Thursday, February 12, 2015

CMS Goes Live with New Oncology Payment Pilot Program

What happened? New Oncology Payment System at CMS?

On February 12, 2015, CMS released a request for applications for providers who can actually deliver under a new, packaged or bundled oncology care bundle.  The 33-page request for applications is here.   For the CMS press release, see here.  A concurrent Federal Register announcement is here.  A CMS webinar on the project is here.

Details after the break.

Spending on Cancer Care

Public health officials are focusing on the costs of cancer care.   American spending on cancer care was estimated at over $125B nearly five years ago (here).  The National Cancer Institute (NCI) maintains a website dedicated to data on the U.S. cost of cancer care and projections, see here.  (See also the 2013 Lancet article, "Economic Burden of Cancer Care in Europe," here.)

In response, many U.S. payers are seeking new models for payment for cancer care (for example, Wall Street Journal, 5/27/2014, Insurers Push to Rein In Spending on Cancer Care; subscription; here.)  ASCO is part of the discussion: for ASCO's website on patient-centered oncology payment, here.   ASCO has also published articles on the "financial toxicity" of cancer care costs, here; see also here.   Finally, academic medical centers are responding; for trade press about MD Anderson's December, 2014, oncology agreement with UnitedHealthcare, here.

Background: Medicare's Drive to Leave Fee For Service Healthcare Behind

Nearly ten years ago, former CMS administrator Tom Scully said he wished he could blow up Medicare's bizarrely complicated policy and fee for service system and just leave Medicare Advantage behind.

While the trail of documents could be much longer, from just the past year, we can highlight a May 2014 article by senior administrators Conway and Tavenner about joint "CMS and commercial payer" payment reform (JAMA, 8/21/2014, here) and a January 2015 article in the New England Journal by HHS Secretary Burwell about moving CMS to value-based (non fee for service) systems, NEJM article here, HHS press release here.

The January press release rolls out plans for a "Health Care Payment Learning and Action Network" which will begin meeting in March 2015.  The "HCPLAN" workgroup was endorsed by AHIP, the American Academy of Family Physicians, the CEO Council on Health and Innovation, and other groups.

Medicare Prepares to Launch New Oncology Models

Most cancer care at Medicare is paid in a fee for service model, but the Medicare agency is actively seeking new models that would change that paradigm.

In 2013, Brookings and MITRE released a white paper on new CMS oncology payment models (homepage here, 19 page white paper here).  Also in 2013, see an interesting deck and data for potential savings from oncology patient medical homes (here).  In 2014 RAND and MITRE released an analysis of a more detailed CMS oncology payment model (43 pages, here).   CMS issued a "preliminary design model" in mid-2014 (CMS 8 page white paper, online here). As a result, articles on the rapidly evolving CMS Oncology Care Model (OCM) have been appearing over the past six months (e.g. "The New CMMI OCM Model, Key Takeaways," 8/29/2014, here; "Key Features of the OCM," 1/5/2015, here.)  The innovation center (CMMI) at CMS has a website devoted to new oncology care models (here).

February 2015: Media Event, and Request for Oncology Managed Care Applications

On February 12, 2015, at 11 am, CMS released a request for applications for providers who can actually deliver under a new, packaged or bundled oncology care bundle.  The 33-page request for applications is here.   For the CMS press release, see here.  A concurrent Federal Register announcement is here.  A CMS webinar on the project is here. (The webinar site has a 26 slide deck, and CMS promises to post a transcript by early March.)

CMS estimates that at least 100 physician practices providing 175,000 episodes of care over 5 years will participate.   Episode of care has been "defined around:"
  • An episode will begin with use of a Part B or Part D chemotherapy drug, including hormonal antagonists (as used in breast or prostate cancer).  
  • An episode of care will be defined as 6 months from that date.  
    • If a patient only gets chemotherapy for 1 month, the episode of care is 6 months.  
    • If they get chemotherapy for 7 months, the 7th month triggers a new 6-month period.
    • Simple enough?
Practices will get an extra $960 per six months, and will be expected to provide 24 hour access to a clinical staff person, follow practice guidelines, and report some additional quality outcomes (similar to PQRS reporting today).   There appears to be a 4% payment withhold that accumulates in a pool that provides a performance bonus for practices meeting cost criteria each year.  Like ACO's, payments during the year accumulate on a traditional fee for service basis.  The overall program seems to be very close to last summer's 8-page white paper, and is described in most detail in the 33-page document "Request for Applications."

