Participating Practices Commend CMS for OCM Changes

Targeted Therapies in OncologyFebruary 2019
Volume 8
Issue 2

As the oncology care model, a 5-year pilot payment project from the Centers for Medicare & Medicaid Services involving oncology practices, reaches its halfway mark, a fresh round of performance feedback intended to guide and evaluate its progress has been issued. Although many participants are critical of the structure of the OCM, they also acknowledge that important modifications have been made.

Tracey F. Weisberg, MD

As the oncology care model (OCM), a 5-year pilot payment project from the Centers for Medicare & Medicaid Services (CMS) involving oncology practices, reaches its halfway mark, a fresh round of performance feedback intended to guide and evaluate its progress has been issued. Although many participants are critical of the structure of the OCM, they also acknowledge that important modifications have been made.

“The OCM has gotten us talking across the country—exchanging ideas and best practices—with the clear intent that we want to do better,” said Tracey F. Weisberg, MD, a medical oncologist affiliated with OCM participant Maine Medical Center of Scarborough, Maine, and chair of the American Society of Clinical Oncology State Affiliates Council.

The bundled payment program began in July 2016 to give participating practices inventive ways to reduce costs and improve the quality of their cancer care, specifically for patients receiving chemotherapy and related treatment under Medicare.

Practices are paid according to episodes of treatment, with each episode initiated at the start of the patient’s chemotherapy treatment and lasting for 6 months. At the end of an episode, practices may qualify for 2 forms of payment: either a monthly enhanced oncology services payment of $160 per patient and, if practice billing is below the episode-specific target price set by CMS, a performance-based payment (PBP).

The 177 OCM-participating practices are currently enrolling patients for performance period 6 of 9; however, results have only been released up to performance period 2.1

As of January 2, 2019, all practices were required by CMS to take on the 1-sided risk or upside-only arrangement until the start of performance period 6, said Alyssa Dahl, PhD, MPH, CPH, manager of healthcare data analytics at DataGen. This means a practice can be financially rewarded for achieving efficiencies but is not responsible for any costs of care that exceed target prices established by CMS.

According to Weisberg, however, most practices hope that CMS will make it easier for them to achieve the pilot program’s long-term goal, which is for them to not only strive to achieve PBPs but also share the financial risk with CMS if they fail to meet savings targets.

“The hope is that [further] modifications to the model will make practices more conducive to electing the 2-sided risk option,” Weisberg said.

According to Robert “Bo” Gamble, director of strategic practice initiatives for the Community Oncology Alliance, CMS’ methodological chang- es may entice more OCM practices to opt into the alternative 2-sided risk arrangement. The most likely participants to make this switch will be practices that have already received a PBP in performance period 1 or 2.

“These changes are making the 2-sided risk more attractive,” said Gamble. “No one can tell for sure until practices start getting reports from performance period 3 and performance period 4. However, we have the feeling that those who have already seen a PBP are very likely to do the 2-sided risk arrangement.”

The target price is generated from a benchmark episode expenditure, which is adjusted for variables including historical data, geographic location, and patient population. It is also trended to the applicable performance period.

A discount is then applied to arrive at the target price. For participants who have opted into the upside-only arrangement, the discount is 4%. Although OCM practices can stay on the upside-risk-only track for the full 5 years, they must at least qualify for a PBP by the end of performance period 3.

Under this arrangement, OCM practices have the option to take on downside risk in their third year. Under the original plan, they would be responsible for any expenses over the target price with a lower discount of 2.75%. This would enable them to earn a higher payment from CMS in return for accepting the downside risk.

Although practices are now eligible for the 2-sided arrangement, most are not yet confident to move forward with the pilot program’s long-term goal. “CMS has not revealed how many practices have transitioned into 2-sided risk,” said Dahl. “However, I would imagine that it is still quite low, if at all.”

