Health Policy
ASCO Special Article
Potential Approaches to Sustainable, Long-Lasting Payment Reform in Oncology By American Society of Clinical Oncology
With unsustainable and rising health care costs reaching what are regularly termed crisis levels, the United States’ current fragmented and inefficient health care system is in need of reforms that will allow oncology practices to adapt to changing delivery systems that put the patient at the center of care. Oncology accounts for roughly 10% of all health care costs and is a prime target for reform-minded stakeholders, particularly in the realm of reimbursement for care. ASCO believes that successful physician payment reform will be physician led and driven. This article was developed by the ASCO Clinical Practice Committee Payment Reform Workgroup and underwent subsequent review and approval by the full Clinical Practice Committee and the ASCO Board of Directors. The following represents an
Numerous stakeholders, including policymakers, think tanks, advisory bodies to government agencies, and foundations have been grappling with the rising costs of health care and how to address those costs over the past several years. ASCO believes that for physician payment reform to be successful, it should be physician driven and led. The physician focus on patient care, integrity, and quality uniquely equips us to be leaders in the development of a system that makes the best use of existing resources, checks unnecessary costs, and keeps the patient at the center of all care processes. The call for payment reform in oncology is not new. However, because most of the models proposed or tested over the past few years have required wholesale change in practice, care delivery, or administrative structure, oncology practices have been reluctant to embrace significant change. Furthermore, great uncertainty exists about the impact of such changes on the health—and survival— of what has been widely viewed as an effective system of community-based cancer care. It is our view that forcing practices to adopt these changes en masse is impractical. More important, it will lead to practice disruption and unintended consequences for patients. A more realistic approach with a greater chance of success will be one that allows adoption of change in the form of discrete elements over time. Practices can then adapt to changing delivery systems and reimbursement models without disrupting patient care. ASCO has produced this document to help guide the oncology and broader health care community in discussions about health care delivery and payment reform in the oncology setting.
The Current Landscape Health care costs in the United States are unsustainable, and the current health care system is fragmented, inefficient, and to a 254
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abridged version of the original document, edited for length. The entire document may be found at www.asco.org/ paymentreform. It includes a critical survey of the current reimbursement landscape and lays out the foundation for a comprehensive, multifaceted solution that would replace the current fee for service structure. This foundation includes quality measurements and incentives, a replacement for the current “buy and bill” system for chemotherapy drugs, value-based pathways, episodic or bundled care payments, and care coordination to decrease use of expensive resources. ASCO intends to pursue further development, modeling, and testing of these concepts and invites others in the oncology community to prepare to lead efforts to a more rational and stable payment plan that will support high-quality care for our patients.
large extent fails to put the patient at the center of care. Federal and state governments bear a large burden of health care costs through programs such as Medicare and Medicaid. Congress and the Administration are actively engaged in examining ways to restructure care delivery and reimbursement to ensure care that is higher quality, more cost efficient, and patient centered. Although 1.5% of patients develop cancer in any given year, they account for roughly 10% of all health care costs. Of the top 10 drugs that Medicare pays for as part of a beneficiary’s medical benefit (the so-called Part B drugs), eight are used in the treatment or supportive care of patients with cancer. Pursuing aggressive control of expenditures, Medicare and private health insurers have increased their focus on high-cost areas, including oncology. In addition, payers are stepping up demands that providers demonstrate value—assuming accountability for costs and ensuring that these costs relate to the quality of patient care. Value was emphasized throughout the Affordable Care Act, which mandated CMS establishment of a value-based modifier payment that compares a physician’s patient care costs against quality of care delivered and sets Medicare reimbursement accordingly. Although the value-based modifier will affect all physicians by 2017, CMS will use 2013 data as a basis for payment adjustments for certain practices beginning in 2015. Oncologists, along with almost all other physician practices, operate in a largely fee-for-service environment when treating Medicare patients. This system incentivizes volume, while failing to encourage either quality or efficiency. Oncology practice revenue is driven by both services (evaluation and management, chemotherapy administration) and the margin on drugs provided in the physician office. Although other physician specialties use the average sales price (ASP) -plus system for physician-administered drugs, on-
V O L . 10, I S S U E 4
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Abstract
Potential Approaches to Payment Reform in Oncology
Copyright © 2014 by American Society of Clinical Oncology
J U L Y 2014
A Comprehensive, Multifaceted Solution We propose several promising approaches for parallel implementation that could inform policymakers of the most rational and efficient way to reimburse high-quality cancer care. We oppose a “one size fits all” reimbursement methodology, especially in an area as complex as cancer care. We also believe that oncologists should have the ability to opt into the model that best fits their practice structure and patient needs. We propose a comprehensive, multifaceted solution that will allow oncology practices to opt into a variety of reimbursement models at levels consistent with their existing resources, while consistently encouraging higher performance at lower cost and greater risk sharing over time. With the exception of the Quality Oncology Practice Initiative (QOPI)—which we believe should be an integral part of any reimbursement system considered for testing— each of the following components can be tested as a stand-alone component or integrated with one or more of the other elements. These components consist of QOPI, a cancer therapy management fee, pathways, episodic or bundled payments, and care coordination in the patient-centered medical home (PCMH). Although QOPI is presented as a stand-alone element for ease of understanding, we believe that QOPI participation should be an integral part of any new payment structure, to help ensure high-quality care. With the passage of the American Taxpayer Relief Act of 2012, a mechanism was set in place in 2014 for QOPI to satisfy CMS reporting requirements, which will encourage even higher oncologist participation in QOPI and help align oncologist-developed quality measures with the CMS mandate to examine quality of patient care. Table 1 gives an overview of the components listed above and a proposed timeline. Following the table is a more in-depth discussion of each of these elements.
