The Centers for Medicare and Medicaid Services (CMS) recently announced the Oncology Care Model, a new payment model for physician practices administering chemotherapy that aims to provide higher quality, more highly coordinated oncology care at a lower cost to Medicare. This week, we’re presenting several different perspectives on the Oncology Care Model and how it will impact patients, providers, and cancer therapies. Dr. John Cox also shared his thoughts earlier this week, as did NCCS CEO Shelley Fuld Nasso. Dr. Michael Ybarra, Senior Director, Alliance Development, PhRMA is the author of this post.

New Approaches to Paying for Cancer Care Will Benefit from a Patient Advocacy Perspective

The words “you have cancer” strike fear into our hearts. For patients, that news is often followed with emotional discussions of treatment options and confusing insurance lingo, which adds to the enormous stress patients and their families already suffer with a cancer diagnosis.


Post by Dr. Michael Ybarra, Senior Director, Alliance Development, PhRMA

With an emotional diagnosis like cancer in particular, patients want to rest assured that they are receiving the best, evidence-based care and have access to clear information about their treatment. Insurers and health care providers are experimenting with new models of care with the aim to improve quality and reduce the costs of cancer care. Medicare is now testing several of these models through its Center for Medicare and Medicaid Innovation (CMMI), including a recently announced model for cancer care. While these reforms have the potential to generate savings and improve quality, there is also a risk they will reduce quality and access to treatments. Patient advocates need to engage in the development and assessment of these models to ensure they support the high quality individualized care for patients.

Earlier this year, CMMI began developing the Oncology Care Model for Medicare as part of the federal government’s goal to transition Medicare payment from fee-for-service to “alternative payment models” or “value-based payments.” In our current health care system, doctors are paid based on what they do, or “fee for service.” If a physician sees a patient in the office, and he or she does a procedure, they get paid for performing that procedure. Alternative payment models instead seek to pay providers based on the quality of care they provide and its cost.

Thanks to the advocacy of groups like the National Coalition for Cancer Survivorship, the Oncology Care Model includes several requirements that are intended to improve patient experience in cancer care. These include requirements designed to promote care coordination and keep patients out of the hospital, like providing access to a clinician 24 hours, 7 days a week and designing care plans according to the standards endorsed by the Institute of Medicine. However, there is still work to be done to ensure that the aspects of the model that are designed to reduce the cost of cancer care also support better care for patients.

“One of the challenges with this approach is that each patient is different, and CMMI will be setting cost benchmarks with only limited information about the type of cancers treated by the practice.”
CMMI’s new Oncology Care Model will still pay physicians fee-for-service, but with incentives to reduce the cost of care. When a cancer patient starts chemotherapy, a six month “episode” would be triggered. During the episode, the doctor will be paid an additional $160 per month for care management to support the enhanced services they are required to provide, like 24/7 patient access. Over the course of treatment, they will also be eligible for bonus payments based on their ability to reduce the cost of care during the episode.

One of the challenges with this approach is that each patient is different, and CMMI will be setting cost benchmarks with only limited information about the type of cancers treated by the practice. Oncology is a rapidly evolving field, and research shows that many cancers are different on a molecular level. New precision medicines increasingly allow us to target treatment, but what works for one patient may not work for another. Cost benchmarks will need to be flexible to recognize these differences.

The short, 6 month window to achieve savings also raises some concerns because physicians will have limited tools at their disposal to reduce costs and will only get “credit” for reducing costs in the episode, not in the long term. For example, if a new drug comes to market that’s twice as expensive as the old drug but it’s potentially better, the doctor may choose not to prescribe that one because the cost is higher. Ideally, the Oncology Care Model would be designed to accommodate advancements in cancer care and recognize oncology practices that make changes that improve their patients’ quality of life over the long term.

Medicare’s new Oncology Care Model is an experiment, and several questions remain about how the model will work and what the impact will be on patient care. The decisions that CMMI will make as it finalizes the Oncology Care Model over the next few months will have implications for patients, and we want the patient voice to be heard. We applaud groups like National Coalition for Cancer Survivorship for their advocacy on this issue, particularly around care coordination and patient involvement in decision making on new policies. As Medicare tests and evaluates the OCM, continued involvement by patient advocates is critical to ensuring that reforms balance patient access, quality, and cost control.

About the Author: Michael Ybarra, M.D. is a board-certified emergency physician and Senior Director of Alliance Development at PhRMA. In his capacity at PhRMA, Dr. Ybarra leads alliance outreach to provider, multicultural, and LGBT organizations. His issue areas include communications with health care professionals and delivery reform. In addition to his work at PhRMA, Dr. Ybarra works clinically in the Emergency Department at MedStar Georgetown University Hospital. The views & opinions expressed in any guest post featured on our site are those of the guest author and do not necessarily reflect the opinions & views of the National Coalition for Cancer Survivorship. Read our blog and comment policies here.