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Should my cancer program participate in the OCM?
From a financial standpoint, there are two key considerations.
First, OCM participants will earn additional per beneficiary per month payments (PBPM) on top of their regular Medicare fee for service (FFS) payments and have the opportunity to earn a performance-based payment. But it’s not clear that the additional revenues will be sufficient to cover the cost of participating in the model.
Second, hospital leaders must be aware of and plan for a reduction in downstream revenues. One of the stated goals of the OCM is to reduce chemotherapy patients’ ED visits and hospitalizations. If successful, hospitals will lose revenues from those services, and it’s unlikely that the additional revenues earned through OCM participation will be enough to offset the losses.
What are the strategic considerations to take into account?
There are several potential strategic benefits associated with participation in the OCM, and for some organizations, they may outweigh the financial costs. For example, participating practices will be able to:
- Gain experience operating under a value-based payment model
- Gain access to additional performance data and benchmarks
- Use the OCM’s framework to align internal stakeholders and guide care transformation efforts
Additionally, the OCM’s payment structure minimizes providers’ exposure to financial risk. Performance-based payments will initially follow a one-sided risk arrangement, meaning that practices that surpass cost and quality goals have the potential to earn a bonus, but practices that fail to meet their targets will not be penalized. Starting in the third year of the model, participants will have the opportunity to switch to a two-sided risk arrangement, but it is optional, and practices will be able to switch back to one-sided risk every 6 months.
The real financial risk for participants is that they will spend more to achieve the OCM’s practice requirements than they earn in additional revenues from participation. And they will have to make those infrastructure investments upfront – before earning the additional revenues - so that they meet all practice requirements at the start of the program.
Consequently oncology leaders who are considering participation should conduct a rigorous gap assessment to determine the size of investment they will need to make.
Aren’t the OCM requirements consistent with the investments that cancer programs are already making to meet Commission on Cancer accreditation standards?
The OCM requires participating practices to meet six requirements:
1. Provide patients 24/7 access to a clinician who has real-time access to their medical records
2. Attest to Stage 1 of meaningful use of EHRs by the end of the first year of the program with intention to attest to Stage 2 by the end of the third year
3. Use data for continuous quality improvement
4. Provide navigation services
5. Document a comprehensive cancer care plan that contains the IOM’s 13 recommended components
6. Use nationally recognized clinical guidelines
Although many oncology practices have already invested in these areas, few, if any, have completely implemented all of them.
The IOM care plan requirement poses a particular challenge because it includes components such as advanced care planning, survivorship plans, and providing patients with estimates of the total costs of their care as well as patients’ out of pocket costs. For most oncology practices, providing these services would require significant investment in new infrastructure, IT, and staff.
In addition, the OCM requires practices to report performance on 32 quality measures. Most can be derived from claims data, but 11 of the measures require the practice to report their performance, and in many cases, practices will have to use manual abstraction.
Does a practice need to meet every requirement for every Medicare FFS beneficiary?
The OCM requires participants to provide enhanced services for all Medicare FFS beneficiaries. The RFA does not include any specifics about how the OCM will monitor or enforce the practice requirements.
The Commission on Cancer has found that some of their new standards, such as providing survivorship care plans to every patient, are unaffordable for most cancer programs. Consequently, they have softened some standards and given cancer programs leeway in meeting others.
It’s unclear whether CMMI will make similar adjustments or what circumstances would force a re-examination of the requirements.
Who is eligible to participate in the OCM?
Any practice that provides care for cancer patients undergoing chemotherapy and that bills E&M under the Medicare Physician Fee Schedule may apply to participate in the OCM. These include multi-specialty practices, solo practitioners, and hospital-aligned practices.
PPS-exempt cancer hospitals and TCPI participants may not participate in the OCM.
I see that the OCM is a multi-payer model. What does that mean?
CMMI is inviting commercial payers to apply to participate in the OCM as well. Participating payers would adopt a similar value-based model for paying OCM practices, although CMMI would allow them to alter some of the details.
The intention is to relieve participating providers of the burden of managing different patients under different reimbursement models – what we at the Advisory Board often refer to as the “foot in two boats” problem.
CMMI has indicated that they will give extra consideration to practices that apply to participate in OCM with other payers.
What kinds of practices are good candidates to participate?
There are two categories of practices that would benefit from participation:
- Practices that can fulfill the OCM practice and quality reporting requirements with minimal additional investment
- Practices that want to transform cancer care to improve quality and reduce costs, and have the capital required to meet the practice requirements at the start of the model
The OCM’s performance-based payments are calculated by comparing a practice’s historical total cost performance to the practice’s total costs during the model years and then factoring in quality performance. So the practices that are able to make the biggest reductions in total costs while also hitting quality targets have the most to gain.
Should I submit a letter of intent (LOI)?
Practices must submit an LOI by May 7, 2015 in order to be eligible to submit an application for the OCM. LOIs are non-binding. So if you are considering participation, submit an LOI.
Applications are due June 18, 2015.
Are you considering participation in the OCM? What additional questions do you have about the model? I’d love to hear from you. Please contact me directly.