The Oncology Care Model Performance Period 2 Results: Practices Are Making Some Progress, But Major Challenges Remain

Abstract: When launched in 2016, the Oncology Care Model (OCM) represented one of the most advanced efforts yet to migrate health care delivery from fee-for-service to fee-for-value. Practices representing nearly 3000 oncologists signed on to participate. Since then, much has been written about potential strengths and weaknesses of the model. New to the discussion is a wave of data. Practices received the results of their first performance period in February 2018 and the second performance period at the end of August 2018. This has afforded them the opportunity to identify strengths and areas for improvement, both based on what the data tells them and how it changes across performance periods. This article draws on the aggregated data and experiences of a large segment of community OCM participants to highlight the primary challenges that arose once practices were confronted with the Centers for Medicare & Medicaid Service’s assessment of their performance. In addition, the article highlights high-impact interventions that oncology practices are undertaking to further improve both care quality and cost. 

On August 31, 2018, the Centers for Medicare & Medicaid Services (CMS) released its second set of Oncology Care Model (OCM) performance results. This included reports covering the first 2 OCM performance periods—a revision of Performance Period 1 (PP1) results, which measured the period with episodes starting July 1, 2016 to January 1, 2017, as well as brand new results for Performance Period 2 (PP2), which covered episodes starting January 2, 2017 to July 1, 2017. The focus of the reporting was to provide utilization and quality performance details, trend and novel drug therapy adjustment results, and average actual episode costs compared to target or expected episode costs for participating OCM practices. Additionally, CMS sought to reconcile Performance Based Payment (PBP) achievement on one hand while truing up so-called Monthly-Enhanced Oncology Services (MEOS) payments on the other—recouping overages as deemed appropriate. 

The PBP Reconciliation reports reflect the OCM calculation of whether the practice has earned a performance-based bonus, based on the difference between actual expenditures per qualifying 6-month episode of cancer care and a CMS target price. As participants of the OCM program, the practices are also allowed to bill MEOS claims to support the additional services being delivered to OCM beneficiaries. The MEOS Recoupment report assesses the practice’s effectiveness at identifying beneficiaries who were eligible for the OCM based on CMS guidelines. To be eligible for the enhanced payment, the patient must have a qualifying diagnosis associated with the initiation or continuation of a qualifying chemotherapy agent. CMS provides the aggregated summary and details of all MEOS payments that were billed and then paid in error for the given period. While there are a variety of reasons why recoupment may be triggered, the 2 most common were either because beneficiaries were not attributed to the OCM practice based on the plurality of evaluation and management (E&M) office visit claims during the respective performance period or because patients were deemed not to have had a qualifying cancer diagnosis and/or no active treatment therapy in proximity to the diagnosis. All CMS attribution is based on a retrospective evaluation of paid claims data.  

Integra Connect works with one of the largest cohorts of OCM providers nationwide, nearly 900 of them, including some of its preeminent participants, and therefore conducts regular qualitative and quantitative analyses of aggregated practice performance. In this article, we summarize performance trends from PP1 to PP2, assess potential financial and operational concerns revealed by PP2 results and share some of the best practices adopted to support future performance objectives. While fully digesting PP2 data and its implications will likely take practices many more weeks, our high-level initial findings include the items listed in Box 1. Our analyses are based on the individual Center for Medicare & Medicaid Innovation reports provided to OCM participants within our cohort and are therefore proprietary data.

OCM Practices are Closing the Cost Gap

For OCM PP1, the PP1 True Up Reconciliation Report included adjustments to the Initial Reconciliation Report. Because oncologists participating in the OCM program are accountable for reducing total costs of care for each qualifying 6-month chemotherapy episode—across all settings and conditions—the purpose of the True Up Reconciliation is to reflect any laggard claims, primarily from hospitals, that increased either the Target Price or Actual Expenses since the initial assessment in February 2018. In the PP1 Initial Reconciliation Report, fewer practices received performance bonuses than expected based on historical performance trends, leaving most anxious to see whether the True Up Reconciliation Report results would be more or less favorable. 

