Preparing for Payment Reform in Cancer Care

Health Solutions

October 12, 2015

The US government and payer organizations are currently piloting new value-based payment models to reduce costs and improve the delivery of cancer care. Similar to other Alternative Payment Models (APMs), these approaches focus on realigning provider reimbursements with new clinical performance outcomes, quality of care metrics, and accountable spending. In turn, cancer care providers face several challenges in redesigning their practices to match the requirements of value-based APMs. Providers must develop new methods for data collection, adhere to the new standards of care, and optimize performance outcomes and resource use – all without negatively impacting the quality of care or exceeding cost targets.

The cost of cancer care is skyrocketing. By 2020, the National Cancer Institute estimates that the United States will spend $173 billion annually on cancer care – up from $125 billion in 2010. The increase in cost for cancer care is distinctly steeper than the cost trajectories of other medical specialties for a variety of reasons: the increased use of expensive drugs and chemotherapy treatments, the adoption of new and costly diagnostic tools, and the rising incidence of cancer among baby boomers. These unique factors, in conjunction with poor patient engagement, subpar care coordination and the inadequate use of palliative care in treatment plans, have all been drivers for payment reform in cancer care. In particular, providers have seen the gradual transition from the Fee-For-Service models (FFS) to value-based reimbursement models, such as:

  • Oncology Care Model (OCM): developed by Centers for Medicare & Medicaid Services (CMS)
  • Patient-Centered Oncology Payment Model (PCOP): developed by the American Society of Clinical Oncology (ASCO)
  • Independent Pilot Programs: developed by private payers, such as Aetna and UnitedHealthcare

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