM practices has been both beneficial and overwhelming. This information can provide valuable insights such as cost by disease, cost drivers, drug adherence, hospitalizations and emergency department use, and patient comorbidities. The limitations of this data include not being able to tell which physicians are responsible for costs, claims data being too old and difficult to act upon, and the inability to know the stage or extent of a patient’s disease. “There’s lots of clinical variation that has a bearing on cost that’s actually hard to get out of claims data,” Green said.

He noted that when clinical data is combined with claims data, it becomes possible to get a much fuller and more useful picture of a patient’s journey through the healthcare system (Figure). However, it is difficult to arrive at such a picture, and Green said it was only with the help of statisticians and data analysts at Flatiron that he was able to fill in many of these blanks. “It’s important at the practice level to make sure that whoever is doing this is doing it right. I think it’s still an evolving field how we should appropriately do some of these analyses,” he said.

Figure: Multisource Data Provide a Fuller Picture of Costs and Treatment for a Patient With Non—Small Cell Lung Cancer (NSCLC)

Combining data to develop this fuller picture of a patient’s care path requires the use of organized data, defined as being structured and accessible by machine-based analysis, and random data, known as unstructured, which may take the form of notations in the EHR. For example, without both forms of medical data, it may be impossible to distinguish whether high costs of care are being generated by a particular physician’s actions or whether the patient’s disease is an outlier that follows an inconsistent path of development, Green said.

“There are always going to be inaccuracies, there are always going to be limitations, and that ultimately is going to introduce bias into your actions,” he said. “We need to be careful we don’t make interventions in areas where we’re not sure about what we’re doing or about what we’re trying to change.”

It is also important to make clear distinctions between patient cohorts for the same disease state. Because patients differ by age and response to care, they must be separated into appropriate cohorts for the purposes of physician performance measurement and reward, Green concluded. “If we’re going to be taking risk as oncologists—financial risk for our patients&mdash;we need to understand the different cost of the different subgroups of patients.”

CMS has put so much emphasis on reported data that it is now paramount for oncology practices to understand how data should be sifted and interpreted to arrive at meaningful conclusions.

Clinical Data Can Mislead Without Meaningful Analysis

Practices in CMS’ Oncology Care Model (OCM) are individually receiving hundreds of thousands of dollars in new annual revenue, but physicians and administrators are not exactly celebrating the influx of cash. The OCM requires substantial, ongoing spending on additional staff, software upgrades, and other infrastructure that has left some practices financially underwater on the model despite the new payments. Even those that are doing better must contend with the fact that the new funding counts toward their patients’ total cost of care. That total cost must be reduced if providers want to avoid being expelled from the program or possibly hit with financial penalties.

Table: How CMS Will Calculate Bonus Payment in the Oncology Care Model

The new disbursement, called the Monthly Enhanced Oncology Services payment (MEOS), provides practices with $160 per patient per month during 6-month treatment episodes. It is meant to help them develop systems to educate patients, collect extensive data, and prevent expensive emergency department (ED) visits and hospitalizations. After automatic federal spending cuts, a 6-month episode brings a practice $940.80, and payments may continue into multiple episodes. A hypothetical practice that continuously has 500 patients covered by the OCM would receive $940,800 a year. Individual practices may have very different totals.

At the same time, CMS’ Center for Medicare & Medicaid Innovation (CMMI) requires participating practices to allow patients to call in at any hour, which means hiring nurses to staff a phone triage system and giving them real-time access to patient records. Office hours are typically extended to evenings and weekends. Staffers must spend considerable time compiling 13-point care plans for each patient listing treatment goals, estimated out-of-pocket costs, care team members, and other elements. Many practices hire patient navigators and contract with data analysts who can go through masses of patient and claims data to find ways to improve the quality of care.

Oncology Consultants in Houston spent $300,000 ramping up for the model, with roughly two-thirds of those dollars going toward added personnel and one-third to technology, administrator Alti Rahman said. The practice has 15 physicians and 4 midlevel providers working from 9 medical oncology locations and 2 radiation centers. It had previously added some weekend hours and longer weekday hours, and for the OCM it assigned nurses to phone triage and purchased oncology-specific triage software.

Rahman said his practice had 322 patients in the OCM as of mid-May and is receiving more in MEOS payments than it is spending on new infrastructure. He said the practice is in that positive financial situation because it extended its hours and staffed up several years earlier, reducing the need for hiring when the OCM launched. Rahman said it’s also important to remember that any net gains are not pure profit; in a sense, the payments count against you when CMMI calculates whether you are meeting cost-reduction targets.

“Yes, it’s called the Monthly Enhanced Oncology Services payment, and you’re getting revenues from it, but your mindset really needs to be away from, ‘Well, this is additional revenues for me.’ You need to treat it as a loan that, at some point, will need to be repaid,” Rahman said. “If you look at it that way, then you focus your efforts on trying to see how you’re going to get the extra dollars of shared savings.”

MEOS payments count as part of the cost of care, along with all Medicare Part A and Part B expenses and some Part D costs. The model takes the total cost figure and adjusts it for disease type, patient comorbidities, geographic variation, and other factors, then reduces it by 4%—reflecting the goal of lower spending&mdash;and uses the result to calculate a target price. Practices that beat their target will receive performance-based payments next year, up to the amount of savings they achieved below the target. Those that do not could be expelled from the program (Figure, cover).

