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More Practices Would Receive a Novel Therapy Adjustment in Medicare’s New Oncology Care First Model

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New Avalere analysis finds that practices currently participating in the Oncology Care Model (OCM) would be more likely to receive a Novel Therapy Adjustment (NTA) in the newly proposed Oncology Care First (OCF) Model.

CMMI recently released an informal Request for Information (RFI) for the OCF Model, the newest oncology-specific alternative payment model that will serve as a continuation of the OCM. Responding to stakeholder feedback and lessons learned under the current demo, CMMI is considering calculating the NTA separately for each reconciliation-eligible cancer type, rather than at the practice level as is currently done in OCM. CMMI created the NTA in the OCM to account for the use of new, often expensive, innovative cancer therapies that were not available (or approved) during the model’s base period. The adjustment is designed to ensure practices are not discouraged from using treatments because of OCM’s financial incentives to control Medicare costs.

To explore the potential impact of a cancer-specific NTA under the OCF Model, Avalere estimated the effect on participants if the OCM’s current NTA methodology was replaced with a cancer-type-specific NTA methodology. With this methodological adjustment, participating practices would be given an adjustment for use of novel and innovative therapies at a cancer-specific, rather than practice-specific, level, resulting in increased granularity within the adjustment. Avalere’s analysis found that more practices would have had their performance-payment benchmarks increased for novel therapy use under the new methodology (see Figure 1). Higher benchmarks offer OCM participants the opportunity to achieve greater performance-based payments (PBPs) or reduce potential losses under downside risk.

Figure 1: Share of Participants by Percent Increase to Benchmark from NTA, OCM vs OCF, Performance Period 2 (OCM episodes beginning and ending in 2017)

Under the OCM’s one-sided risk track, Avalere found that approximately 30% of participants would receive a PBP under the existing OCM methodology. While switching to a cancer-specific NTA methodology would not significantly increase the number of participants receiving a PBP, Avalere found that about 85% of practices that received a PBP under OCM would have received larger PBPs under the new methodology.

Current OCM rules define a drug as a novel therapy for an indicated cancer type for 2 years from the date of FDA approval. The NTA for a participating OCM practice is based upon the relative use of new therapies across all 21 different cancer types in the model. The OCF Model RFI considers a cancer-specific methodology, which could assist in provider understanding of how novel therapy utilization impacts overall model performance. Figure 2 shows that OCM participants prescribed innovative therapies similarly to practices not participating in OCM, though there were significant variations across cancer types in the share of episodes utilizing a novel therapy. Under the NTA methodology considered in the OCF, practices would only need to exceed the non-OCM participant average of NTA use for a single cancer type to be eligible for an adjustment.

Figure 2: Share of Participants by Percent Increase to Benchmark from NTA, OCM vs OCF, Performance Period 2 (OCM episodes beginning and ending in 2017)

In addition to changes to the NTA, CMMI is considering additional ways to improve upon payment methodology from OCM to the OCF Model. For example, CMMI is considering altering calculation of the trend factor to be cancer specific in a similar manner to the changes being considered to the NTA. Further, CMMI is placing an increased emphasis on participation in two-sided risk and may adjust the parameters of risk tracks available in the model. Stakeholders should consider the combined impacts of any finalized changes when analyzing the OCF model. Broadly, these potential changes are a part of a larger effort by CMMI to better assess the quality and cost of cancer care in the OCF Model.


Avalere performed this analysis using its access to 100% of Medicare Part A/B fee-for-service (FFS) claims and Part D prescription drug event data under a CMS research data use agreement. A cohort of patients was selected that includes all OCM-eligible Medicare FFS cancer patients receiving cancer treatment and represented less than 20% of total Medicare beneficiaries. Performance period 2 includes 6-month episodes beginning between January and June 2017 and ending between July and December 2017. Avalere’s analysis uses a version of the OCM prediction model first implemented in performance period 3, which is applied retrospectively to performance period 2 data.

Avalere fully replicated the OCM payment methodology, including assigning episodes to cancer types, attributing episodes to participating practices, predicting episode costs, calculating risk-adjusted benchmarks, and determining PBPs. To receive an NTA under the OCM methodology, the share of a participating practice’s novel therapy payments to total episode payments must exceed the equivalent average of all non-participating practices. Under the cancer-specific methodology, participating practices would receive NTAs for only the cancer types where they exceeded the non-participants average share, and the sum of the individual adjustments would be added to the benchmark in the PBP calculation.

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