Based on the original structure of the model, adopting a downside arrangement is viewed by most as unsafe, Weisberg said. “Right now, with the old calculation and the old model, I do not think that anyone would feel comfortable electing the 2-sided risk.”

According to Weisberg, this sentiment is particularly strong among practices that work with low volumes of patients for certain tumor types. Smaller practices have higher levels of uncertainty about whether they can stay below their target prices because they often work with small populations of patients for certain disease types, and some of those patients may have high costs of care, which would make it impossible for them to achieve targets in a model that is based on average care costs.

“As a private practice affiliated with a hospital, we take referrals from all over the state. Practices that have this mix of patients have a higher probability of having outlier patients in terms of cost,” Weisberg said. “A lot of it depends on the size of the practice—if you have a practice that has 15 offices and 100 physicians, you have so many patients that anoutlier or 2 in your OCM does not make much of a difference. If you are a smaller practice, it is impossible to control costs.”

To some extent, CMS has addressed this issue with the development of a new “safe zone” to make 2-sided risk more palatable. Moving forward with performance period 3 reconciliation reports, if a practice has actual costs that fall between the target (discount- ed) and benchmark (episodic) costs, it will not earn a PBP; however, it will not be responsible for costs exceeding the target price.

“The implication is that if a participant’s actual cost falls within the safe zone, they will not see a PBP, but they will also not owe [a repayment] to CMS,” Weisberg explained. “This lowers the downside risk for participants because they now have a buffer between the target amount and the benchmark amount.”

Additional modifications have been made to the 2-sided risk arrangement under the OCM in the hopes that it will become a more feasible option for practices regardless of their size. For example, CMS has adjusted the discount rate from 2.75% to 2.5% beginning in performance period 3, which will lead to a higher target amount—or potentially a higher payment for oncology services.2

Gamble is confident that the more successful OCM participants will eventually take on this arrangement, it is still not entirely clear why some practices have received a PBP and others have not.

“The OCM is incredibly complex, and [practices] have made some changes, but they are not able to pinpoint [whether] those changes specifically are what caused them to do better,” said Gamble. “They are trying to concentrate on identifying the reason for their savings.” Weisberg suggested that under the CMS formula for payment, PBPs could result from the use of supportive care drugs, extended physician hours, reduced emergency department visits, practice awareness of drug cost spending, or other factors.

However, some OCM practices did not qualify for PBPs because they made some of these changes through past CMS shared sav- ings initiatives—before the OCM got started. “In my practice, a practice that is high performing and was in the COME HOME project, we are having a difficult time gaining a PBP,” Weisberg said. “That is because the initial money-saving maneuvers were done prior to the OCM. Practices like mine do not have the opportunity to show big differences against their baseline.”

Practices say that what is needed is an OCM that rewards them for improving their care relative to other practices rather than forc- ing them to compete against one another, no matter how efficiently they are already performing. According to Gamble, CMS is working toward a more competitive practice model, although it is still unclear exactly what that will look like and when it will be enacted.

“With the current OCM model, there is an argument that you are competing against yourself because of the way CMS is comparing practices to their prior benchmarks,” he said. “They have [changes in the works] to make it so that practices are competing against each other, but we have not seen them yet, and we will not until future reports.”

With changes made and more to come, 1 thing is certain: CMS is listening. “If you looked at what CMS did—they changed the [basis for] 2-sided alternative risk—we think this is because of the pressure to make this program attractive,” said Gamble. “They are approachable when we give them feedback and suggestions, and when we ask for clarity, they give it.”


  1. Oncology care model. Centers for Medicare & Medicaid Services website. initiatives/oncology-care/. Accessed January 2, 2019.
  2. Physicians Advocacy Institute. The Physicians Advocacy Institute’s Medicare quality payment pro- gram (QPP) physicians education initiative: oncology care model (OCM) overview. physiciansadvoca- (OCM)%20Overview.pdf. Published 2018. Accessed January 2, 2019.
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