As Cancer Care Delivery Models Shift, Practices Must Decide Whether to Take on Extra Risk

Targeted Therapies in OncologyJune 1 2020
Volume 9
Issue 8
Pages: 13

Oncology practices like Northwest Medical Specialties are looking for ways to improve their patient care and are willing to transform their practice to do so.

Oncology practices are witnessing a sea change in the way care is delivered in the US health system. The shift is from a fee-forservice payment model, in which each test and exam and other services are paid for individually, to a value-based payment model, in which the cost of care is determined by measures and other benchmarks. This reform is intended to quantify better care while moving away from a utilization-only system.1

Practices have tested different value-based models over the years, but the need for consistency in how the oncology community defines quality and value is now apparent, as is the need for an agreement on the methodology for comparing oncology practices. Once these are fulfilled, the community will likely see a decrease in the cost of cancer care and an increase in quality, according to Bo Gamble, director of strategic practice initiatives for the Community Oncology Alliance (COA).

To become part of this value-based care model, some oncology practices participated in the Center for Medicare & Medicaid Innovation’s (CMMI) Oncology Care Model (OCM), in which they started with 1-sided risk and could move to original or alternative 2-sided risk or opt out of the program at any point over a 2-year period.2

For 1-sided risk, if practices did well and performed beyond their goals, they could receive a monetary bonus, which the OCM called a performance-based payment. However, if those practices did not do well, they were not penalized for it. For the 2-sided risk options, if a practice did well, they received the same performance-based payment; if they did not do well, they owed money.

With original 2-sided risk, practices could receive a 2.75% discount off the benchmark price versus 2.5% with alternative 2-sided risk. With a 1-sided risk arrangement, the discount is 4.0% of the benchmark price. Other differences included the amount of stoploss, which limits repayment, at a 20% increase in the benchmark amount for original 2-sided risk. For alternative 2-sided risk, there is an 8% increase in Part B—outpatient medical care—revenue billed under the practice’s taxpayer identification number during the 12 months covered by the performance period, plus any additional Part B chemotherapy drug and administration received by OCM beneficiaries during the practice’s attributed episodes of care and billed outside the taxpayer identification number of the practice.3

“It’s essential for community oncology practices to provide the highest-quality care in the most cost-efficient way to remain independent,” Sibel Blau, MD, president and CEO of the Quality Cancer Care Alliance Network and medical director of the Division of Hematology/Oncology at Northwest Medical Specialties, said in an email interview with Targeted Therapies in Oncology (TTO). The concern is that an inefficient practice could f lounder or become a target for a merger. “We know that value-based care is the future of payment reform, and we want to always stay ahead of that curve,” she said.

Oncology practices like Northwest Medical Specialties are looking for ways to improve their patient care and are willing to transform their practice to do so. Blau’s institution participated in the OCM and took on alternative 2-sided risk by the end of the 2 years.

December Deadline

Practices had 4 performance periods that were each 6 months long. If they did not improve, they did not receive performance-based payments and had to either take on 2-sided risk or drop out of the program entirely by the December 2019 deadline. Practices that did receive payments did not have to take on 2-sided risk and could instead choose 1-sided risk. The OCM developed a system to decide how much each practice should spend on patient care: If a practice spent less than that amount, it could receive a performance-based payment; if it spent more as a 2-sided–risk practice while hitting the penalty mark, it would be required to refund some of its payment.

Northwest Medical Specialties received payments in all 4 performance periods by continuing to show progressive improvement. “We decided to take on 2-sided risk electively because we always want to push ourselves to the next level of care and quality,” Blau said. “We were not required to go at risk. However, we know that risk-based models are here to stay, and we want to challenge ourselves to continue to improve.”

COA Survey

A 15-question COA survey showed the decisions of 68 of 170 participating oncology practices based on their experience with the OCM. The most common decision (among 32 practices; 47.1%) was to remain in the OCM with 1-sided risk. Twenty-five practices (36.8%) chose to enter the 2-sided risk category; of those, 22 (32.0%) did not receive any performance-based payments. Sixteen percent of practices dropped out of the OCM. Gamble said about 88% of the respondents that took on 2-sided risk were forced to, in a move to avoid withdrawing from the model. Seven practices that took 2-sided risk had been in the “safe zone” for all 4 performance periods, as they had not improved enough to receive a performance-based payment but were not required to return any payment. Reasons for assuming 2-sided risk despite not having received any performance-based payment included preparation for the future, an expectation to do well, a commitment to reform, and the attraction of the safe zone.

“You didn’t get anything, but also you didn’t owe anything either,” Gamble said about the safe zone in an interview with TTO. “This notion of paying back for services is foreign to health care, particularly when the whole methodology is so complex that you can’t determine what you were doing to cause it to work well or not to work well. And that’s been one of the issues, or struggles, in all aspects of health care reform.”

Gamble indicated the methodology that the OCM used is more complex than what most cancer care administrators are used to. “In the past, you could predict, based on the volume of service or what their services were, what their income string would look like—where they were doing well, where they weren’t doing well,” he said.