While a few practices reduced their average price per episode with the additional claims, the majority found that the incorporation of late-arriving claims caused their overall episode costs to go up, either reducing or eliminating the savings achieved—not to mention reversing the bonus they had been paid, as noted during the OCM PP1 First True-Up and PP2 Initial Reconciliation Overview Office Hours.¹ CMS indicated that such practices therefore needed to pay back the funds they had received months ago.¹ This came as an unwelcome surprise, especially since the practices had typically already invested these dollars into OCM improvement initiatives prescribed by CMS, such as care navigation or expanded office hours.

For OCM PP2, the PP2 Initial Reconciliation Report provided more of a relief. Our cohort of OCM practices experienced a preliminary average PBP Reconciliation improvement of 46% from initial PP1 to initial PP2 results. While this progress may be attributable to the implementation of practice transformation activities and related cost-efficiencies, favorable changes in model calculation as well as trend factor and novel therapy adjustments also contributed to the perceived performance improvements. 

MEOS Attribution Logic Still a Top Concern for OCM Practices  

For many practices, lack of a performance-based bonus means the enhanced patient services, program management staff, and technology investments must be funded through MEOS payments. In the PP1 Initial Assessment, all practices were asked to return some portion of MEOS payments as a result of beneficiaries either being not attributed to the practice or deemed to have not had a qualifying episode. Recoupments averaged 30% or more of total MEOS payments, based on our analyses. Unfortunately, practices still struggled to correctly identify patients in PP2, with MEOS Recoupments nearly doubling to as much as 60% of total payments. This high proportion of recoupments is especially concerning for those practices who have been immediately reinvesting their MEOS payments into practice operations without amassing the cash reserves to cover possible recoupments. 

What caused the disparity? Practices struggled to recreate CMS logic for identifying beneficiaries due to several factors, including a lack of holistic patient data across care settings; inability to track the plurality of E&M visits, which resulted in patients being attributed to other providers; and absence of real-time reporting to determine whether patients met the qualifying criteria. These issues were likely compounded for PP2 due to carry-over mistakes from PP1. If a practice incorrectly collected a MEOS payment for a patient in PP1, it would not have known until well over a year later—too late to prevent spillover into PP2. Furthermore, CMS confirmed¹ that even more recoupments were flagged in PP1 but not reported until now, due to the overlap of episodes and allowable MEOS billing date ranges across multiple performance period claim submission windows. In addition, practices that submitted contestations of PP1 recoupment demands were upset to receive denials across the board. Because of this overlap, it is expected that PP3 MEOS Recoupment could be even larger as a result of the valid MEOS billing periods overlapping across 3 different performance periods.  From that point, however, MEOS recoupment is expected to stabilize.

Amid widespread frustration, CMS took initial steps to incorporate feedback from OCM participants to improve the model moving forward.² For example, the original attribution design included attribution to Tax Identification Numbers (TINs) based on the plurality of E&M visits, regardless of the types of providers employed by the TIN.  This is especially problematic for breast cancer and prostate cancer patients who may visit their gynecologist or urologist, respectively, multiple times during a chemotherapy episode, as well as cancer patients with multiple comorbidities, such as heart disease or diabetes. In response to concerns raised by this approach, CMS has updated² the OCM attribution methodology to only count E&M visits for practices with TINs for which there is at least one associated oncologist specialist. While this change could have significant impact on patients attributed to specific practices—and therefore limit payment recoupment—the changes will become effective starting² with PP3 (episodes beginning after July 2, 2017) and do not affect PP1 or PP2 MEOS recoupment results. 

Additionally, the CMS provided more details in PP2 with respect to reasons for individual payment recoupments, which should facilitate a more transparent contestation process in the future. While these details can also be used by practices to better understand recoupment rationale and likewise improve OCM patient identification moving forward, practices will not be able to apply them to immediately subsequent performance periods due to the retrospective nature of the OCM program. 

