On June 27, the Centers for Medicare and Medicaid Services (CMS) Innovation Center (CMMI) announced the Enhancing Oncology Model (EOM) and released a request for applications. This voluntary demonstration is the newest oncology-specific alternative payment model that will serve as a continuation of the OCM, with an increased focus on enhanced services to improve patient experience and support health equity.

Model Design and Learnings from OCM

The EOM is a voluntary, 6-month, total cost-of-care episodic payment model that, like OCM, focuses on beneficiaries with cancer who receive chemotherapy. According to Milena Sullivan, Managing Director at Avalere, “The EOM builds on the structure and learnings of OCM, but does not incorporate the foray into prospective bundles floated under the Oncology Care First proposal. CMMI leadership is laudably prioritizing health equity, but participants will need to balance between new responsibilities and more aggressive financial risk.”

“Despite speculation that CMMI would move away from specialty models and focus on accountable care more broadly, the Innovation Center has rolled out a streamlined and more targeted cancer model focused only on a subset of cancers that offer the highest opportunity to drive savings for the Medicare program,” explained Maddi Davidson, Consultant II at Avalere.

“Overall, oncology stakeholders are likely to welcome the new model and its close resemblance to the OCM, but we will likely see continued calls for more nuanced methodology updates to keep pace with learnings from the past 6 years and innovation in oncology care,” added Sullivan.

Impact on Providers, Manufacturers, and Payers

The new model will have a variety of implications for industry stakeholders. According to Shalini Parekh, Principal at Avalere, “With participants assuming risk immediately while also receiving lower enhanced services payments per beneficiary, providers will likely face increased pressure to reduce total cost of care under the EOM. Manufacturers should determine how the EOM may impact access to higher-cost regimens and formulate tailored value messaging strategies for engagement with providers.”

“While the new EOM maintains fee-for-service payments and drug reimbursement based on Average Sales Price, it lowers the monthly enhanced oncology services payment and moves providers into 1 of 2 different downside-risk arrangements. In addition to looking at clinical efficacy and safety when evaluating drug regimens, providers will need to have good visibility into their drug spend and payer mix. Life sciences companies will have to understand these considerations, and how they vary by provider segment and site of care,” explained Omar Hafez, Managing Director at Avalere.

“With the EOM maintaining its anchor point to a 6-month episode, the ability for this model to assess how patients respond and the differential costs associated with care for patients who respond to innovative therapy and management remains unanswered,” said Lance Grady, Practice Director at Avalere. “Certainly, costs in the first 6 months of care do not always equate to costs in a subsequent 6-month period. As such, this brings the calculation of the value of a therapy or regimen into question.”

Regarding the payer impact, Grady said, “Oncologists continue to lead in advancing innovative value-based payment arrangements and in many instances often shape how risk-based commercial contracts with payers are established. CMMI attempting to extend an all-payer model in the market could perhaps be more easily accomplished via the EOM than other models.”

Focus on Patient Outcomes and Health Equity

Another difference between the EOM and OCM is the new model’s explicit focus on health equity, including the gradual implementation of electronically submitted patient-reported outcomes and screening for EOM beneficiaries’ social needs. Participants are also required, as part of their use of data for continuous improvement, to submit health equity plans to CMS detailing evidence-based strategies to reduce identified health disparities.

“Cancer does not discriminate, but inequity of health outcomes remains. I am excited to see the EOM focus on health disparities and their driving factors and know that Avalere can provide insights and a patient-centric approach to help us all better understand these complex challenges in oncology,” said Sarah Alwardt, Practice Director at Avalere. “Oceans of administrative healthcare data exist, but there are precious little data on how patients actually feel about their therapy, quality of life, or other pressures on their cancer journey. The EOM will not only help us answer some of these questions about participating beneficiaries but also improve data collection on these factors and other social determinants of health to allow us to better serve patients in the future.”

 To learn more about the EOM, connect with us.