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The Case of Bundled Payments in Oncology Care Model

The Case of Bundled Payments in Oncology Care

The new bundled payment model from the Centers for Medicare & Medicaid Services (CMS) called the Oncology Care Model has shown strong participation numbers among healthcare providers with twice as many medical organizations participating than initially expected.

Research revealed that many organizations are experimenting with value-based payment models that aim to balance the competing goals of controlling costs and allowing access to advances in treatment.

4 value-based payment models are being tested in the commercial market:

  1. Financial incentives for adhering to clinical pathways
  2. Patient-centered medical homes
  3. Bundled payments
  4. Specialty accountable care organizations

In addition, CMS recently launched the Oncology Care Model, a 2-part payment system, resembling a PCMH and a bundled payment model. Many of these models target drug spending. A common element in all the value-based reimbursement models for oncology was a drug spending reduction goal. The models aimed to decrease prescription drug spending and utilization because medication costs represented the greatest cancer episode cost.

Providers engaging with the model had to adhere to the pathway between 70 and 85 percent of the time to qualify for financial incentives. The adherence range also gave providers flexibility for necessary care variations based on patient characteristics, preferences, and new treatments.

The clinical pathway model generated significant healthcare cost declines, especially for drug spending and healthcare utilization. Drug costs decreased between 5 and 38%.

Reduced toxicity also resulted in 7 to 42% less emergency department visits and 7 to 38% fewer hospital admissions.

Bundled payments also emerged as a common method for reducing cancer care costs. Most interviewees participating in bundled payment models stated that drug costs were part of the bundle which covered services anywhere between 1 -2 years.

The oncology bundled payment models resulted in the following cost and utilization reductions:

  • 32% less emergency room visits
  • 19% decrease in inpatient days
  • Drug spending stabilization after a historic increase between 16 and 19 % per year

The Oncology Care Model along with other CMS bundled payment programs are becoming more popular as more healthcare providers continue to transition to value-based care reimbursement. Private payers that haven’t yet should look to invest in bundled payment models to improve the quality of care and reduce spending.

Effects of Oncology Care Model

The growth and participation among cancer facilities in OCM is a positive sign in the transition to value-based payment and specifically, bundled payments and the future of healthcare. The providers that are seeking consulting services from MEDISYS to succeed in this particular bundled payment program can connect with their representative.

MEDISYS help providers with the implementation and management of the Oncology Care Model including adopting the right patient tracking tools, opportunity identification, compliance with bundled payment requirements, and physician practice transformation.

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