Practices Respond to Challenges By Identifying New Improvement Opportunities

The receipt of PP2 results also marked an inflection point in practices’ efforts to improve performance. As they internalized the new CMS data, they doubled down on the following new focus areas.

More consistent, comprehensive documentation of comorbidities. Under fee-for-service models, oncologists’ clinical documentation centered around in-office encounters. Comorbidities were most commonly captured as part of the patient intake process for emergency room (ER) visits. As OCM participants introduced care navigation services to redirect cancer patients away from the ER, details that would have been captured during those visits also started to disappear. This resulted in a significant omission, as our data has shown that a high percentage of patients with complications, ER visits, and hospitalizations are related to comorbid conditions. Without accurate coding of and billing for comorbidities, CMS Target Prices for episodes became unrealistically low. 

In response, OCM practices are starting to proactively identify and mitigate documentation gaps to maintain a holistic view of each patient and protect their cash flows. As an example, after performing a detailed, retrospective analysis of their patients’ clinical and financial histories, one practice concluded that they could increase their CMS Target Price by as much as 50% with more accurate and complete coding of comorbidities. In addition, they are identifying high-priority comorbid conditions, such as diabetes, cardiac disease, and chronic obstructive pulmonary disease, and then ensuring appropriate referrals to co-manage the patient, to help minimize these events in the first place.

Utilization of novel therapies based on value, not just cost. When the OCM program launched in July 2016, Part B and D drug costs across practices in our cohort accounted for at least 50% of total cost of care for OCM qualifying cancer patients. With the introduction of care navigation services and reduction of ER visits and hospitalizations, the relative proportion of total costs attributed to drugs continues to rise as a percentage of total average costs per episode. This has brought more attention and scrutiny to use of expensive agents, particularly novel therapies. Practices have started to take steps toward understanding the value of specific therapies as expressed by quality of care—including efficacy and toxicity—as well as total cost, including the likelihood of high-cost resource utilization such as ER visits and inpatient hospitalizations. They have also increased focus on supportive therapies, such as bone marrow-stimulating agents and long-acting anti-emetics, to help prevent adverse reactions and subsequent ER visits and hospitalizations. Decisions on the choice of therapies will need to be weighed balancing the impact on total cost and potential to contribute to a performance-based bonus vs the drug margin revenue impact on the practice for those drugs providers administer in office.  

Existing Initiatives to Improve Cost and Quality are Gaining New Momentum 

The PP2-driven improvement opportunities joined ongoing efforts aimed at managing the quality and cost-efficiency of care for OCM success, including the following. 

Reducing ER visits and hospitalizations. Among our sample set of OCM practices, most are introducing care navigation and management services to more proactively manage their OCM patient population. However, the most successful practices are upping the ante by risk stratifying, segmenting, and then proactively engaging high-risk patients by delivering value-added services tailored by cohort, such as patient education, proactive monitoring, and more. The key for this initiative is early identification using either risk prediction models along with real-time hospital census data. Other practices have emphasized providing patients with alternatives to the ER, such as extended office hours and new symptom triage and management protocols. 

They are also tracking inpatient admissions more proactively to manage the transition in care post-discharge and ensure adequate home support and timely follow up, thus preventing readmissions. At the core of such activities is care navigation and case management. Not all practices have access to the same level of resources in their markets to perform this work, and such resources add a cost burden on the program that may not be fully covered by the MEOS payments. Therefore, use of tools that help automate these activities as much as possible will be important but at this stage remains a work in progress. 

Clinical pathway introduction and adherence. High-performing practices in our cohort are treating the OCM as an opportunity to accelerate efforts to ingrain evidence-based clinical pathways that support improved clinical outcomes for their patients while also promoting cost-efficiency. They are taking a programmatic approach that involves identifying the highest-impact disease states and decision points for pathway introduction. For example, pathways may be used for a subset of cancer types including high volume ones that benefit the greatest number of patients or cancers where the actual costs vs target price have high degrees of variance. 