“This model has a lot of different levers, adjustments, filters, and criteria that are changing the game,” Gamble continued. “On the one hand, it [has] improved cancer care and…defined the opportunities where people could do well from a quality standpoint as well as a cost or value standpoint. What’s been challenging, though, is the methodology [used. We want it] so it’s fair and equitable for everybody involved.”

Consistency With Better Care Up Front “Number 1 on our list of things to do [is to create] greater transparency so that where there are inefficiencies or obstacles or unnecessary components to the delivery system, [we] make them go away so the patient and the stakeholders are all involved in [better navigating] that process,” Gamble said.

An incentive for practices to adopt these changes is to lower the total cost of care by managing care differently when the patient first comes into the office. For instance, although novel drugs for cancer treatment are now available, they often come with a hefty price tag. Yet providing these treatments to patients may lower other costs, through fewer adverse events or supportive treatments, lower chances that patients will fall ill, and fewer trips to the emergency department or hospital.

“We’re having to change the perspective,” Gamble said. “Even though an item may cost a lot on the front end, what is the value of that item with respect to the overall treatment journey? Instead of looking at a treatment for a day, teams are saying, ‘I want to look at it for a 6-month span for every cost they encounter, not just the treatment.’ Now we have to change the way we look at that along the way, meaning talking to patients early on and saying, ‘If you feel sick, call us. Don’t go to the emergency [department].”

Likewise, Texas Oncology, which also took part in the OCM and took 2-sided risk in 2019, improved patient care and quality performance in multiple ways, including shared decision-making, changing practice dynamics to reduce hospitalizations and emergency department visits, and improving end-of-life care, according to Lalan S. Wilfong, MD, vice president of quality programs and value-based care at Texas Oncology in Dallas and cochair of the payment reform team at COA.

“The more we can do to help keep people out of the emergency [department] and out of the hospital, the less money we’ll spend and the better-quality care the patients will have,” Wilfong said in an interview with TTO.

Texas Oncology is part of the OCM as well as other care models. Practices can have different payment models at one time, so Texas Oncology has worked to ensure consistent guidance for patients.

“It’s challenging to have different models because the last thing from a practice you would want is to have to do different things for different patients,” Wilfong said. “One thing we have been insistent on and worked with our payers on is making sure all these models align so that [when] taking care of patients, the requirements and [care we provide] are similar across programs.”

Myriad Value-Based Models

Currently, about 20 value-based care models from commercial payers exist, and CMMI allows groups to create their own care reform ideas to implement while using their criteria. COA is creating their own payment model, called OCM 2.0, based on previous value-based care models, as well as their own mission and history. Gamble described it as having tiered components of a payment model and care delivery system but with some degree of negotiations and expansion. COA has developed options for entry, development, shared savings, performance bonuses, and ways in which practices will be compared with their peer group.

“This tiered model allows for easy adoption and then further development, all while promoting consistency,” Gamble explained.

CMMI will be putting out its own model in 2021 or 2022 called the Oncology Care First Model.4 Because CMMI will be working on its own program, COA is rolling out its own tiered model with different levels of participation by the stakeholders: oncology practices, payers, and even employers. The model will include base-level requirements plus other options based on the interest and capability of the participants.

Those new to the process could start with implementing evidence-based care. Practices that are more mature and aggressive in their changes may add more complex layers, such as 3-way shared savings.

“One of the issues that we’re seeing in all the models out there [is that] they all have their own definition or criteria for the clinical care delivery,” Gamble said. “Why do there need to be so many different versions? Part of this effort is: Can we all agree on what is outstanding cancer care? What does it look like? What are the components in it? If we can reach agreement, maybe we can let everybody work on that base, and then they could add their own payment methodology…and the glue becomes the measures that hold the clinical delivery and the payment methodology together.”

Blau said that adopting the OCM had its difficulties but also made a large impact on their care and patient experience in a positive way. “The OCM has challenged us but has also provided great resources and support to help us transform the way we provide care. It also opened new ways of thinking about cancer care delivery and moved us to think with more innovative approaches to our patient care,” she said.

On the other hand, with OCM 2-sided risk, Gamble worries that the complexity and issues with methodology are driving away some practices. The OCM started with 400 applications, dropping to 225 after paperwork and processing and 175 before practices had to make their final decision. Now that the deadline has passed, COA has been told that even more practices have opted out, although CMMI has yet to update its numbers.

“We have gone backward from what we need to do,” Gamble said. “If we’re doing it right, in our opinion, we may start out with 100 participants and grow to 200 and then 300 because it’s working. If it’s working, people will latch on to it and want to be a part of it.”

The main goal for COA moving forward in promoting cancer care reform is to create standards and consistency in the care models. Practices, physicians, payers, and employers involved in the health care system have to agree on what is considered quality cancer care and achieve consistency in defining the goals for value and cost savings to ultimately create a program that is easily understood, fair, consistent, and transparent.


1. What is value-based healthcare? New England Journal of Medicine Catalyst. Published January 1, 2017. Accessed May 13, 2020.

2. COA survey find OCM participants willing to take on two-sided risk. Community Oncology Alliance. Published January 30, 2020. Accessed May 13, 2020.

3. The COME HOME model. COME HOME program.

4. Oncology Care First Model: informal request for information. Centers for Medicare & Medicaid Services. Accessed May 14, 2020.

Related Videos
Related Content