Eventually practices are expected to move into the 2-sided risk version of the OCM, although none have opted to do so yet. Under 2-sided risk, the target is eased somewhat and potential rewards are higher. Practices that fall short would be assessed large financial penalties that could force them to close their doors, making the cost calculation particularly important.

Robert “Bo” Gamble, director of strategic practice initiatives at the Community Oncology Alliance (COA), said it is helping care teams calculate the per-provider cost of transforming a practice to compare that amount to the MEOS payments they are receiving. He hopes to have a clearer picture in the next few months. “If I had to wager, I would say that the expense of this effort is outweighing the income so far.

“It’s essentially a break-even venture,” Rahman said. “The majority of the expenses are fixed costs. The following year, you’re still going to have the expanded-hours clinics and the additional staffing to support it, and you’re still going to be paying the same licensing fees for the software.” Furthermore, “at some point, if you’re not performing, then you’re going to be out of the program,” and MEOS payments will stop, he noted. “You can’t just say ‘I’m going to get rid of software and staff tomorrow because I’m not getting MEOS payments.’”

About half of the 190 OCM practices across the country are contracting with outside consultants for services related to the program, such as chart abstraction and data analysis, Gamble said. For some practices, that external spending combined with internal upgrades is consuming not only their MEOS payments but other revenues as well.

Robert Baird, CEO of Dayton Physicians Network, a National Committee for Quality Assurance-recognized oncology medical home in Ohio, said his practice spent $950,000 on infrastructure upgrades before the OCM began and has spent even more since then. It has between 600 and 750 patients covered by the program, he said.

Dayton Physicians has 18 medical oncologists and 7 radiation oncologists at 8 locations, as well as urologists and mid-level practitioners. It created a new triage department and hired nurse practitioners, an information technology staffer, a clinical informaticist, and 2 registrars to enter data, Baird said. The practice uses an outside consultant to analyze claims data and may add a patient navigator to facilitate the cumbersome data collection required by the OCM.

“Our costs are about double what the OCM is paying. They’re paying about $160 a month, and it’s costing us twice that to put all the emphasis and infrastructure in place for these patients,” he said. “We view it as a long-term investment, and how we’ve been able to manage is, to be honest, the income for our physicians has flattened. We’ve cut costs where we thought it was appropriate. We’ve consolidated offices. We’re doing everything we can to save money and to diversify our revenue.” Revenue sources included a clinical research program, imaging, pathology, a retail pharmacy and an advanced prostate cancer clinic.

For practice administrators, the financial equation is ultimately less about MEOS payments and more about being able to satisfy the OCM’s requirements and qualify for performance-based payments, which can also add up (Table, cover). In a hypothetical example published by CMMI, a practice—smaller than in the previous example&mdash;with 100 care episodes might have a target price of $2.47 million and actual expenditures of $2.3 million, for $172,480 in savings. The model applies a performance multiplier, which is based on several variables such as care-plan availability and the number of ED visits, along with a geographic adjustment and the federal sequester reduction, for a performance-based payment of $130,574.

The payment is thus a powerful incentive to conform to the OCM’s many detailed dictates. But Baird said he is concerned it is not even possible to provide the required level of care at the model’s discounted rate, and to satisfy CMMI’s “extremely heavy” documentation and reporting requirements with the available resources. “For example, documenting all the 13 points of the care plan through patient visits takes up a lot of time, so we’re finding ways to do that more efficiently, such as outside the visit,” he said.

Baird said CMMI will have to adjust its cost formula if OCM practices are to avoid financial difficulties and beat their targets. “If this program’s going to be successful, I know changes have to be made,” he said. “CMMI seems to be willing to listen and work and make tweaks. I just hope we don’t run out of time.”

While administrators like Baird and Rahman are focused on transforming their practices to improve quality and make the payment model work, Gamble said he’s heard suggestions that some providers may be less committed to reform. They may be thinking, “‘Wow, this thing’s complicated,’” he said. “They may be going about it a little half-hearted, saying, ‘I’m going to ride these MEOS payments as long as I possibly can, because it is important to the survival of my team,’ but they don’t have the energy or resources to make deep investments for the long haul.’” He does not know for sure that there are such practices, but said they may exist.

As providers manage the OCM’s added costs, administrative burden, and tough targets, they also have to decide how to integrate non-OCM patients into their new systems. At Oncology Consultants, the operational changes and data collection apply to all patients, whether they are covered by OCM or not, Rahman said. Baird said that is Dayton Physicians’ goal as well, although it is not there yet. “We started doing it with all our patients, and it became way overwhelming. So, we took a step back, and now we’re trying to refine the process on the OCM patients only. But our plan is to have this practice transformation for our entire practice,” he said.

Practices in CMS’ Oncology Care Model are individually receiving hundreds of thousands of dollars in new annual revenue, but physicians and administrators are not exactly celebrating the influx of cash.

July 2017 | Special Issues

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The OCM Has Been Challenging, But Effective

How a Northwestern Practice Gained by Accepting Patients of All Means

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Administrators Say OCM Monthly Payments Won't Cover Costs of Improved Care