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Alternative Payment Models and the Dangers of 2-Sided Risk

Web Exclusives - Alternative Payment Models
Chase Doyle

Chicago, IL—As the Centers for Medicare & Medicaid Services (CMS) promotes the transition of medical payments from volume to value, advanced Alternative Payment Models (APMs), which provide added incentives to clinicians to deliver high-quality and cost-efficient care, look to play an expanded role in the future.

At the 2017 ASCO annual meeting practice management track, Barbara­ L. McAneny, MD, FASCO, FACP, MACP, CEO, New Mexico Cancer Center, and President-Elect, American Medical Association, discussed the lessons from the Community Oncology Medical Home (COME HOME) 3-year project, cautioning providers about the dangers of adopting a 2-sided risk model of care.

“The number of people who go broke with cancer care is significant,” said Dr McAneny. “We want to make sure our patients are less likely to suffer severe financial toxicity.”

With this all-too-common crisis in mind, Dr McAneny and colleagues at Innovative Oncology Business Solutions developed an oncology care model through a 3-year grant from the Center for Medicare & Medicaid Innovation (CMMI).

Keeping Patients Out of the Hospital

The COME HOME project incorporated oncology medical home systems within 7 oncology practices and measured clinical outcomes to ensure high-­quality care and patient safety.

“We knew as a practice that we have very little ability to change how much is spent on drugs, so we decided to look at the things we could affect, namely, hospitalization and the management of toxicities of cancer and its treatment,” Dr McAneny explained. “This wasn’t about rationing care but keeping patients healthier and out of the hospital.”

The COME HOME project demonstrated a significant reduction in emergency department use (11.7%), hospital admissions (6.6%), and hospital readmissions (12.5) over the 3-year period. The project also achieved a high patient satisfaction rate (98.1%).

Too Small for Risk

Under the Medicare Access and CHIP Reauthorization Act of 2015, Medicare Part B payments are reimbursed through 1 of 2 methodologies—the Merit-Based Incentive Payment System (MIPS) and advanced APMs, according to Dr McAneny.

Advanced APMs are designated as such by CMS if they meet certain criteria, including certified electronic health record use, quality reporting, and financial standards that require 2-sided financial risk. Participation in an advanced APM exempts physicians and practices from the MIPS program and provides an annual 5% reimbursement bonus starting in 2019.

Although this option is currently limited to oncology practices that are participating in CMMI’s Oncology Care Model (OCM), many payment reform models are currently available, including ASCO’s Patient-Centered Oncology Payment (PCOP) model, that are seeking to qualify as advanced APMs.

The OCM and the PCOP model incorporated several of the COME HOME processes and tools after that program’s success. In addition, ASCO, along with Innovative Oncology Business Solutions, remains committed to helping oncology practices transition to PCOP. Nevertheless, Dr McAneny expressed serious concerns about the prospect of adopting 2-sided financial risk.

“I’m cautioning everybody I can, that taking 2-sided risk is not going to work—not because you’re an inefficient practice or doing the wrong things—but because we have too small a patient population to take actuarial risk,” she explained. “We can take transactional risk, in which we meet a target or exceed a goal for a patient, but if given a random set of patients, the odds of having too many very sick patients could lead to insolvency.”

It does not take much to have actuarial risk really adversely affect a practice, said Dr McAneny, and even companies such as the US Oncology Network are too small to assume this kind of risk.

“If you’re counting on the average of 4 inflammatory breast cancers this year, and you get 8 such cases, you lose,” she warned. “The average oncologist sees about 350 new patients per year, so we are way too small to take on this risk.”

ASCO and other groups need to work with CMS to devise targets that are “truly achievable” and based on the clinical criteria of the patient. “We need to come up with a realistic system that pays us for value, but also pays us within a game that we have a fair chance of winning. If we do that, we’ll be able to deliver better care,” she concluded.

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Last modified: June 11, 2020