QOPI The QOPI program is an oncologist-led, practice-based quality improvement initiative whose goal is to promote excellence in cancer care by helping practices create a culture of self-examination and improvement. QOPI includes a set of 150-plus quality measures, a specified chart selection strategy, a secure system for data entry, automated data analysis and reporting, a network of resources for improvement, and a stringent certification program. QOPI provides a framework for oncologists to assess structures and processes of care, including under- and overuse of services. ASCO has long advocated for the use of QOPI to satisfy CMS Physician Quality Reporting System requirements. With the passage of the American Taxpayer Relief Act of 2012, the potential for QOPI to serve in this way was enhanced. For any of the models being proposed, we believe that QOPI should serve as the performance measurement program, in order to ensure the highest quality of care possible. Regardless of payment model, patients deserve the highest quality treatment, and such treatment is based on evidence-based standards, as reflected in QOPI’s performance measures. •
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cologists account for approximately one half of claims for patients receiving physician-administered drugs. Some practices are able to purchase drugs at a rate below Medicare’s reimbursement of ASP⫹6% and achieve a margin for specific drugs and transactions. ASCO has long argued that such margins, in combination with aggregate payments for services, have been critical to subsidizing complex services required by patients with cancer, but for which Medicare and other payers do not provide adequate payment. Conversely, some practices (often smaller or rural practices) find it much more difficult to negotiate favorable terms on the drugs they purchase, and ultimately must subsidize the cost of the drug for their patients. Modification or elimination of the “buy and bill” system has been a longstanding goal of some policymakers, with critics specifically objecting to its inherent incentives and pointing out that the 6% add-on increases as drug price increases. They argue that prescribers are motivated to use the most expensive drug in order to maximize the margin. Furthermore, because of limits these margins impose on the ability of manufacturers to change prices quickly, the buy and bill system has been blamed for fueling recent trends toward extremely high prices when drugs are brought to market. Reforming Medicare payment for chemotherapy is one small component of a much larger discussion about physician payment, care models, value-based insurance design, and countless reforms or innovations occurring in health care systems and medical specialties across the United States. A fundamental flaw underlying today’s reimbursement framework is a longstanding preference for procedures over cognitive services. Regardless of other reform strategies, this issue— especially in the Medicare program—must be addressed. In addition, the complex care required by patients with cancer includes supportive care services that are not recognized or compensated by many payers, including Medicare. Although practices have been subsidizing this underpayment for many years, the current environment— especially if further reduced through sustainable growth rate cuts or other federal deficit-reduction measures—will make it impossible for practices to continue this subsidy, effectively removing access to vital services for Medicare patients. Changes to Medicare’s firmly entrenched payment paradigm that rewards procedures over cognitive services will take time. For that reason, and because drug margins are now partially compensating oncology services, changes to chemotherapy reimbursement should be done in consultation with oncologists, be phased in over time, and be crafted with a clear view of how they will affect the patients we serve. We propose in this document an approach to oncology payment reform that will allow gradual phase-in of complementary delivery and reimbursement systems, while moving the field toward an ambitious yet achievable goal: By 2020, CMS will have in place a matrix of payment systems that recognize and respond to the diverse needs of practice settings and the patients they serve; these new payment systems will put health care resources to their highest and best use, emphasizing high-quality patient care, care coordination, evidence-based medicine, and patient centeredness.
American Society of Clinical Oncology
Table 1. Proposed Reform Components and Timeline Phased Approach Component
Phase 2
Phase 3
Phase 4
Phase 5
QOPI
No negative adjustment Positive adjustment for participation
No negative adjustment Positive adjustment for participation
Must meet performance benchmarks for positive adjustment; no negative adjustment
Must meet higher performance benchmarks for positive adjustment; no negative adjustment
Positive and negative adjustments based on performance benchmarks; increased positive adjustment based on QOPI certification
Cancer therapy management fee
Practices choose to opt in (must also participate in QOPI); those who do not opt in remain in current ASP⫹6 environment
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Pathways
Positive adjustment for participation
Positive adjustment for participation
Must meet predefined concordance for positive adjustment
Must meet predefined concordance for positive adjustment
Must meet predefined concordance for positive adjustment; negative adjustment for those below
Episodes/bundling
Practices choose to opt in to colon cancer bundle for 1 year
Practices choose to continue bundle or opt out; data analysis from first round of colon cancer bundle
Second round of colon bundle offering; breast cancer bundle opened
Practices choose to continue bundle(s) or opt out; data analysis from first round of breast bundle, second round of colon bundle
CMS determines, based on results, continued offering of bundle(s)
Care coordination fee 3 patient-centered medical oncology home (based on NCQA specialty home criteria)
Practice receives care coordination fee and begins to put in place the basic elements of a PCMH
Practice receives care coordination fee and finalizes basic elements of a PCMH
Practice must achieve level I recognition from NCQA
Practice must achieve level II recognition from NCQA
Practice must achieve level III recognition from NCQA (fully functioning medical home); higher adjustments for higher performers (whether through NCQA criteria or actual performance on ER visits, hospitalizations)
Abbreviations: ASP⫹6, average sales price plus 6%; CMS, Centers for Medicare and Medicaid Services; ER, emergency room; MEI, Medicare Economic Index; NCQA, National Committee for Quality Assurance; PCMH, patient-centered medical home; QOPI, Quality Oncology Practice Initiative.