Early Responses in the Oncology Trade Press

HealthLeaders, March 3, 2015, has a provocative online article with the title, "Ten Reasons Why the CMS Oncology Care Model May Fail," here.

Patrick Conway and five CMS colleagues wrote a rapid-publication article about the OCM in Journal of Oncology Practice (no subscription required; here.)  A rebuttal article from Polite & Miller discusses potential flaws in the CMS proposal in the same journal, here.  The paired J Oncol Practice articles have epublication dates of February 17, 2015.

In the April 16 issue of Inside CMS (subscription), an article discusses a speech to the American Cancer Society by Rahul Rajkumar, acting deputy director of CMMI, that "an oncology multi payer demonstration is on track to begin in 2016."


Here are several links from the new Innovation Center oncology website:

CMS Introductory Webinar

A webinar introducing the core concepts of OCM, including application instructions, will be available to the public from 12:00 – 1:00 pm EST on February 19, 2015. Advance registration is not required. For additional information, please visit the Oncology Model webinar page.

CMS Additional Information


Full text clipped from the online Federal Register PDF is shown below (unformatted).

Interestingly, this document is "signed" by the administrator on December 22, 2014, so it took over six weeks to post in the Federal Register.  Likely the release was timed to follow (with at least a week or two of delay) the Burwell NEJM article on innovative payment models and the announcement of the "HCPLAN" initiative noted above.


Centers for Medicare & Medicaid Services

Medicare Program; Oncology Care Model: Request for Applications



AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:  Notice.

SUMMARY: This notice announces a request for applications (RFA) for organizations to
participate in the Oncology Care Model (OCM) beginning in 2016.

DATES: Letter of Intent Submission Deadline:  As described on the CMS Innovation Center
Web site at, interested payers must submit
a nonbinding letter of intent by 5:00 pm Eastern Daylight Time (EDT) on March 19, 2015.
Interested practices must submit a nonbinding letter of intent by 5:00 pm EDT on April 23, 2015.
Application Submission Deadline:  Applications for payers and practices must be received by
5:00 pm EDT on June 18, 2015.  Application materials and instructions are available at

ADDRESSES:  Letter of Intent forms must be submitted electronically in the PDF fillable
format to Letters of Intent will only be accepted via e-mail.
Applicants that submit a timely, complete Letter of Intent will be sent an authenticated web link
and password with which to access the electronic, web-based application.

FOR FURTHER INFORMATION CONTACT: for questions regarding the application process of OCM.

I. Background

The Center for Medicare and Medicaid Innovation (Innovation Center), within the
Centers for Medicare & Medicaid Services (CMS), was created to test innovative payment and
service delivery models to reduce program expenditures while preserving or enhancing the
quality of care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP)
We are committed to continuous improvement for Medicare, Medicaid and CHIP
beneficiaries.  The goal of the Oncology Care Model (OCM) is to improve the health outcomes
for people with cancer, improve the quality of cancer care, and reduce spending for cancer
treatment.  We expect that physician practices selected for participation in the model will be able
to transform care delivery for their patients undergoing chemotherapy, leading to improved
quality of care for beneficiaries at a decreased cost to payers.  Through this care transformation,
practices participating in OCM can reduce Medicare expenditures while improving cancer care
for Medicare Fee-for-Service (FFS) beneficiaries.
Beneficiaries can experience improved health outcomes when health care providers work
in a coordinated and person-centered manner.  We are interested in partnering with payers and
practitioners who are working to redesign care to deliver these aims.  Episode-based payment
approaches that reward practitioners who improve the quality of care they deliver, lower costs,
and engage with quality and cost data that will inform their provision of care are potential
mechanisms for CMS to further emphasize care coordination and enhanced care through practice
OCM will test episode-based payment for oncology care, using a retrospective
performance-based payment for an episode of chemotherapy.  The request for applications
(RFA) requests applications to test a model centered around a chemotherapy episode of care.

