Expert Insight

Cancer payment policy: What these 7 updates from July mean for you

July 2023 was a busy month for cancer payment policy. We’re here to help oncology leaders make sense of it all. Learn about the seven most important changes, from the Enhancing Oncology Model to Medicare’s new cancer services, and how they'll affect your organization.

July was a busy month for oncology payment — the Enhancing Oncology Model (EOM) began, CMS updated the Outpatient Prospective Payment System (OPPS) and Medicare Physician Fee Schedule (MPFS), and a new plan was put in place to remedy 340B underpayments. Here, we’ve summarized the most important takeaways for cancer leaders.

1. The EOM began on July 1.

CMS’ new medical oncology value-based payment model kicked off with 44 participants, 23 fewer than the agency initially accepted to participate. Three commercial payers also signed on. Of the participating practices, 30 participated in CMS’ previous oncology alternative payment model, the Oncology Care Model.

The model will run for five years, and participating practices will be at risk for total cost of care and responsible for implementing several participant redesign activities. To learn more about the model, check out our FAQ here.

2. The 340B payment rate will remain at ASP +6% for 2024, and previous underpayments will be repaid with cuts to non-drug services.

Consistent with the Supreme Court’s decision in American Hospital Association v. Becerra last summer, 340B hospitals will continue to receive the same reimbursement rate as non-340B hospitals for outpatient drugs, including cancer therapies, in the short term. However, it's unclear whether CMS will maintain this higher 340B reimbursement rate in future years.

CMS will make up for unlawful reimbursement cuts from 2018–2022 by reimbursing 340B hospitals $9 billion in a lump sum payment sometime in the next year. Notably, to ensure budget neutrality, the agency plans to decrease outpatient payment rates by 0.5% from 2025–2041. This decision will have significant implications for both 340B and non-340B hospitals, which we discuss further in our predictions about the future of 340B.

3. Medicare will begin paying for several new cancer-related services in 2024.

CMS intends payment for each of these services to improve care access and support for cancer patients in alignment with the Biden administration’s Cancer Moonshot initiative.

a. Patient navigation: Starting in 2024, provider organizations will be able to bill for navigation services like referring a patient to appropriate support services, providing information on clinical trials, and addressing social determinants of health. Notably, providers can contract with public and non-profit third-party organizations for navigation services.

This proposal comes at an important time for cancer providers who have long complained about a lack of payment for support services. Reimbursement for navigation may lessen providers’ reliance on drug margins to fund these services, supporting the industry’s shift toward value-based payment by making provider risk assumption more palatable. It will also provide a helpful boost to EOM participants, who are required to offer navigation.

b. Caregiver training: New codes will pay clinicians for training unpaid family members, friends, or neighbors to help carry out patients’ treatment plans. Training can include a variety of strategies to improve symptom management, treatment adherence, and more.

With a growing cancer patient population and a projected shortfall of direct care workers, cancer patients will increasingly rely on informal caregivers. These new codes recognize the critical role caregivers play in cancer care and encourage a greater focus on caregiver training that may ultimately improve cancer patient outcomes.

c. Dental services linked to cancer treatment: Starting in 2024, Medicare will pay for certain dental services under Parts A and B, such as dental examinations or teeth removals, that are “inextricably linked” to cancer treatments, including:

  • Chemotherapy
  • CAR T-cell therapy
  • High-dose bone modifying agents
  • Radiation, chemotherapy, or surgery for treating head and neck cancer

In the MPFS proposed rule, CMS cites substantial evidence that cancer treatment can increase risk for serious dental infections and complications that can in turn worsen outcomes. In providing better access to dental care, this rule will have a significant positive impact on cancer patients.

4. Changes to the 2024 physician fee schedule will positively impact hematology/oncology but negatively impact radiation oncology.

The overall impact will be 2% for hematology/oncology and -2% for radiation oncology and radiation therapy centers. However, the effect on individual providers will depend on their patient populations and the mix of services they provide. Some radiation oncology providers have expressed concern about waning margins and potential practice closures. 

5. CMS is considering paying Indian Health Service (IHS) facilities more for high-cost drugs.

The agency expressed concern that with cancer drugs and oncology services becoming more expensive, IHS facilities might not be able to afford to provide them under the current payment structure. In the OPPS proposed rule, CMS is seeking comments on whether Medicare should pay IHS and tribally-owned facilities separately for high-cost drugs to guarantee continued access.

6. CMS made changes to the Oncology/Hematology specialty set.

For CY 2024, oncology and hematology clinicians who are eligible to participate in the Merit-Based Incentive Payment System (MIPS) will have the option to report on three new measures. The first assesses whether patients who have had an ambulatory palliative care visit feel heard and understood. The second looks at the proportion of patients with an identified health-related social need who are connected to a community service provider. And the third calculates gains in Patient Activation Measure Scores after 12 months. These new measures highlight CMS’ focus on patient-reported outcomes, social determinants of health, and patient-centered cancer care.

7. A new quality measure aims to prevent unnecessarily high radiation from CT scans.

The measure (known as the Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography in Adults measure) will calculate the percentage of eligible CT scans that either have an excessive radiation dose or inadequate image quality (due to low radiation dose). This measure effectively sets a standard for CT radiation doses. It is intended to reduce the harms of radiation exposure, such as heightened cancer risk, as there is evidence that the current radiation doses used for CT scans are higher than necessary. CY 2025 will be a voluntary reporting period, with mandatory reporting beginning in CY 2026.

For more information on the proposed payment updates, read Advisory Board’s Daily Briefing article on the 2024 MPFS and OPPS proposed rules.


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AFTER YOU READ THIS
  • You'll know about several oncology payment policy updates that occurred across July 2023.

  • You'll understand how payments for oncology services will change in 2024.

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