Value-based care (VBC), the idea that outcomes and value should be the primary driver behind reimbursement instead of the traditional, volume-based fee-for-service (FFS) model, has been around for decades. The shift has not been easy, and it has come across a decades-long backdrop as the Centers for Medicare and Medicaid Services (CMS) has launched hundreds of payment models in the search for the triple aim – improved outcomes, lower costs, and improved quality and experience delivered to patients.
Oncology faces a number of unique challenges compared to other specialties, which initially created headwinds in the adoption and success of oncology-focused VBC. The industry fragmentation, inefficiency of cancer care delivery, and medically complex and high-cost population set creates inherent challenges that other care types have not faced.
The Center for Medicare and Medicaid Innovation (CMMI) first established the Oncology Care Model (OCM) in 2016, in an effort to improve outcomes and drive savings in cancer care. The model emphasized the need for practice management to improve care coordination and patient outcomes. This was evidenced throughout the OCM framework, with a focus on improved care decision making, increased patient-centered communication, and additional documentation around care plan requirements.
The OCM aimed to provide practice support and improved financial incentives through two mechanics on a voluntary-enrollment basis:
- A $160 Monthly Enhanced Oncology Service (MEOS) payment paid on a per beneficiary per month (PBPM) basis. This payment was given to clinics throughout the duration of a chemotherapy episode regardless of clinical and savings outcome (partially to help compensate practices for the implementation and enhanced service requirements associated with the program)
- A performance-based payment (PBP) for associated episodes of cancer care (defined in 6-month increments). The performance-based payment unlocked upside risk opportunities for providers to share in savings generated from improving care quality and reducing costs below pre-determined target prices established by CMS.
The OCM program officially expired in June 2022. Over the program’s six years, 126 practices and 5 payers participated, impacting 100,000+ patients. Results were mixed, critically across demonstrated savings; however, a recent Community Oncology Alliance survey
suggests OCM had a lasting positive impact on patient experiences and best practices. The increased use of care navigation, care planning, and survivorship services – services practices could afford partially because of the additional MEOS payment – benefited providers and patients alike. According to the Community Oncology Alliance survey:
- 84% of providers wanted to continue in the OCM as it was currently operating, including full MEOS payments
- 80% of providers said they would have continued in OCM, even if MEOS payments were reduced by half
- 27% of providers would have continued with OCM without any MEOS payments
The survey results make it clear that providers viewed the program as a success on its impact to care quality and that the additional MEOS payments enabled additional support services.
Savings generated from the program are less clear. According to a Harvard Medical School study
, participants spent $297 less per six-month episode of care compared to the benchmark group. However, the savings were offset by an average of $704 in extra payments to cover the costs of the additional care-enhancing services. Overall, the program cost CMS $316 million over a 2.5-year measurement period. However, further complicating matters, during the OCM, immunotherapy and new-age treatments rapidly evolved (along with cost of treatments) and practices struggled to provide the necessary treatments while driving savings as CMS-driven pricing assumptions often did not adapt to the evolving world of cancer innovation and treatment cost in time. The overall program may not have met its goal to generate savings; however, there were a number of learnings for both oncologists and the CMMI throughout the many years of the program. Additionally, instilling a rigorous approach to care with a focus on value, quality, and outcomes, will further empower future success as the unstoppable shift to value-based care continues.
On the heels of the OCM ending and the associated lessons learned, CMMI introduced the second phase of oncology-focused value-based care – the Enhanced Oncology Model (EOM). The table below outlines some of the key changes in the latest EOM compared to the original OCM program:
Aligned with CMMIs vision for VBC
in the next 10 years, the EOM has a significant health equity component, which was notably absent from the original OCM. In the EOM, participants are required to capture and submit sociodemographic data. This requirement substantially increases data collection needs and as such, providers that have experience collecting and reporting this data, whether through historical research in health equity or participation in ACO Reach programs, may have a significant head start.
While the OCM included all Medicare populations receiving any form of systemic cancer therapy across 21 different cancer types, the EOM will significantly decrease the pool. In the latest model, beneficiaries receiving chemotherapy treatment across seven cancer types (breast cancer, lung cancer, lymphoma, multiple myeloma, colorectal, prostate, and leukemia) will be eligible. As a result of this limitation, investments made by providers to participate in EOM will not scale across its populations as significantly as previously. Conversely, the limited patient population removes a number of cancer types that contributed to the lack of aggregate savings in the OCM, with these complex cancers often driven by extreme outlier financial impacts and unreasonable price targets.
The reduced MEOS payment and revised risk arrangements will materially impact the economics for provider practices and are correlated levers in the ultimate design of EOM to drive savings. Provider groups will receive almost 50% less in MEOS payments than in OCM. Additionally, this MEOS revenue will effectively be fully at risk in the total cost of care calculation.
EOM offers two risk arrangements, both of which provide two-sided downside risk and greater share of upside savings. In both scenarios, if an episode generates 98% or greater expenditure versus the target, the participating provider will owe CMS a performance-based payment. Conversely, if savings are generated in excess of the 2% target, participants would be eligible for a performance-based payment. As a result of this change, EOM involves substantially more risk across all participating providers, given downside risk is mandatory. In addition, the “neutral zone” is greater, requiring practices to generate at least 2% in total cost of care savings. Coupled with changes in risk adjustment and target pricing, which should better track with rising costs of cancer treatment, provider groups that can succeed in the EOM, will have significantly more to gain.
Overall, the EOM requires significantly more data collection and reporting capabilities. Additionally, participating providers will have to quickly adapt in a full, two-sided risk arrangement. Provider groups with previous experience in two-sided risk and enhanced data capabilities will be well positioned for success. Partnering with the right vendors will be critical in successfully unlocking the triple aim. While lack of sufficient technology to support performance in VBC models had been a historical barrier to VBC adoption, oncology providers are now inundated with a growing selection of digital technology solutions.
Digital oncology-specific solutions have seen increased market activity and investment as the shift to value-based care creates an inherent need for enhanced digital technology infrastructure. Recent notable investments in the space include:
- Canopy, an intelligent care platform for oncology, announced $13 million in funding led by GSR Ventures. Canopy’s platform include a full suite of EMR-integrated solutions designed to allow practices to improve patient outcomes at lower cost.
- Navigating Cancer, an oncology patient relationship manager, raised $26 million in Series D funding led by the Merck Global Health Innovation Fund and TT Capital Partners. The company’s software platform connects providers and patients throughout the care cycle, empowering patients to engage in their care delivery both inside and outside of the clinic.
- Thyme Care, a provider of oncology care management and tech-enabled care navigation, received $22 million in funding led by Andreessen Horowitz, AlleyCorp, and Frist Cressey Ventures. Thyme Care connects patients, caregivers, providers, and payers in an effort to improve outcomes, align incentives, and engage patients at every stage of care.
- VieCure, an oncology-specific clinical-decision support platform, received a $25 million growth investment led by Northpond Ventures. VieCure assists oncologists in generating personalized treatment plans as well as the management of a patient’s treatment from diagnosis through follow-up care.
With the EOM going into effect within the coming year, TripleTree anticipates heightened market activity in oncology-specific value-based care solutions. The introduction of the EOM comes with new complexities, challenges, and an increased emphasis on health equity. As participants evaluate their existing capabilities, we expect to see accelerated adoption of new technologies to support their performance in VBC models. We look forward to monitoring the continued activity across the shifting value-based oncology care model and engaging with transformative companies to navigate the evolving market landscape.