To ensure productive adoption, practices then introduce varying degrees of education, financial incentives, and cultural change with the dual goal of improved survival rates as well as reduced costs. For example, one practice is incorporating pathway adherence into provider performance reviews and tracks compliance monthly. When possible, practices also seek to integrate both pathways and compliance levels directly into their electronic health record (EHR) solutions and related workflows.   

Managing end-of-life resources. Many OCM practices are reconsidering aggressive and costly interventions in advanced stages of illness, as deemed appropriate by evidence-based guidelines, instead referring patients to palliative care, hospice, or in-home care resources. The primary challenge is earlier identification and counseling of patients who in fact represent a subset of all cancer patients, as the OCM program is limited to individuals who are actively receiving chemotherapy. It is a challenge for physicians to recommend chemotherapy one day and discuss end-of-life planning during a subsequent office visit. It will also require a cultural change for many providers who are not used to or comfortable with having such conversations with the patient. 

Using data to understand and manage their OCM population. The best practices put data to work to understand population-wide cost drivers and savings opportunities, risk stratify their patients, make decisions on choice of therapy, track patient progress, and monitor performance. This insight will be an ongoing challenge for many practices who lack the expertise to analyze medical claims, have difficulty accessing data from their EHRs and other source systems, and need to provide timely and actionable feedback to their providers. Furthermore, such activities must be aligned to incentives and governance process that reward—or penalize—providers accordingly. 

The Path Forward for OCM Practices

To address the most significant and common challenges experienced by OCM participants during PP1 and PP2 and to facilitate the long-term success of the OCM program, the following opportunities for change present themselves. 

Continuous improvement of MEOS eligibility logic. CMS has acknowledged² that current OCM attribution methodology related to plurality of E&M visits is problematic, and they will be introducing a change starting in PP3 to count only TINs with at least one oncology provider.² That said, final beneficiary attribution, which determines whether a patient met all requirements for a qualifying 6-month chemotherapy episode, remains a significant challenge to practices who do not have full visibility to all CMS claims in realtime, and may not have the in-house expertise to evaluate CMS claims that are delivered retrospectively.

More realistic target prices. Practices that Integra Connect has engaged with felt the CMS Target Prices have been set unrealistically low. This observation was evidenced by the fact that some of the most efficient practices—those with the best benchmarks in the country—were not shown as generating savings. Moreover, growth in novel therapies has been outpacing expectations. Target pricing should better reflect practices’ historical costs as well as accommodate appropriate novel therapies. CMS has indicated that they will consider additional data sources like staging information to improve the Target Price calculation methodology. 

More timely performance feedback. Delayed performance reporting has made it challenging for practices to incorporate feedback and improve in time to impact on the subsequent performance periods. To keep participants motivated, practices should have access to their data as close to real-time as possible to proactively address negative performance outliers, improving their chances of earning a performance-based payment.

Conclusion

As practices look to the future, they are confronted with the next major inflection point of the OCM program: either generating savings within at least one performance period by the initial reconciliation of PP4 or being forced to choose between opting into the 2-sided risk model or exiting the program altogether. While some practices may feel discouraged by the results from the first 2 performance periods, PP2 offered a glimmer of hope and the next performance periods, PP3 and PP4, reflect a timeframe in which the impact of initial operational improvements and investments will come to light more fully. Moreover, CMS has demonstrated some openness to making positive adjustments to the program based on participant feedback. In short, while the OCM program needs work, there is continued potential as OCM practices stay on the journey.

References 

1. OCM PP1 First True-Up and PP2 Initial Reconciliation Overview. Office Hours.
[transcript]. September 3, 2019.

2. OCM Frequently Asked Questions. Version 31.0. August 6, 2018.