Medicare Launches Performance-Based Cancer Payment Model

The Centers for Medicare and Medicaid Services (CMS) has launched a new multi-payer cancer payment model that reimburses oncologists for episodes of care surrounding chemotherapy treatment, part of a larger effort by the agency to reward physicians based on quality rather than quantity of care.

Practices that enroll in the Oncology Care Model will receive monthly payments of $160 for each Medicare fee-for-service beneficiary undergoing chemotherapy, according to CMS. At the end of each 6-month episode of care, physicians will be eligible for additional financial incentives based on achieving or exceeding quality and cost targets. Commercial insurers may also participate in the program and design their own incentive packages.

“With the Oncology Care Model, CMS has the opportunity to achieve three goals in the care of this medically complex population who are facing a cancer diagnosis: better care, smarter spending, and healthier people,” said Patrick Conway, MD, CMS chief medical officer and deputy administrator for innovation and quality. “We aim to provide Medicare beneficiaries struggling with cancer with high-quality care around the clock.”

The care model is part of a broader initiative by CMS to revamp its payment system. Last month, the agency announced plans to convert 30% of fee-for-service Medicare payments to alternative payment models, such as Accountable Care Organizations or bundled payment arrangements, by the end of 2016, and 50% by 2018. It also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018.

Under the Oncology Care Model, a 5-year program slated to start in the spring of 2016, participating physicians will submit quarterly reports on quality measures, similar to those used in the Physician Quality Reporting System, and receive regular feedback on their performance. Incentive payments will be calculated based on a formula that takes into account the difference between a predetermined target price for services and a practice’s actual expenditures, as well as the practice’s performance on a range of quality measures.

The new payment model applies to almost all types of cancer and chemotherapy regimens, including hormonal therapies such as aromatase inhibitors for breast cancer and anti-androgen therapy for prostate cancer. Physicians receive financial incentives for working with multiple payers beyond Medicare, thus reaching a broader spectrum of cancer patients.

In order to participate, practices must comply with the following:

• provide basic patient navigation services;

• document a care plan that contains the 13 components outlined in the Institute of Medicine report, “Delivering high-quality cancer care: charting a new course for a system in crisis;”

• Provide 24/7 patient access to clinicians;

• Follow nationally recognized clinical guidelines;

• Use data to drive quality improvement; and

• Use a certified electronic health record system and comply with Stage 2 of meaningful use by the end of the third performance year.

To apply, interested practices must submit a letter of intent by 5:00 p.m., EDT on April 23, 2015, and an electronic application by June 18. Links to forms and applications are online.