Cancer Therapy Management Fee The current buy and bill system for chemotherapy drugs is viable for many practices; however, it puts the physician at risk for copays, bad debt, denials of coverage, and substantial overhead costs. We believe it is possible to structure a model that would allow interested practices to explore alternatives, maintain current revenue levels, and avoid disrupting services currently offered to their patients by redirecting the anticipated reimbursement from the ⫹6 part of ASP⫹6 into a cancer therapy management fee, which would be divorced from the actual cost of the drug. Such a system could be constructed as follows: drugs would be paid at acquisition cost (“pass through”), and the ⫹6% of the 256
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ASP⫹6 component would be replaced with a cancer therapy management fee. The 6% from the total of all drugs paid by Medicare to oncologists would be divided equally across patients receiving active chemotherapy during the base year, and this aggregate amount would be redesignated for use to support the cancer therapy management fee, which would be paid on a monthly basis. The effect would be income neutral; performance, quality improvement, and inflation would dictate further increases. This model offers CMS the potential for cost savings and cost avoidance. First, because the management fee would be adjusted each year based on performance coupled with an inflationary index, increases would not be as great as those based on average price of drugs. Comparing a Medicare Economic
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Phase 1
Potential Approaches to Payment Reform in Oncology
Pathways Pathways have been identified as a way to minimize unexplained variations in cancer care and to reduce cost by minimizing or eliminating low-value or clinically questionable services. For the purpose of this document, the term “pathways” refers to “value-based pathways,” which includes consideration of value as an inherent part of pathway development. Many pathways currently in use are not value based; real cost savings may be realized by the inclusion of value as a requirement for pathway use in the Medicare program. The anticipated potential of pathways to improve care and decrease resource consumption has many private insurers now requiring their use in certain patient populations. The actual impact of pathways on cost has been variable and, for the most part, modest. However, many believe that, if used properly, pathways have the potential to stabilize cost and increase adherence to evidence-based practices. For this reason—and because a growing number of practices have chosen (or are required) to use them—it seems appropriate to leverage this trend as one Copyright © 2014 by American Society of Clinical Oncology
J U L Y 2014
means of achieving payment reform and/or positive payment updates. We suggest that oncologists be allowed to choose from among existing pathways those that work best for their specific patient population, and that incentives be linked to pathway adherence. Over the course of pathway implementation, CMS will be able to compare costs (based on claims data) and quality (based on QOPI participation) among practices that use pathways versus practices that choose not to do so. It is critical to note that certain populations of patients will have legitimate clinical reasons that they cannot be treated “on pathway” as a result of comorbidities, poor performance status, and/or intolerance of recommended therapy. A critical feature of any pathway program will be inclusion of a mechanism that allows patients to be treated “off pathway,” and that does not penalize physicians for caring for a sicker, more at-risk patient population.
Episodes of Care or Bundled Payments Episodes of care or bundled payments have been proposed by multiple stakeholders as a potential cost-saving mechanism. These structures are already in place in the hospital setting (eg, dialysis) and certain other specific conditions but have not yet made their way into many private practice settings. The complexity of cancer treatment and the many specialties involved make a bundled approach to payment challenging. Services provided by surgeons, radiation oncologists, and medical oncologists/hematologists would have to be considered and integrated into the bundle. Initially, we recommend demonstration of a limited bundle, comprising medical oncology services for a specific condition, to better understand overall feasibility and to inform a strategy for inclusion of all services needed to provide the full spectrum of care for a given patient. We believe this approach has potential and would suggest an adjuvant colon cancer bundle as one option available for oncologists to select. Adjuvant treatment of stage III colon cancer has the advantage of already being quite consistent across practices, and CMS would have the ability to compare costs and quality (based on claims data and QOPI, respectively) of practices that use the bundled payment versus those that do not, and eventually to offer the bundle—if successful—to a broader group of participants.
