Oncology Payment Reform: Payers and Providers Discuss APM and Beyond

Everyone in healthcare is currently grappling with what payment reform will look like in the coming years and oncology is no exception. How do payers, providers, and health policy experts view the current changes in the system and where do they foresee changes in the coming years?

These were some of the topics discussed by a panel of experts at The Community Oncology Conference: Innovation in Cancer Care, held in Orlando, Florida, April 13-15, 2016. Panel members included Jeremy Behling, MBA, vice president of Operations & Practice Innovation, Florida Cancer Specialists and Research Institute; Michael Kolodziej, MD, national medical director, Oncology Strategies, Aetna, Inc; Edward J. Licitra, MD, PhD, medical oncologist from the Regional Cancer Care Associates, LLC; Kavita Patel, MD, senior fellow, The Brookings Institution, Washington, DC; Bhuvana Sagar, MD, medical director, Cigna Healthcare; Mark E. Thompson, MD, Oncologist, The Mark H. Zangmeister Center.

Commenting on the new alternative payment models (APMs), and particularly the recent Medicare Part B demonstration project, Patel said, “Medicare is doing a sprint here. The provisions in Part B represent just a slice of the pattern that we are seeing within say the orthopedic space.”

Thompson responded that there is a demonstration project in the APM space that has been proposed, but that it’s still in the making. “Many of us are feeling that time is ticking very quickly since MACRA [Medicare Access and CHIP Reauthorization Act of 2015],” he said. “And the only APM out there now is the OCM [Oncology Care Model]. But I am not sure that OCM is the right model for everyone.”

How about the payers? Are they developing innovative reimbursement methods in the APM space for oncology?

Kolodziej said that Aetna has been collaborating with providers that have participated in the Oncology Medical Home project and has successfully implement structured clinical pathways. “United, Anthem, and Cigna all have their own perspectives. They all look at reducing the cost of care and also improve the quality of care,” he said.

“Cigna has been in the primary care space for a while in oncology, and the model has the same intent as others in the field: simple for physicians to navigate, emphasizing a shared decision-making process, and patient-centricity,” Sagar told the audience. To which Kolodziej responded, “It’s important to note that even if we criticize CMS for all the pilots they are experimenting with, they are doing the exact same thing.”

How about the providers? Are they working with health plans to develop payment models that suit their practice?

“We have a good relation with Horizon in New Jersey,” said Licitra. “Many of these are episode-based pilots. To better understand where we stand in New Jersey and to understand variance in sites of service or physicians. We are working with Horizon to provide value for the choice of care patients choose,” he said.

So what’s not working? What do physicians, oncology clinics, and those who cover these services, think has failed in the system?

“The biggest is lack of data transparency,” said Behling. “We are involved in Accountable Care Organizations (ACOs) and other models, and it’s difficult to assess quality for the various health conditions of each patient if we don’t have easy access to their health data. OCM and Medicare’s model are a good start,” he added

However, measuring the quality of care delivered under OMH has been a challenge for Cigna, said Sagar. “How we measure quality and keep it meaningful is important. How do we understand building episodes? That’s what we are trying.” With the multitude molecular subtypes of each cancer, defining episodes of care is very complicated,” she explained. “We are definitely trying to change in-patient utilization and the Medical Home model is useful for that.”

How about the strength of the data that payers actually gather? Are there gaps that in the data that payers receive from clinics? Kolodziej pointed out that the data gaps create opportunities to improve on the payment models and also left room to improve on things such as length of stay. He emphasized though that the data from smaller practices is not big enough to draw meaningful conclusions. “These clinics just don’t have the volume, the number of patients you need to draw conclusions.” Since the data are not well powered, outliers can create a huge problem, according to Kolodziej.

The discussion then moved on to payment reform and what’s failing and what needs to change there.

“Practices that are a part of the ACO model have done well with the value-based modifier payment models, but they have no idea why,” said Patel. “On the contrary, there are practices that are proactive with quality improvement and monitoring their care delivery meticulously, but they often times don’t seem to perform well with the model. My biggest fear with some of the MACRA pieces is that we are going to have every subspecialty offer their own APM.”

Patel said that payers, including commercial, Medicare, and Medicaid cannot completely revamp their operations. They do need small, pilot demonstration projects to experiment with. “Its nicer to have models that looks cleaner,” she said.

So what’s coming next?

“There’s value-based contracting in the drug space,” said Sagar. She explained that while there are several pathways being developed in oncology, it’s important to figure out who’s the best person who can define them and also to understand best practices that can target drug savings. “Things like unnecessary imaging can be avoided to reduce utilization. The question remains ‘Can we do episodes that can include some of these nuances?’”

For Kolodziej, the future in oncology care lies with episode-based payment. “hat is happening is that both oncologists and payers are looking at what constitutes the outcomes-based trajectory. A local payer and provider can do it by sitting across the table. But I can’t…I have to think about all 50 states,” he said. He also believes that elimination of buy-and-bill and introduction of a management fee for oncologists—something that UnitedHealth did—is coming.

For Licitra, as a provider, care management is a challenge. “It’s about figuring out where do we stand with respect to our physicians and how do you modify physician behavior at every level. And at the end how do you provide value-based services?” Behling added that at their practice, their focus is on providing patients with a more comprehensive care. “We are trying to add value for our patients on the front end: navigation, nutrition, and social work,” he said.

According to Thompson, only 2 things change physician behavior: what’s in their wallet and how they perform compared to their peers. “So value does not trouble me. Because value is finally derived by physicians and their staff,” he said.