Bundled Cancer Payments Come with Challenges

Medicare's Oncology Care Model looks to be better for many patients, but oncologists are concerned that it does not account for stage of cancer or drug costs.

Medicare's oncology bundled payment program, which began July 1, will benefit many cancer patients, giving them 24/7 access to doctors and navigators to guide them from one appointment to the next.

But the benefits of the Oncology Care Model to hospitals and oncologists may be harder to find.

Some physicians worry that the payments don't account for the high cost of some drugs. And if high quality care ultimately means less inpatient care, hospitals will end up with empty beds.

Related: Oncology Care Model Kicks Off

The University of Michigan Comprehensive Cancer Center, got a head start on implementing elements of the OCM program, which provides performance-based payments for episodes of care triggered by the start of chemotherapy.

The academic medical center is home to one of the nearly 200 oncology practices trying out the program.

Participating practices have to offer a range of services. One is patient navigation. While some hospitals offer the service as a "marketing tool," at UMCC a customized navigation program is offered, says center director Alon Weizer, MD.  

One approach is taken with educated, insured patients who don't need much help and another with patients who lack resources, such the homeless.

While it would be great to have all patients engaged in their care, that's not always the case, he says. Some need help lining up the social supports they need to get through cancer treatment.

"We spend a lot of time trying to figure out how are they going to get a ride, how are we going to pay for things. Are they getting their other medications? What does their nutrition look like at home?" Weizer says.

He's excited about the positive changes, but he acknowledges that adopting OCM  might be a challenge for hospitals. Unnecessary emergency rooms visits and end-of-life inpatient care are high costs services that often don't improve outcomes.

Other changes, such as early palliative care and symptom management, may also mean a drop in admissions, Weizer says.

Still, he thinks that hospitals will benefit from the program in the long term as payers move away from a fee-for-service toward a value-based payment models.

The hospitals with practices participating in the program range from academic medical systems such as the University of Michigan, which is comprised of three hospitals with a total of 1,000 beds, to the 148-bed Coosa Valley Medical Center in Sylacauda, Alabama.  

Blase Polite, MD, is the chair of American Society of Clinical Oncologists government relations committee. He is also the chief quality officer for oncology at University of Chicago Medicine, 568-bed system that is also participating in the OCM. 

ASCO has been suggesting that CMS adopt its physician payment model, which the group believes "better matches payments to the work performed by oncologists and their care teams."

Some Concerns

One of the key concerns about OCM is that the payments do not account for the costs of drugs, Polite says. Payments are based on diagnosis alone. For example, they do not account for stage of cancer or genetic mutations that require specific medications.  

"If someone comes in with a driver mutation in lung cancer, all of the sudden they are relegated to a much more expensive chemotherapy," he said. "Within the same cancer, you can have wildly different costs."  

A large system like his should have the volume to bear those costs. But Polite says the OCM could hurt smaller practices with a large percentage of patients who need expensive drugs.

Weizer of Michigan says one of the biggest barriers will be culture change—getting the entire care team on board with the OCM. Still, he thinks the program will improve patient care.

Related: ASCO: No Abatement Seen in Aggressive End-of-Life Cancer Care

Weizer specializes in bladder and other urologic cancers and sees a lot of patients who come in for surgery or second opinions because they have received care that was of no benefit.

"One of the reasons that I think this is exciting is [that] hopefully, it is going to allow us to be paid for doing the right things for patients as opposed to doing more for patients," he said.