Care Coordination and the PCMH The PCMH is often cited as one of the most promising models for comprehensive patient care and cost savings. Although originally proposed in the primary health care setting as early as the 1960s, the PCMH has recently seen success in the form of improved patient care and decreased resource use in an oncology setting. The goal of the PCMH is to put the patient at the center of practice activities, ensure seamless coordination of care, and aggressively pursue symptomatic and preventive care. These activities, when successfully realized in the oncology setting, can result in decreased use of resources, fewer emergency department visits, and decreased numbers of hospitalizations. •
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Index– based management fee, for example, to the expected growth trajectory of drugs (National Health Expenditures, Medicare drugs) shows potential savings as high as $1 billion over 10 years. Note that this comparison does not take into account possible changes in physician prescribing habits over this same 10-year period, changes that, in theory, could either blunt or magnify the savings achievable under this model. If, however, physicians’ drug choices are affected by self-interest, uncoupling reimbursement from drug choices should result in additional savings. Second, trading the ASP add-on for a management fee stabilizes reimbursement and avoids the likely result if policymakers pursue their stated intention to move toward ASP⫹4 or lower. Reductions of that magnitude could cripple practices enough that they merge with hospitals or close their doors altogether. Either way, care would move to more costly hospital settings. Before such a scheme is considered for national implementation, historic Medicare claims data should be analyzed over 1 or more years to obtain a management fee estimate that can be modeled by individual practices and clinics. Further, we believe oral drugs should be included in this test and that the management fee should be based on both the current 6% add-on for infused drugs and the amount that would be derived by calculating 6% for all oral chemotherapy in a given year. Oral drugs represent the same— or sometimes even an enhanced—level of clinical management as that associated with infused chemotherapy, and should be part of the calculation for the cancer therapy management fee. If a management fee is to work in practice, a critical area to address within this proposed model is the logistics of drug distribution. Currently, a complex yet efficient system involving manufacturers, primary and secondary distributors, group purchasing organizations, pharmacies, specialty pharmacies, and physician offices is in operation, which allows for price shopping and “just in time” inventory and patient treatment.
American Society of Clinical Oncology
Summary The health care reimbursement environment is changing quickly, and physicians must be leaders, not followers, of any payment reform process. Government and private payers have long been seeking savings wherever they can find them, and they are engaged in examining alternative payment models. CMS Medicare Director Jonathan Blum has suggested that ASP⫹6 may drive physician behaviors in ways that do not serve beneficiary access and value: “Expensive injectable cancer drugs are one of the most difficult issues in addressing Medicare spending in Part B . . ..about 10 drugs account for a disproportionately large portion of Part B spending . . . CMS is considering new pay systems for oncology services, including the way that expensive cancer drugs are reimbursed under Part B . . . But the payment
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system needs to be changed for all oncology services, not just drugs, and the replacement likely will be ‘global’ in nature.” On April 1, 2013, automatic sequester cuts decreased Medicare reimbursement across the board by 2% but had a singularly larger impact on Part B drugs, which fell to a new reimbursement rate of ASP⫹4.3%. Because the ASP is essentially fixed (ie, the prices that practices were paying for drugs remained the same before and after the sequester) the entire cut was felt in the 6% add-on, which led to an effective cut of 28% (factoring in patient copays, which were not affected by sequestration). Also in April 2013, President Obama released his proposed fiscal year 2014 budget, which recommended a reduction in Part B drug reimbursement from ASP⫹6 to ASP⫹3, a cut designed to “reduce overpayment of Part B drugs.” Oncologists must be prepared to engage meaningfully in payment reform discussions; the future care of their patients and the health of the field may depend on it. Pushed by unprecedented economic pressures, the health care system is being challenged to ensure the best use of increasingly limited resources. At the same time, providers are increasingly being held to account for delivering high quality, evidence-based care to their patients. Oncology is a special focus because of the patient complexity, the life-threatening nature of these diseases, and headline-grabbing prices of therapies. We believe the overall fee-for-service system will no longer dominate as the model for physician payment, instead giving way to prospective payment models. The question is, when? And what will take its place? In this article, we offer some concepts that could be tested and that would demonstrate that oncologists are prepared to lead efforts to a more rational and stable payment system, one that supports high-quality care for the patients we serve. Author’s Disclosures of Potential Conflicts of Interest The author indicated no potential conflicts of interest. Corresponding author: Laura Trent, American Society of Clinical Oncology, 2318 Mill Rd, Alexandria, VA 22314; e-mail: [email protected].
DOI: 10.1200/JOP.2014.001267; published online ahead of print at jop.ascopubs.org on April 15, 2014.
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The successful functioning of a PCMH and the resultant savings are heavily dependent on the use of health information technology. For many practices, the initial investment required can be overwhelming. Although the US Department of Health and Human Services has offered incentives for electronic health record adoption, not all practices have been able to take advantage of these incentives, and even for those who have, there are significant additional HIT costs associated with a fully functioning PCMH. We propose giving practices an opportunity to phase in an oncology medical home. This period would begin in phase 1 with a new “care coordination” fee, which would recognize the activities associated with coordinating the complex care of cancer patients. Over the first two phases, practices would receive this fee and would be expected to begin making the practice improvement necessary to implement the basic elements of a PCMH; by the third phase, practices would attempt to achieve Specialty Program Recognition through the National Committee for Quality Assurance accreditation process, advancing through the different levels of accreditation to their ultimate designation as a level III medical home. Payment adjustments would be linked to achievement of accreditation, with potential additional adjustments based on measurable outcomes such as hospitalizations and emergency department visits.
