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Medicare Launches New Payment Model for Cancer Care

By Rebecca Adams, CQ Roll Call

February 12, 2015 -- Medicare cancer patients will have access to 24-hour care under a new episode-based payment model announced by the Centers for Medicare and Medicaid Services (CMS).

Physicians that provide cancer treatment who want to participate in the coordinated care initiative must apply by April 23.

Medical professionals who are part of the program will have to meet performance standards and share information more broadly with other providers in order to coordinate care, said CMS officials in a press release.

The new initiative comes after Health and Human Services Secretary Sylvia Mathews Burwell announced on Jan. 26 that the agency wants to link 30 percent of traditional, fee-for-service Medicare payments to quality or value through alternative payment models such as accountable care organizations or bundled payment arrangements by the end of 2016. 

The oncology program is the second specialty care model that CMS developed. The agency previously announced that it would use a different payment model with enhanced care for people with end stage renal disease.

CMS is hoping that other payers also will adopt the model “to leverage the opportunity to transform care for oncology patients across a broader population,” said officials in the press release. Insurers and state officials that want to be part of the program should send a letter by March 19.

Physician practices will get two types of payments: monthly care management payments for each Medicare fee-for-service beneficiary cared for during a six-month episode and performance payments.

The monthly care management payments are $160 per patient.

CMS also will track how physicians perform on a number of quality measures, which will be used to determine the performance-based payments. Physicians will be rewarded if they lower costs and improve the quality of care over each six month episode of care.

To be eligible to participate, physicians have to use an electronic health record certified by the Office of the National Coordinator and attest that they meet the requirements of the second stage of so-called meaningful use health IT rules by the end of the third performance year.

The payments would cover all Medicare Part A inpatient and Part B outpatient care that patients get, as well as some prescription drugs. The monthly management fee will end if patients go into hospice end-of-life care.

Oncologists were somewhat disappointed. The American Society of Clinical Oncology (ASCO) has developed its own model. Oncologists said that the six-month period was arbitrary. Their model bases a monthly payment on the phase of treatment a patient is in.

Other key differences between the new CMS model and the oncologists' proposal are that ASCO’s plan would give physicians more flexibility to pay for services that wouldn’t be covered under the CMS plan. ASCO officials also said that oncologists would be held accountable for all of the patients’ care under the administration’s plan, while under the ASCO proposed model, oncologists would not be penalized if a different provider didn’t perform well. The oncologists’ association also said that payments under the CMS proposal would differentiate patients only by the type of cancer they have, while under the ASCO plan, payments would be adjusted by the complexity of the case and the toxicity of the treatment.

“While CMS is to be commended for seeking new approaches to payment, we are disappointed they have chosen to pursue only one model—and one that continues to rely on a broken fee-for-service system,” said Richard Schilsky, Chief Medical Officer of the American Society of Clinical Oncology.  “ASCO looks forward to working with both public and private payers to explore new payment strategies that better reflect modern oncology practice and support high value, patient centered care.”

The American Cancer Society applauded the administration’s action.

The effort "holds the potential to advance cancer treatment and the coordination of care,” said American Cancer Society Cancer Action Network President Chris Hansen. “The model will leverage the growing adoption of patient-centered care system-wide, with a critical emphasis on shared decision-making, advanced care planning, participation in clinical trials, outcomes measurement and other essential improvements in health care delivery that could save more lives from cancer.”

More than 1.6 million Americans are diagnosed with cancer each year, and most of them are covered by Medicare.

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