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The Move to Capitation in Oncology: What Practices Need to Know About the OCF

The capitated payment for Evaluation and Management (E&M) and drug administration services in Medicare’s proposed Oncology Care First (OCF) value-based payment methodology would represent a true “sea change” in how oncology care is paid for, leaders from OneOncology editorialized in the American Society of Clinical Oncology’s Journal of Oncology Practice.

The OCF is scheduled to replace the Center for Medicare and Medicaid Innovation’s (CMMI) Oncology Care Model (OCM), the agency’s first generation value-based payment model, with what OneOncology authors call an “intermediate step to a true bundled payment in medical oncology.”

While the OCM incorporated a “monthly enhanced oncology services” payment (MEOS) to cover “practice transformation” services, the OCF would fold additional traditional FFS items into the monthly per-patient fee: E&M and drug administration.

Combining these services into one prospective payment for an episode of care signals Medicare’s strong interest in testing the feasibility of capitation in medical oncology. 

It also highlights another challenge that OneOncology experts have examined: the unintended consequences of holding oncologists accountable for the total cost of drugs used during an episode, guideline-concordant use of novel therapies could pose significant challenges to success of value-based models.

In a JAMA Oncology article, the OneOncology value-based payments team found that at Tennessee Oncology in over half of the 118 lung cancer episodes with expenditures above the OCM target there were no emergency department visits, hospitalizations, and post-acute care stays. Importantly, in over two-thirds of these cases, expenditures were above target costs solely because of the use of new National Comprehensive Cancer Network (NCCN) recommended immunotherapies, which became the standard of care treatment based on overall survival improvementsafter the OCM baseline period. The time frame of the OneOncology study occurred after the OCM baseline period determining episode of care costs, which began in 2012 and ended in 2015.

Based on these observations, OneOncology proposes in a comment letter to Medicare that measuring clinical pathway adherence is a better mechanism for measuring high-value care, since adherence to clinical pathways implicitly minimizes inappropriate drug utilization and is largely within a medical oncologist’s control. 

OneOncology bolsters our partner practices’ capacity for value-base care delivery through alternative payment model design and implementation, public policy advocacy and thought leadership, commercial health plan contract negotiation, and physician engagement and education initiatives.

Given the magnitude of the impact that the global pandemic has had on every facet of our society, especially our healthcare system, OneOncology has supported the positions of the Community Oncology Alliance in calling for CMS to delay the commencement of OCF and extend the duration of OCM with the option for all OCM participants to continue in an upside-only risk arrangement.

For many oncology practices, the backdrop of the global pandemic has underscored the importance of several key tenets value-based care, such as orienting a cancer care delivery system toward care delivery innovation, team-based care, and technology-enable patient engagement.

As leaders in practice transformation, OneOncology partner practices collectively manage 4,500 episodes in each performance period of the CMMI’s OCM and participate in several commercial health plan value-based payment arrangements. Thus, OneOncology provides a scalable platform for generating insights, sharing best practices, and benchmarking key performance metrics among several of the most progressive practices in value-based care.