ASCO Special Article
Potential Approaches to Sustainable, Long-Lasting Payment Reform in Oncology By American Society of Clinical Oncology
With unsustainable and rising health care costs reaching what are regularly termed crisis levels, the United States’ current fragmented and inefficient health care system is in need of reforms that will allow oncology practices to adapt to changing delivery systems that put the patient at the center of care. Oncology accounts for roughly 10% of all health care costs and is a prime target for reform-minded stakeholders, particularly in the realm of reimbursement for care. ASCO believes that successful physician payment reform will be physician led and driven. This article was developed by the ASCO Clinical Practice Committee Payment Reform Workgroup and underwent subsequent review and approval by the full Clinical Practice Committee and the ASCO Board of Directors. The following represents an
Numerous stakeholders, including policymakers, think tanks, advisory bodies to government agencies, and foundations have been grappling with the rising costs of health care and how to address those costs over the past several years. ASCO believes that for physician payment reform to be successful, it should be physician driven and led. The physician focus on patient care, integrity, and quality uniquely equips us to be leaders in the development of a system that makes the best use of existing resources, checks unnecessary costs, and keeps the patient at the center of all care processes. The call for payment reform in oncology is not new. However, because most of the models proposed or tested over the past few years have required wholesale change in practice, care delivery, or administrative structure, oncology practices have been reluctant to embrace significant change. Furthermore, great uncertainty exists about the impact of such changes on the health—and survival— of what has been widely viewed as an effective system of community-based cancer care. It is our view that forcing practices to adopt these changes en masse is impractical. More important, it will lead to practice disruption and unintended consequences for patients. A more realistic approach with a greater chance of success will be one that allows adoption of change in the form of discrete elements over time. Practices can then adapt to changing delivery systems and reimbursement models without disrupting patient care. ASCO has produced this document to help guide the oncology and broader health care community in discussions about health care delivery and payment reform in the oncology setting.
The Current Landscape Health care costs in the United States are unsustainable, and the current health care system is fragmented, inefficient, and to a 254
JOURNAL
OF
ONCOLOGY PRACTICE
•
abridged version of the original document, edited for length. The entire document may be found at www.asco.org/ paymentreform. It includes a critical survey of the current reimbursement landscape and lays out the foundation for a comprehensive, multifaceted solution that would replace the current fee for service structure. This foundation includes quality measurements and incentives, a replacement for the current “buy and bill” system for chemotherapy drugs, value-based pathways, episodic or bundled care payments, and care coordination to decrease use of expensive resources. ASCO intends to pursue further development, modeling, and testing of these concepts and invites others in the oncology community to prepare to lead efforts to a more rational and stable payment plan that will support high-quality care for our patients.
large extent fails to put the patient at the center of care. Federal and state governments bear a large burden of health care costs through programs such as Medicare and Medicaid. Congress and the Administration are actively engaged in examining ways to restructure care delivery and reimbursement to ensure care that is higher quality, more cost efficient, and patient centered. Although 1.5% of patients develop cancer in any given year, they account for roughly 10% of all health care costs. Of the top 10 drugs that Medicare pays for as part of a beneficiary’s medical benefit (the so-called Part B drugs), eight are used in the treatment or supportive care of patients with cancer. Pursuing aggressive control of expenditures, Medicare and private health insurers have increased their focus on high-cost areas, including oncology. In addition, payers are stepping up demands that providers demonstrate value—assuming accountability for costs and ensuring that these costs relate to the quality of patient care. Value was emphasized throughout the Affordable Care Act, which mandated CMS establishment of a value-based modifier payment that compares a physician’s patient care costs against quality of care delivered and sets Medicare reimbursement accordingly. Although the value-based modifier will affect all physicians by 2017, CMS will use 2013 data as a basis for payment adjustments for certain practices beginning in 2015. Oncologists, along with almost all other physician practices, operate in a largely fee-for-service environment when treating Medicare patients. This system incentivizes volume, while failing to encourage either quality or efficiency. Oncology practice revenue is driven by both services (evaluation and management, chemotherapy administration) and the margin on drugs provided in the physician office. Although other physician specialties use the average sales price (ASP) -plus system for physician-administered drugs, on-
V O L . 10, I S S U E 4
Copyright © 2014 by American Society of Clinical Oncology
Information downloaded from jop.ascopubs.org and provided by at Univ of Texas Libraries on December 4, 2014 from 128.83.63.20 Copyright © 2014 American Society of Clinical Oncology. All rights reserved.
Abstract
Potential Approaches to Payment Reform in Oncology
Copyright © 2014 by American Society of Clinical Oncology
J U L Y 2014
A Comprehensive, Multifaceted Solution We propose several promising approaches for parallel implementation that could inform policymakers of the most rational and efficient way to reimburse high-quality cancer care. We oppose a “one size fits all” reimbursement methodology, especially in an area as complex as cancer care. We also believe that oncologists should have the ability to opt into the model that best fits their practice structure and patient needs. We propose a comprehensive, multifaceted solution that will allow oncology practices to opt into a variety of reimbursement models at levels consistent with their existing resources, while consistently encouraging higher performance at lower cost and greater risk sharing over time. With the exception of the Quality Oncology Practice Initiative (QOPI)—which we believe should be an integral part of any reimbursement system considered for testing— each of the following components can be tested as a stand-alone component or integrated with one or more of the other elements. These components consist of QOPI, a cancer therapy management fee, pathways, episodic or bundled payments, and care coordination in the patient-centered medical home (PCMH). Although QOPI is presented as a stand-alone element for ease of understanding, we believe that QOPI participation should be an integral part of any new payment structure, to help ensure high-quality care. With the passage of the American Taxpayer Relief Act of 2012, a mechanism was set in place in 2014 for QOPI to satisfy CMS reporting requirements, which will encourage even higher oncologist participation in QOPI and help align oncologist-developed quality measures with the CMS mandate to examine quality of patient care. Table 1 gives an overview of the components listed above and a proposed timeline. Following the table is a more in-depth discussion of each of these elements.
