Oncology Rounds

So far, Medicare's Oncology Care Model isn't saving money—or significantly improving care

by Lindsey Paul and Emily Heuser

Last month, CMS' Center for Medicare and Medicaid Innovation (CMMI) released a preliminary evaluation of the Oncology Care Model (OCM), covering the first three performance periods with episodes beginning on July 1, 2016 through Jan. 1, 2018. As a reminder, the OCM is CMMI's first cancer-specific alternative payment model that aims to decrease Medicare spending while improving quality of care for cancer patients.

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Keep reading to find out our top four takeaways from the report.

1. The OCM failed to reduce ED visits, hospitalizations, and spending at acute care hospitals

Participating practices implemented a number of new strategies to decrease ED visits and hospitalizations, which are two of the biggest opportunities for cancer programs to improve quality of care and reduce costs. Implemented strategies include offering access to urgent care, closely monitoring high-risk patients with outreach and follow-up calls, and expanding patient navigation and phone triage. But unfortunately, these efforts have proved futile thus far. 

Practices saw no reduction in ED visits and hospitalizations, and patients didn't show improvements in symptom management or adherence to oral chemo. Accordingly, spending on hospitalizations at acute care hospitals (ACHs) didn't change. However, CMMI observed a $124 decrease in payments per beneficiary per six-month episode to "other inpatient hospitals" (OIPs), such as PPS-exempt cancer hospitals.

Although the number of ACH hospitalizations remained constant, CMMI reported a slight but statistically significant 0.184-day decline in hospital length of stay during the third performance period, suggesting a possible positive trend to look out for in later periods.

2. Participating practices lowered spending in some areas of end-of-life care

Improving the care delivered at the end of life (EOL) is the third major opportunity for cancer programs to improve quality of care and reduce costs for their patients. OCM practices saw a 1.1% decline in hospitalizations in patients' last 30 days of life, leading to a $672 decrease in EOL care spending per beneficiary per episode. Interventions such as increasing access to palliative care and expanding advance care planning might have contributed to these improvements. However, there was no change in ED visits in the last month of life or in the use, timing, or duration of hospice care.

3. The OCM didn't incentivize practices to limit low-value treatments

Physicians continued to prescribe expensive yet only marginally more effective cancer therapies rather than higher-value treatments. They didn't change their selection habits for chemo regimens, even when less expensive and equally effective options were available. Similarly, radiation therapy and outpatient E&M service patterns remained the same despite national guidelines promoting higher-value alternative treatment options in many cases. The number of imaging services did decline, but not significantly.

On the bright side, this means practices didn't restrict access to high-priced beneficial medicines or avoid treating high-risk or high-cost patients, which was an initial concern. But there is evidence that physicians could have done more to limit spending while maintaining equivalent patient outcomes, such as switching to biosimilar and generic drugs, employing hypofractionation, and restricting antiemetic use based on clinical guidelines.

4. Medicare lost $154.3 million in the first two performance periods of the OCM

Unsurprisingly given the results outlined above, the OCM didn't reduce care spending enough to offset the monthly enhanced oncology services (MEOS) payments and performance-based bonuses granted to participating practices. Consequently, Medicare lost $89 million during the first performance period and $65 million during the second performance period. Medicare spending data for the third performance period was not available at the time the report was published.

While Medicare Part A payments declined $119 per beneficiary per episode (likely attributable to reduced spending at OIPs), Medicare Part D payments increased $160 per beneficiary per episode, outweighing the Part A savings. This increase is consistent with rising drug prices and the adoption of new and expensive therapies. Medicare Part B payments stayed the same.

Interestingly, results varied by race and beneficiary risk. Spending per episode significantly decreased among minority beneficiaries (-$576 per beneficiary) but did not significantly change among non-minority beneficiaries (-$46 per beneficiary). Spending decreased among high-risk patients and increased among low-risk patients. Beneficiary risk was defined using Hierarchical Condition Category (HCC) scores, which are assigned based on patients' demographics and diagnostic histories, including comorbidities. The reason for these differential outcomes is unclear. It's possible that the OCM requirements were more conducive to reducing costs among minority and high-risk patients, or that practices targeted their cost-reduction efforts toward their minority and high-risk patient populations. The race- and risk-based differences could also potentially be related to overlaps between patients' race and risk level.

More analysis is needed to understand why the OCM didn't have more of an impact on spending or patient outcomes

The results from the first three performance periods suggest that the care transformation requirements and practice incentives weren't significant enough to improve overall quality of care or reduce overall Medicare spending thus far. However, it's somewhat reassuring that at least quality of care didn't deteriorate during these initial performance periods, and patients continued to rate their care highly. Interpreting these results will require deeper evaluation by CMMI and could inform the design of the Oncology Care First (OCF) Model. The OCF is the proposed Medicare alternative payment model expected to replace the OCM after its completion.

Keep in mind that the CMMI report only covers the first three performance periods of the OCM, which is now scheduled to continue through June 2022 due to the Covid-19 pandemic. Despite disappointing results, this initial evaluation demonstrated cost-savings for high-risk patients and fewer EOL hospitalizations, both of which will hopefully last as practices continue to implement the OCM requirements. It's also possible that we'll see better outcomes in other areas in subsequent performance periods. Many of the requirements necessitated significant investment and administrative and practice change, so patients may not have benefited from their full value in these initial performance periods

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