A change to the government’s voluntary bundled payment model for oncology is going to be bad news for many participants.
A new analysis from Avalere Health predicts that more than half of all oncology practices participating in the Centers for Medicare & Medicaid Services’ (CMS) Oncology Care Model could end up owing the government money if they are required to join in a two-sided risk payment model.
Beginning in July, CMS plans to require practices that have not yet achieved a performance-based payment in any of the first four performance periods of the program to switch to a two-sided risk arrangement or exit the program, Avalere said.
Estimates from Avalere project that around 70% of the oncology practices participating in the Oncology Care Model would owe CMS payments to recoup costs if they are pushed from their current one-sided, upside risk arrangement to a two-sided risk arrangement. Under a two-sided risk arrangement, many practices will be made to pay penalties for delivering care at a cost that does not meet, or comes in below, the cost threshold set by CMS.
“Similar to the challenges that have faced the Medicare Shared Savings Program, CMS may need to further evaluate how quickly organizations can transition to taking on downside risk in the OCM,” said Richard Kane, associate principal at Avalere.
CMS started the model in 2016 as a voluntary, five-year bundled-payment program. Currently, all participants are enrolled in a one-sided risk arrangement where they can generate revenue by providing care below the target price set by CMS and do not incur penalties when they exceed those targets.
Starting in July, participants can choose from two risk-bearing arrangements where they will face penalties for not meeting cost targets. One is the original track created at the start of the program and the other is a recently announced alternative track that offers less downside risk by creating a neutral performance zone in which providers neither get paid or owe money based on a cost threshold.
Based on Avalere’s evaluation, nearly all practices would fare better in the new alternative arrangement, but roughly half would still owe payments even under the less risky model.
Practices will have to weigh the pros and cons of the program, Avalere experts said. They will need to evaluate not only their ability to earn performance-based payments in the program but also improvement costs, the value of the program’s monthly enhanced services payments and the potential to receive 5% bonus payments for qualifying as an alternative payment model participant under CMS’ Quality Payment Program, established under MACRA.
“Many practices that could be required to switch to two-sided risk will likely face recoupment payments to CMS in future performance periods,” said Biruk Bekele, a consultant at Avalere. “The decision to drop out of the OCM or switch to the new track will be decided on a practice-by-practice basis and will depend on many factors.”
“Many practices that could be required to switch to 2-sided risk will likely face recoupment payments to CMS in future performance periods,” said Biruk Bekele, consultant at Avalere.— Avalere Health (@avalerehealth) May 22, 2019
A previous analysis by Avalere found providers participating in the bundled payment model for cancer care may perform better depending on the type of cancer they’re treating.
The government has looked at bundled-payment models such as the oncology model as a way to improve patient care and lower costs. A Government Accountability Office report released in January found providers enter the models because of the potential for financial gain, but results can change massively depending on whether the models were voluntary.