QOPI The QOPI program is an oncologist-led, practice-based quality improvement initiative whose goal is to promote excellence in cancer care by helping practices create a culture of self-examination and improvement. QOPI includes a set of 150-plus quality measures, a specified chart selection strategy, a secure system for data entry, automated data analysis and reporting, a network of resources for improvement, and a stringent certification program. QOPI provides a framework for oncologists to assess structures and processes of care, including under- and overuse of services. ASCO has long advocated for the use of QOPI to satisfy CMS Physician Quality Reporting System requirements. With the passage of the American Taxpayer Relief Act of 2012, the potential for QOPI to serve in this way was enhanced. For any of the models being proposed, we believe that QOPI should serve as the performance measurement program, in order to ensure the highest quality of care possible. Regardless of payment model, patients deserve the highest quality treatment, and such treatment is based on evidence-based standards, as reflected in QOPI’s performance measures. •
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cologists account for approximately one half of claims for patients receiving physician-administered drugs. Some practices are able to purchase drugs at a rate below Medicare’s reimbursement of ASP⫹6% and achieve a margin for specific drugs and transactions. ASCO has long argued that such margins, in combination with aggregate payments for services, have been critical to subsidizing complex services required by patients with cancer, but for which Medicare and other payers do not provide adequate payment. Conversely, some practices (often smaller or rural practices) find it much more difficult to negotiate favorable terms on the drugs they purchase, and ultimately must subsidize the cost of the drug for their patients. Modification or elimination of the “buy and bill” system has been a longstanding goal of some policymakers, with critics specifically objecting to its inherent incentives and pointing out that the 6% add-on increases as drug price increases. They argue that prescribers are motivated to use the most expensive drug in order to maximize the margin. Furthermore, because of limits these margins impose on the ability of manufacturers to change prices quickly, the buy and bill system has been blamed for fueling recent trends toward extremely high prices when drugs are brought to market. Reforming Medicare payment for chemotherapy is one small component of a much larger discussion about physician payment, care models, value-based insurance design, and countless reforms or innovations occurring in health care systems and medical specialties across the United States. A fundamental flaw underlying today’s reimbursement framework is a longstanding preference for procedures over cognitive services. Regardless of other reform strategies, this issue— especially in the Medicare program—must be addressed. In addition, the complex care required by patients with cancer includes supportive care services that are not recognized or compensated by many payers, including Medicare. Although practices have been subsidizing this underpayment for many years, the current environment— especially if further reduced through sustainable growth rate cuts or other federal deficit-reduction measures—will make it impossible for practices to continue this subsidy, effectively removing access to vital services for Medicare patients. Changes to Medicare’s firmly entrenched payment paradigm that rewards procedures over cognitive services will take time. For that reason, and because drug margins are now partially compensating oncology services, changes to chemotherapy reimbursement should be done in consultation with oncologists, be phased in over time, and be crafted with a clear view of how they will affect the patients we serve. We propose in this document an approach to oncology payment reform that will allow gradual phase-in of complementary delivery and reimbursement systems, while moving the field toward an ambitious yet achievable goal: By 2020, CMS will have in place a matrix of payment systems that recognize and respond to the diverse needs of practice settings and the patients they serve; these new payment systems will put health care resources to their highest and best use, emphasizing high-quality patient care, care coordination, evidence-based medicine, and patient centeredness.
American Society of Clinical Oncology
Table 1. Proposed Reform Components and Timeline Phased Approach Component
Phase 2
Phase 3
Phase 4
Phase 5
QOPI
No negative adjustment Positive adjustment for participation
No negative adjustment Positive adjustment for participation
Must meet performance benchmarks for positive adjustment; no negative adjustment
Must meet higher performance benchmarks for positive adjustment; no negative adjustment
Positive and negative adjustments based on performance benchmarks; increased positive adjustment based on QOPI certification
Cancer therapy management fee
Practices choose to opt in (must also participate in QOPI); those who do not opt in remain in current ASP⫹6 environment
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Management fee grows at MEI (or other suitable index)
Pathways
Positive adjustment for participation
Positive adjustment for participation
Must meet predefined concordance for positive adjustment
Must meet predefined concordance for positive adjustment
Must meet predefined concordance for positive adjustment; negative adjustment for those below
Episodes/bundling
Practices choose to opt in to colon cancer bundle for 1 year
Practices choose to continue bundle or opt out; data analysis from first round of colon cancer bundle
Second round of colon bundle offering; breast cancer bundle opened
Practices choose to continue bundle(s) or opt out; data analysis from first round of breast bundle, second round of colon bundle
CMS determines, based on results, continued offering of bundle(s)
Care coordination fee 3 patient-centered medical oncology home (based on NCQA specialty home criteria)
Practice receives care coordination fee and begins to put in place the basic elements of a PCMH
Practice receives care coordination fee and finalizes basic elements of a PCMH
Practice must achieve level I recognition from NCQA
Practice must achieve level II recognition from NCQA
Practice must achieve level III recognition from NCQA (fully functioning medical home); higher adjustments for higher performers (whether through NCQA criteria or actual performance on ER visits, hospitalizations)
Abbreviations: ASP⫹6, average sales price plus 6%; CMS, Centers for Medicare and Medicaid Services; ER, emergency room; MEI, Medicare Economic Index; NCQA, National Committee for Quality Assurance; PCMH, patient-centered medical home; QOPI, Quality Oncology Practice Initiative.
