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CMS Announces Creation of New Oncology Payment Model

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Yesterday, the Centers for Medicare & Medicaid Services (CMS) announced the launch of a new payment model designed to support better care coordination for Medicare beneficiaries undergoing chemotherapy. The Oncology Care Model (OCM), developed by CMS' Innovation Center, was created in response to feedback from industry stakeholders that a new way of paying for and delivering oncology care was needed. CMS is seeking the participation of physician practices and payers to establish meaningful metrics for the new payment model.

According to a fact sheet accompanying the press release, the OCM will target beneficiaries receiving chemotherapy treatment and the spectrum of care provided to a patient during a 6-month episode following the start of chemotherapy. The OCM will use a 2-part payment approach for participating oncology practices: 1) a monthly $160 per-beneficiary care management payment for Medicare Fee-for-Service (FFS) beneficiaries for the duration of the episode of treatment; and 2) a performance-based payment for OCM episodes, determined based on the practice's achievement and improvement on quality measures listed in the Request for Applications.

During the first 2 performance years, all participants will be in a 1-sided risk arrangement, where the OCM applies a 4% discount to determine the target price for participants' performance period episodes. Medicare will retain that 4%, and participants will be eligible to retain a portion of the difference between the target price and actual expenditures. In the 1-sided risk arrangement, an OCM participant that generates reductions in expenditures below a target price will be eligible to receive a performance-based payment.

Starting in performance year three, participants will have the option to select a 2-sided risk arrangement, where OCM-FFS will apply a 2.75% discount to determine target prices. In the 2-sided risk arrangement, a participant whose performance year actual expenditures exceed the target price would be financially responsible for the additional costs.

In addition to the monthly care-coordination and potential performance-based payment, participants will receive regular Medicare FFS payments during the model.

CMS is also seeking the participation of payers from across the spectrum-private, Medicare Advantage (MA), managed Medicaid plans, as well as state programs are all encouraged to apply-and stated payers would be able to "design their own payment incentives to support their beneficiaries, while aligning with the Innovation Center's goals for care improvement and cost reduction."

Parties interested in participating in the OCM can learn more at CMS' OCM webpage. Additional OCM resources include frequently asked questions, letters of intent, and application templates.

The above excerpt was featured in the 2/13/2015 issue of Health Policy Weekly.  Health Policy Weekly, a weekly e-newsletter delivered every Friday, recaps legislative and regulatory developments and healthcare reform news that impacts the healthcare industry.  Health Policy Weekly is developed by Xcenda as a complimentary service for clients of AmerisourceBergen Corporation as well as industry decision makers within the manufacturer, managed care, healthcare provider and pharmacy community.  Click here for more information or to subscribe to Health Policy Weekly.

 

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