For more details, see the RFA available on the Innovation Center Web site at
II. Provisions of the Notice
The Innovation Center is operating this model under the authority of section 1115A of the
Social Security Act (the Act).  This RFA is directed to physician practices that provide oncology
care as well as public and other health care payers.  The Innovation Center hopes to engage at
least 100 physician practices that, in aggregate, will furnish care for approximately 175,000
cancer care episodes for Medicare beneficiaries over the course of this 5-year model.
  The Innovation Center sees the following as key opportunities within OCM:
•  Promote shared decision-making, person-centered communication, evidence-
based care, beneficiary access to care, and coordination across providers and settings.  
•  Reduce complications of cancer and cancer treatments, as well as associated
costs, through advanced care planning, increased use of high-value treatments, and reduction of
inappropriate payment incentives.
•  Collect structured clinical data and integrate clinical trial enrollment into
processes of care to facilitate quality improvement and accelerate clinical research.
•  Support the development and reporting of meaningful outcome measures.
•  Develop and monitor refined approaches to care delivery, which may improve the
research infrastructure (for example, by facilitating improvement in the quality of evidence for
existing therapies).
•  Encourage delivery of care in the lowest-cost medically-appropriate setting.
•  Refine a value-based payment system that encourages team-based care and
workforce innovation.

Participating practices must be able to meet the following practice requirements during
the performance period:
1.  Treat patients with therapies consistent with nationally recognized clinical
2.  Provide and attest to 24 hours a day, 7 days a week patient access to an
appropriate clinician who has real-time access to practice’s medical records.
3.  Use of ONC-certified electronic health record (EHR) technology as described in
the RFA.
4.  Utilize data for continuous quality improvement.
5.  Provide core functions of patient navigation.
6.  Document a care plan that contains the 13 components in the Institute of
Medicine Care Management Plan.
Participating practices in OCM will continue to receive standard Medicare FFS payments
during OCM episodes.  OCM will also provide an opportunity for participating practices to
receive retrospective episode-based performance payments.  After calculating the benchmark for
each OCM participant, CMS will set a target price for chemotherapy episodes, which includes a
discount.  Participants whose Medicare expenditures are below the target price may receive
semi-annual lump-sum performance-based payments, subject to the achievement of quality
measures.  In addition to the performance-based payments, participants will receive a Per-
Beneficiary-Per-Month payment (PBPM) for Medicare beneficiaries with nearly all cancer types
for each of the 6 months of the episode.  The monthly PBPM payment is intended to pay for the
enhanced services driven by the practice requirements, aimed at transforming practices towards
comprehensive, person-centered, and coordinated care.  The OCM PBPM is $160 per OCM

beneficiary per month for the duration of each 6-month episode, and will remain constant for the
5-year model.
OCM also aims to incorporate other payers in addition to Medicare, such as commercial
insurers and state Medicaid agencies.  Payers must also be able to meet the following
requirements for participation in the model:
1.  Commit to participation in OCM for its 5-year duration, and start performance
period no later than 90 days after OCM-FFS’ performance period.
2.  Sign a Memorandum of Understanding with the Innovation Center.
3.  Enter into agreements with physician practices participating in OCM that include
requirements to provide high quality care.
4.  Share model methodologies with the Innovation Center.
5.  Provide payments to practices for enhanced services and performance as required
in the RFA.
6.   Align practice quality and performance measures with OCM, when possible.
7.   Provide participating practices with aggregate and patient-level data about
payment and utilization for their patients receiving care in OCM, at regular intervals
The OCM start date is expected to be in spring 2016.
For more specific details regarding OCM (including the RFA), we refer applicants to the
informational materials on the Innovation Center website at:  Applicants are responsible for monitoring
the website to obtain the most current information available.
III. Collection of Information Requirements

Section 1115A(d)(3) of the Act, as added by section 3021 of the Affordable Care Act
(Pub. L 111-148), states that chapter 35 of title 44, United States Code (the Paperwork Reduction
Act of 1995), shall not apply to the testing and evaluation of models or expansion of such models
under this section.  Consequently, this document need not be reviewed by the Office of
Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C.

Dated:  December 22, 2014

            Marilyn Tavenner,
            Centers for Medicare & Medicaid Services.