Cancer Therapy Management Fee The current buy and bill system for chemotherapy drugs is viable for many practices; however, it puts the physician at risk for copays, bad debt, denials of coverage, and substantial overhead costs. We believe it is possible to structure a model that would allow interested practices to explore alternatives, maintain current revenue levels, and avoid disrupting services currently offered to their patients by redirecting the anticipated reimbursement from the ⫹6 part of ASP⫹6 into a cancer therapy management fee, which would be divorced from the actual cost of the drug. Such a system could be constructed as follows: drugs would be paid at acquisition cost (“pass through”), and the ⫹6% of the 256
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ASP⫹6 component would be replaced with a cancer therapy management fee. The 6% from the total of all drugs paid by Medicare to oncologists would be divided equally across patients receiving active chemotherapy during the base year, and this aggregate amount would be redesignated for use to support the cancer therapy management fee, which would be paid on a monthly basis. The effect would be income neutral; performance, quality improvement, and inflation would dictate further increases. This model offers CMS the potential for cost savings and cost avoidance. First, because the management fee would be adjusted each year based on performance coupled with an inflationary index, increases would not be as great as those based on average price of drugs. Comparing a Medicare Economic
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Phase 1
Potential Approaches to Payment Reform in Oncology
Pathways Pathways have been identified as a way to minimize unexplained variations in cancer care and to reduce cost by minimizing or eliminating low-value or clinically questionable services. For the purpose of this document, the term “pathways” refers to “value-based pathways,” which includes consideration of value as an inherent part of pathway development. Many pathways currently in use are not value based; real cost savings may be realized by the inclusion of value as a requirement for pathway use in the Medicare program. The anticipated potential of pathways to improve care and decrease resource consumption has many private insurers now requiring their use in certain patient populations. The actual impact of pathways on cost has been variable and, for the most part, modest. However, many believe that, if used properly, pathways have the potential to stabilize cost and increase adherence to evidence-based practices. For this reason—and because a growing number of practices have chosen (or are required) to use them—it seems appropriate to leverage this trend as one Copyright © 2014 by American Society of Clinical Oncology
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means of achieving payment reform and/or positive payment updates. We suggest that oncologists be allowed to choose from among existing pathways those that work best for their specific patient population, and that incentives be linked to pathway adherence. Over the course of pathway implementation, CMS will be able to compare costs (based on claims data) and quality (based on QOPI participation) among practices that use pathways versus practices that choose not to do so. It is critical to note that certain populations of patients will have legitimate clinical reasons that they cannot be treated “on pathway” as a result of comorbidities, poor performance status, and/or intolerance of recommended therapy. A critical feature of any pathway program will be inclusion of a mechanism that allows patients to be treated “off pathway,” and that does not penalize physicians for caring for a sicker, more at-risk patient population.
Episodes of Care or Bundled Payments Episodes of care or bundled payments have been proposed by multiple stakeholders as a potential cost-saving mechanism. These structures are already in place in the hospital setting (eg, dialysis) and certain other specific conditions but have not yet made their way into many private practice settings. The complexity of cancer treatment and the many specialties involved make a bundled approach to payment challenging. Services provided by surgeons, radiation oncologists, and medical oncologists/hematologists would have to be considered and integrated into the bundle. Initially, we recommend demonstration of a limited bundle, comprising medical oncology services for a specific condition, to better understand overall feasibility and to inform a strategy for inclusion of all services needed to provide the full spectrum of care for a given patient. We believe this approach has potential and would suggest an adjuvant colon cancer bundle as one option available for oncologists to select. Adjuvant treatment of stage III colon cancer has the advantage of already being quite consistent across practices, and CMS would have the ability to compare costs and quality (based on claims data and QOPI, respectively) of practices that use the bundled payment versus those that do not, and eventually to offer the bundle—if successful—to a broader group of participants.
