EOM Payment Methodology Updated as Start Date Approaches

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Amid stakeholder speculation for the future of the EOM, CMMI continues to plan for July 2023 implementation and released key payment methodology details.

On May 1, the Center for Medicare & Medicaid Innovation (CMMI) released additional information on the forthcoming Enhancing Oncology Model (EOM). The updated payment methodology clarifies how implications of the Inflation Reduction Act (IRA) will be accounted for in the EOM, provides clinical adjustment values for benchmark pricing, and corrects an error in the previously published experience adjustor calculation. CMMI also published information on sociodemographic data collection requirements, quality measure specifications, and performance period (PP) one initiating therapies. Details on these core EOM methodology updates are described below.

IRA implementation provisions will be clarified over the next several years and will change Medicare payment liability as well as beneficiary cost-sharing. CMMI added details on how the EOM methodology will account for IRA-related changes that occurred before EOM PP1 (episodes initiated between July 2023 and December 2023 and ending by June 2024).

  • Medicare Payment for Certain Biosimilar Products: Historically, biosimilars were reimbursed as the average sales price (ASP) plus 6% of the ASP of the reference biological. Under the IRA, certain biosimilars will be reimbursed as ASP plus 8% of the ASP of the reference biological for a 5-year period, beginning October 2022. While EOM participants will be reimbursed at ASP plus 8%, the total episode expenditure calculation will only include the original 6% add-on.
  • Medicare Payment Increase Due to Part B Inflation Penalty: Medicare Part B beneficiary cost-sharing will be reduced from the standard 20% for rebatable drugs where the price of the Part B drug increases faster than the rate of inflation. Medicare reimbursement to providers will increase to account for a cost-sharing decrease. The EOM episode expenditure calculation will only include the amount that would have been paid by Medicare before the IRA.

CMMI has not yet clarified how the EOM payment methodology will account for other IRA-related changes such as decreased Medicare liability based on Part D redesign or drug price negotiation.

Clinical adjusters in EOM are used to calculate the benchmark price per episode and aim to account for clinical characteristics that drive episode expenditures. These adjusters are reported to a clinical data registry and capture characteristics not available in claims data. The original EOM payment methodology noted that adjusters would be applied for “ever metastatic” status in breast, lung, and small intestine/colorectal cancer and “HER2” status in breast cancer but did not publish the adjuster values. In its latest update, CMMI published the clinical adjuster values. A value above 1.0 will increase the benchmark price while a value below 1.0 will decrease the benchmark price. EOM participants must submit clinical and staging data for at least 90% of their attributed episodes per performance period for the clinical adjuster to be applied. CMMI noted additional specifications and reporting will be included in future documentation.

Table 1. Clinical Adjusters for Lung, Small Intestine/Colorectal, and Breast Cancers
Cancer type Ever Metastatic Never Metastatic
Lung 1.06061273 0.93381332
Small Intestine/Colorectal 1.10108496 0.89955301
Breast HER2 Positive 1.23161427 1.11563469
Breast Not HER2 Positive 0.98631569 0.86109513

Source: Enhancing Oncology Model (EOM) Payment Methodology Changes.

Experience adjuster methodology was updated in the most recent EOM payment methodology document to correct an error in the original documentation. CMMI clarified that the weights given to national, regional, and EOM participant-specific ratios when calculating the blended adjuster for a cancer type depend on the number of attributed baseline period episodes in that particular cancer type. The experience adjustor aims to control for regional and participant-specific variation not otherwise measured in price prediction model.

Table 2. Weighting of National, Regional, and EOM Participant-Specific Ratios to Calculate Cancer Type-Specific Blended Experience Adjusters

EOM Participant Number of Attributed Episodes in Model Baseline National Ratio Weight Regional Ratio Weight EOM Participant-Specific Ratio Weight
Fewer than 50 episodes 50% 50% 0%
50–99 episodes 50% 30% 20%
100 or more episodes 50% 15% 35%

Source: Enhancing Oncology Model (EOM) Payment Methodology Changes.

Sociodemographic data collection and reporting is a key component of the EOM health equity strategy. Participants are required to collect data from willing patients and report the data to the Center for Medicare and Medicaid Services (CMS) for evaluation and monitoring. CMMI has noted that participants can use the data internally to identify gaps in care and inform their Health Equity Plan for EOM beneficiaries. Data will be reported no more than once per 6-month PP and include sex assigned at birth, race, ethnicity, sexual orientation, gender identity, preferred language, and may eventually include disability status. Participants must report data for attributed episodes within 30 days of receiving the episode attribution list through a centralized reporting platform, which will also collect clinical and quality measure data.

EOM quality measures focus on patient experience, avoidable acute care utilization, management of treatment-related symptoms, psychosocial health, and end-of-life care. Three measures are claims-based, two are reported by the EOM participants, and one is patient reported. Participant-reported outcomes are not required until PP2 and, to reduce reporting burden, align with the MIPS Clinical Quality Measure (CQM) specifications. CMS will use a multi-item survey to assess patient experience. The six quality measures are assigned an EOM “aggregate quality score” that is used to calculate the final performance-based payment or recoupment.

Initiating therapies are determined by CMMI for each PP and identify therapies that, along with a qualifying cancer diagnosis, trigger the beginning of a 6-month episode of care. There are 211 products on the PP1 initiating therapy list which includes Part B and D drugs. In alignment with the EOM methodology, CAR-T products are not included in the initiating therapy list.

Avalere’s Take

CMMI’s update to the EOM payment methodology and release of additional technical detail signals the innovation center’s commitment to the model start date this July. Practices are expected to sign participation agreements by May 9, after which they can request baseline data for their practice’s attributed beneficiaries. While the updated information released by CMMI will improve practices’ ability to analyze their data and make an informed decision regarding model participation, several questions remain outstanding such as how metastatic or HR+ episodes will be identified. CMMI updated key questions about IRA provisions that impact payment in the first year of the EOM, but questions regarding Part D redesign and price negotiation, which go into effect in years two and four of the EOM, respectively, are outstanding.

Avalere leverages deep expertise in policy, market access, data analytics, and quality disciplines to support stakeholders navigating the EOM and broader oncology trends. To learn more about the evolving oncology landscape and how Avalere can help your business drive access and continuity of care, connect with us.

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