[FR Doc. 2015-03060 Filed 02/12/2015 at 11:15 am; Publication Date: 02/17/2015]


Press release: 
New Affordable Care Act initiative to encourage better oncology care

New Affordable Care Act initiative to encourage better oncology care
For Immediate Release
Thursday, February 12, 2015

New Affordable Care Act initiative to encourage better oncology care

The U.S. Department of Health and Human Services (HHS) today announced a new multi-payer payment and care delivery model to support better care coordination for cancer care as part of the Department’s ongoing efforts to improve the quality of care patients receive and spend health care dollars more wisely, contributing to healthier communities. The initiative will include 24-hour access to practitioners for beneficiaries undergoing treatment and an emphasis on coordinated, person-centered care, aimed at rewarding value of care, rather than volume.
Cancer is one of the most common and devastating diseases in the United States: more than 1.6 million people are diagnosed with cancer each year in this country. According to the National Institutes of Health, cancer cost the United States an estimated $263.8 billion in medical costs and lost productivity in 2010. A majority of those diagnosed are over 65 years old and Medicare beneficiaries.
“Based on feedback from the medical, consumer and business communities, we are launching this new model of care to support clinicians’ work with their patients,” said Patrick Conway, M.D., CMS chief medical officer and deputy administrator for innovation and quality. “We aim to provide Medicare beneficiaries struggling with cancer with high-quality care around the clock and to reward doctors for the value, not volume, of care they provide. Improving the way we pay providers and deliver care to patients will result in healthier people.”
As part of the Department’s “better care, smarter spending, healthier people” approach to improving health delivery, the Oncology Care Model is one of many innovative payment and care delivery models developed by the Centers for Medicare & Medicaid Services (CMS) Innovation Center and advanced by the Affordable Care Act. The model was created in response to feedback from the oncology community, patient advocates, and the private sector that a new way of paying for and delivering oncology care is needed. This model will invest in physician-led practices, allowing the practices to innovate and deliver higher-quality care to their patients. CMS is seeking the participation of other payers in the model to leverage the opportunity to transform care for oncology patients across a broader population.

The Oncology Care Model encourages participating practices to improve care and lower costs through episode-based, performance-based payments that financially incentivize high-quality, coordinated care. Participating practices will also receive monthly care management payments for each Medicare fee-for-service beneficiary during an episode to support oncology practice transformation, including the provision of comprehensive, coordinated patient care.
To achieve better care, smarter spending and healthier people, HHS is focused on three key areas: (1) linking payment to quality of care, (2) improving and innovating in care delivery, and (3) sharing information more broadly to providers, consumers, and others to support better decisions while maintaining privacy. Today’s news comes on the heels of Secretary Burwell’s recent announcement that HHS is setting measurable goals and a timeline to move Medicare toward paying providers based on the quality, rather than the quantity of care they give patients.
“With the Oncology Care Model, CMS has the opportunity to achieve three goals in the care of this medically complex population who are facing a cancer diagnosis: better care, smarter spending, and healthier people,” added Dr. Conway. “As a practicing physician and son of a Medicare beneficiary who died from cancer, I know the importance of well-coordinated care focused on the patient’s needs.”  
The Oncology Care Model will provide support for participating physician practices to address the complex care needs of the beneficiary population receiving chemotherapy treatment and will reward practices that focus on furnishing services that specifically improve the patient experience and health outcomes.
Physician group practices and solo practitioners that provide chemotherapy for cancer and are currently enrolled in Medicare may apply to participate. Other payers, including commercial insurers, Medicare Advantage plans, state programs, and Medicaid managed care plans, are also encouraged to apply. To be considered, interested payers must submit a letter of intent through the Oncology Care Model inbox at by 5:00 p.m., EDT on March 19, 2015. Interested practices must submit letters of intent by 5:00 p.m., EDT on April 23, 2015. Payers and practices that submit a timely letter of intent will be sent an authenticated web link and password with which to submit an electronic application. Applications must be submitted by 5:00 p.m., EDT on June 18, 2015. 
For more information on the Oncology Care Model, please visit:
The Innovation Center was created by the Affordable Care Act to test innovative payment and service delivery models to reduce CMS program expenditures while preserving or enhancing the quality of care for CMS beneficiaries. The Innovation Center is committed to transforming the Medicare, Medicaid and Children’s Health Insurance Program (CHIP) programs and is expected to help deliver better care for individuals, better health for populations, and lower growth in expenditures for Medicare, Medicaid and CHIP beneficiaries.

Easter Egg for those who read to the bottom:
The same month, the British newspaper GUARDIAN publishes an article about abortive or rushed-past policy demo projects at the U.K. National Health Service (NHS) - Guardian article here.   Public policy academic article on which the journalism is based, here.  [Ettelt et al, 2015, The Multiple Purposes of Policy Piloting and Their Consequences: Three Examples from National Health and Social Care Policy in England.]