Care Coordination and the PCMH The PCMH is often cited as one of the most promising models for comprehensive patient care and cost savings. Although originally proposed in the primary health care setting as early as the 1960s, the PCMH has recently seen success in the form of improved patient care and decreased resource use in an oncology setting. The goal of the PCMH is to put the patient at the center of practice activities, ensure seamless coordination of care, and aggressively pursue symptomatic and preventive care. These activities, when successfully realized in the oncology setting, can result in decreased use of resources, fewer emergency department visits, and decreased numbers of hospitalizations. •
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Index– based management fee, for example, to the expected growth trajectory of drugs (National Health Expenditures, Medicare drugs) shows potential savings as high as $1 billion over 10 years. Note that this comparison does not take into account possible changes in physician prescribing habits over this same 10-year period, changes that, in theory, could either blunt or magnify the savings achievable under this model. If, however, physicians’ drug choices are affected by self-interest, uncoupling reimbursement from drug choices should result in additional savings. Second, trading the ASP add-on for a management fee stabilizes reimbursement and avoids the likely result if policymakers pursue their stated intention to move toward ASP⫹4 or lower. Reductions of that magnitude could cripple practices enough that they merge with hospitals or close their doors altogether. Either way, care would move to more costly hospital settings. Before such a scheme is considered for national implementation, historic Medicare claims data should be analyzed over 1 or more years to obtain a management fee estimate that can be modeled by individual practices and clinics. Further, we believe oral drugs should be included in this test and that the management fee should be based on both the current 6% add-on for infused drugs and the amount that would be derived by calculating 6% for all oral chemotherapy in a given year. Oral drugs represent the same— or sometimes even an enhanced—level of clinical management as that associated with infused chemotherapy, and should be part of the calculation for the cancer therapy management fee. If a management fee is to work in practice, a critical area to address within this proposed model is the logistics of drug distribution. Currently, a complex yet efficient system involving manufacturers, primary and secondary distributors, group purchasing organizations, pharmacies, specialty pharmacies, and physician offices is in operation, which allows for price shopping and “just in time” inventory and patient treatment.
American Society of Clinical Oncology
Summary The health care reimbursement environment is changing quickly, and physicians must be leaders, not followers, of any payment reform process. Government and private payers have long been seeking savings wherever they can find them, and they are engaged in examining alternative payment models. CMS Medicare Director Jonathan Blum has suggested that ASP⫹6 may drive physician behaviors in ways that do not serve beneficiary access and value: “Expensive injectable cancer drugs are one of the most difficult issues in addressing Medicare spending in Part B . . ..about 10 drugs account for a disproportionately large portion of Part B spending . . . CMS is considering new pay systems for oncology services, including the way that expensive cancer drugs are reimbursed under Part B . . . But the payment
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system needs to be changed for all oncology services, not just drugs, and the replacement likely will be ‘global’ in nature.” On April 1, 2013, automatic sequester cuts decreased Medicare reimbursement across the board by 2% but had a singularly larger impact on Part B drugs, which fell to a new reimbursement rate of ASP⫹4.3%. Because the ASP is essentially fixed (ie, the prices that practices were paying for drugs remained the same before and after the sequester) the entire cut was felt in the 6% add-on, which led to an effective cut of 28% (factoring in patient copays, which were not affected by sequestration). Also in April 2013, President Obama released his proposed fiscal year 2014 budget, which recommended a reduction in Part B drug reimbursement from ASP⫹6 to ASP⫹3, a cut designed to “reduce overpayment of Part B drugs.” Oncologists must be prepared to engage meaningfully in payment reform discussions; the future care of their patients and the health of the field may depend on it. Pushed by unprecedented economic pressures, the health care system is being challenged to ensure the best use of increasingly limited resources. At the same time, providers are increasingly being held to account for delivering high quality, evidence-based care to their patients. Oncology is a special focus because of the patient complexity, the life-threatening nature of these diseases, and headline-grabbing prices of therapies. We believe the overall fee-for-service system will no longer dominate as the model for physician payment, instead giving way to prospective payment models. The question is, when? And what will take its place? In this article, we offer some concepts that could be tested and that would demonstrate that oncologists are prepared to lead efforts to a more rational and stable payment system, one that supports high-quality care for the patients we serve. Author’s Disclosures of Potential Conflicts of Interest The author indicated no potential conflicts of interest. Corresponding author: Laura Trent, American Society of Clinical Oncology, 2318 Mill Rd, Alexandria, VA 22314; e-mail: [email protected].
DOI: 10.1200/JOP.2014.001267; published online ahead of print at jop.ascopubs.org on April 15, 2014.
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The successful functioning of a PCMH and the resultant savings are heavily dependent on the use of health information technology. For many practices, the initial investment required can be overwhelming. Although the US Department of Health and Human Services has offered incentives for electronic health record adoption, not all practices have been able to take advantage of these incentives, and even for those who have, there are significant additional HIT costs associated with a fully functioning PCMH. We propose giving practices an opportunity to phase in an oncology medical home. This period would begin in phase 1 with a new “care coordination” fee, which would recognize the activities associated with coordinating the complex care of cancer patients. Over the first two phases, practices would receive this fee and would be expected to begin making the practice improvement necessary to implement the basic elements of a PCMH; by the third phase, practices would attempt to achieve Specialty Program Recognition through the National Committee for Quality Assurance accreditation process, advancing through the different levels of accreditation to their ultimate designation as a level III medical home. Payment adjustments would be linked to achievement of accreditation, with potential additional adjustments based on measurable outcomes such as hospitalizations and emergency department visits.
