Design Challenges of an Episode-Based Payment Model in Oncology: The Centers for Medicare & Medicaid Services Oncology Care Model

Abstract

The Centers for Medicare & Medicaid Services developed the Oncology Care Model as an episode-based payment model to encourage participating practitioners to provide higher-quality, better-coordinated care at a lower cost to the nearly three-quarter million fee-for-service Medicare beneficiaries with cancer who receive chemotherapy each year. Episode payment models can be complex. They combine into a single benchmark price all payments for services during an episode of illness, many of which may be delivered at different times by different providers in different locations. Policy and technical decisions include the definition of the episode, including its initiation, duration, and included services; the identification of beneficiaries included in the model; and beneficiary attribution to practitioners with overall responsibility for managing their care. In addition, the calculation and risk adjustment of benchmark episode prices for the bundle of services must reflect geographic cost variations and diverse patient populations, including varying disease subtypes, medical comorbidities, changes in standards of care over time, the adoption of expensive new drugs (especially in oncology), as well as diverse practice patterns. Other steps include timely monitoring and intervention as needed to avoid shifting the attribution of beneficiaries on the basis of their expected episode expenditures as well as to ensure the provision of necessary medical services and the development of a meaningful link to quality measurement and improvement through the episode-based payment methodology. The complex and diverse nature of oncology business relationships and the specific rules and requirements of Medicare payment systems for different types of providers intensify these issues. The Centers for Medicare & Medicaid Services believes that by sharing its approach to addressing these decisions and challenges, it may facilitate greater understanding of the model within the oncology community and provide insight to others considering the development of episode-based payment models in the commercial or government sectors.

Impact of psychiatric comorbidities on health care utilization and cost of care in multiple myeloma

“…Total Medicare claim amounts were summed for all patients for inpatient and outpatient visits within the first 6 months of MM care, because a period of 6 months reflects definition of an episode of care in the Centers for Medicare & Medicaid Services' Oncology Care Model (episodebased payment model). 20 Similar data were collected on MM patients with ICD-9 codes for any psychiatric disorder (supplemental Table 1) and separately, depression, because depression was the most common psychiatric diagnosis in our study cohort (supplemental Table 2). A patient was flagged with any of the respective conditions if the code appeared once in an inpatient setting or twice in an outpatient setting.…”

Policy analysis of access to and reimbursement for nonpharmacologic therapies for cancer‐related fatigue

“…Quality measures based on the Oncology Care Model (OCM) practices would be required to achieve this option. The OCM was developed by the Centers for Medicare & Medicaid Services (CMS) to provide better‐coordinated care and requires an agreement between CMS and providers to ensure higher quality of care (Kline, Adelson, et al, ; Kline et al, ; Kline, Muldoon, et al, ). The OCM consists of payment arrangements and financial and performance‐based reimbursements to providers based on the episodes of care addressing chemotherapy (Centers for Medicare & Medicaid Services, ; Kline, Adelson, et al, ).…”

“…Key requirements for OCM include the following: 24/7 access to a provider with real‐time access to medical records, use of electronic medical records, data evaluation for continuous quality improvement, presence of core functions of patient navigation, documentation of care, and treatment of patients with therapies recognized by clinical practice guidelines (Kline, Muldoon, et al, ). All the key requirements would be implemented in this option to assess, monitor, document, and refer to the evidence‐based therapies.…”

Cost‐effectiveness of the Collaborative Care to Preserve Performance in Cancer (COPE) trial tele‐rehabilitation interventions for patients with advanced cancers

“…However, expenses rapidly mount from diverse sources including diagnostic testing, clinician visits, and symptom management, suggesting that an exclusive focus on any single charge category will fail to meaningfully improve the situation. Payment‐based solutions, such as bundled care and episode‐based reimbursement, have been slow to gain traction, and credible targets to ease patients’ financial strain remain elusive.…”