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    Five rules for payer success in oncology

    After years focused on innovative payment models to improve PCP-led care coordination, attention is turning to how to engage specialists, who preside over the care of some of our nation’s sickest and most vulnerable patients. One especially critical frontier is oncology. The costs of battling cancer continue to rise unabated, with systemic spend forecast to grow up to 39% between 2010 and 2020, reaching $173 billion. Meanwhile, the average price of cancer drugs is also increasing, doubling over the past decade to more than $10,000 per month.

    Recognizing this trend as a threat to financial sustainability, commercial payers have deployed a variety of interventions in recent years in partnership with select provider groups. They have employed tactics from drug-focused pathways to utilization management programs and the removal of buy and bill. None has definitively moved the needle on cost of care and quality, with oncology expenses continuing to spiral up.

    Fortunately, the passage of MACRA in 2015 has dramatically changed the landscape and opened new opportunities. With CMS now taking the lead and rolling out value-based care programs such as MIPS and the Oncology Care Model (OCM), oncology practices are beginning to assume holistic accountability for the health and well-being of their patient populations, across all co-morbidities and care settings. Meanwhile, earlier initiatives such as the Community Oncology Medical Home (COME HOME) have validated this approach by documenting compelling reductions in cost of care, accompanied by improvements in patient experience.

    As value-based care accelerates, practices face the task of transforming their operations clinically, financially, and administratively. The result is a new reality for commercial payers looking to gain control over cancer cost in their populations. As oncology practices become more deeply ingrained in CMS’s efforts, it consumes their bandwidth and changes priorities, rendering prior payer approaches to engagement obsolete. 

    New rules for commercial payer success

    In short, commercial payers must reinvent their efforts to reduce cancer cost and increase quality for a value-based care world. Those that align with CMS’s comprehensive approach can gain significant upside opportunities in terms of cost efficiencies, product differentiation and the ability to capture performance improvement data.

    With this new playbook comes five new rules for success:

    1. Think collaboration instead of negotiation when partnering with provider organizations.

    First, payers must leave behind the days of zero-sum contracting and negotiations that were the norm in the days of fee-for-service healthcare. MIPS and alternative payment model programs like the OCM require a whole new level of collaboration, with every stakeholder playing a role in the holistic clinical and financial progress of patient populations. Value-based care initiatives will need to begin with iterative, cooperative program design with participating providers, then require intensive data sharing to jointly track and optimize results along the way.

    2. Focus on one market at a time.

    Payers serving multiple states, or states with multiple major cities, should expect to develop plans for launching value-based cancer programs specific to each key metro market. This approach acknowledges the fact that success factors will vary due to demographics, the availability of community-based care, and the need to align with different stakeholders in each area.

    3. Support practice transformation.

    Drug-focused cancer programs from the fee-for-service era will need to give way to those that support “whole patient” care and address cost drivers such as avoidable emergency room visits and in-patient admissions. Health plans will do well to create compelling financial incentives for practice transformation, as CMS has done for its Oncology Care Model program. Participating practices receive a $160 per member per month payment for qualifying episodes over six months—money intended to fund new activities such as care coordination and management. Those who meet cost targets are further rewarded with a share of savings.

    4. Develop two tiers of success metrics, supported by both clinical and financial data.

    Value-based care programs must define and track key metrics that apply to all participating practices, while also setting practice-specific goals that reflect the wide variations in everything from treatment costs by cancer type to emergency room admissions and adverse events. To properly report on those measures, payers will need better data sourcing and integration, as well as the ability to look beyond just claims data to a broader set of clinical and financial sources, such as EHR, prescription and practice management data.

    5. Help equip providers with the tools to perform.

    Commercial payers have deep expertise in the principles of population health that value-based care now compels provider organizations to adopt. Therefore, they are in an excellent position to help upskill practices in domains such as coordination of care, risk stratification, and cost/quality reporting. This also includes facilitating to a solid foundation of tools including: data exchange to enable creation of holistic patient profiles across all clinical and financial sources; application of logic to stratify those patients according to risk; care management and coordination workflows; treatment guidelines to minimize off-standard of care therapies and performance- and outcome-based analytics to enable ongoing optimization at patient, provider, site, and practice level.

    Looking Ahead

    Thanks to MIPS and the OCM, it’s a brave new world for oncology practices—a world that compels commercial payers to revisit previous approaches and embrace change. Success in the era of value-based care will be dependent on alternative payment model program design oriented around holistic care delivery in partnership with leading oncology practices. Commercial payers will then have to follow through with investments in new governance models as well as new technologies, tools and skill sets that enable practice transformation. By following these new rules, commercial payers will be well positioned to realize better cost and quality outcomes for practices, employers, and members alike.

     

    Charles Saunders, MD, is CEO at Integra Connect.

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