Oncology Bundling Model Aims to Incentivize Doctors

Gregory A. Freeman, March 15, 2016

Bundling reimbursements for cancer treatment uses evidence-based protocols and outpatient clinics, and is intricately related to improving outcomes.

This article first appeared in the March 2016 issue of HealthLeaders magazine.

The considerable cost of oncology care represents a challenge as the healthcare industry faces increasing pressure to cut costs. Bundling cancer care is emerging as a way to provide quality care for less money, but that will require significant changes to the traditional approach to cancer care, according to some healthcare leaders at the forefront of this initiative.

Signaling the government's desire to bring down the cost of cancer care, the Centers for Medicare & Medicaid Services recently announced the Oncology Care Model, which aims to incentivize cancer doctors to reduce hospital and pharmacy costs. Starting in 2016, the cancer payment model will pay qualifying oncologists $160 per month for six months for each beneficiary receiving chemotherapy. But oncology clinics and hospitals will be required to make certain changes to the way they meet patient needs, including providing round-the-clock outpatient clinics to manage common drug therapy complications that might otherwise send their patients to the hospital.

Most of the changes are intended to make oncology more patient-centered, because successfully bundling reimbursement for cancer treatment is intricately related to improving outcomes, which in turn requires better patient integration in the care plan.

Using evidence-based protocols and including patient measures of quality of care, the model also incentivizes surgeons, radiologists, and primary care providers to improve communication and coordination, further reducing costs as a result of better care coordination. Lancaster (Pennsylvania) General Health/Penn Medicine has applied to the CMS demonstration project, and Randall Oyer, MD, medical director of the oncology program at Lancaster General's Ann B. Barshinger Cancer Institute, says the CMS project exemplifies the right way to approach cancer care in the future because it is more patient-centric.

"We thought that one-third of the changes required for being compliant with the project we had already accomplished, and another third we were already developing," he says. "Only a third of the changes would be new work for us."

Gregory A. Freeman

Gregory A. Freeman is a contributing writer.

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