SummaryPressure to lower costs will increase for OCM providers as CMS pushes to 2-sided risk.
The Oncology Care Model (OCM), started in 2016, is a voluntary 5-year bundled-payment program developed by the Center for Medicare & Medicaid Innovation. The OCM encourages practices to improve care and lower costs through episode-based cost performance and quality measures. Currently, all OCM participants are enrolled in a 1-sided risk arrangement. Beginning January 1, 2020, CMS plans to require OCM practices that have not yet achieved a performance-based payment (PBP) in any of the first 4 performance periods to switch to a 2-sided risk arrangement or exit the program. Participants can choose from 2 risk-bearing arrangements: the original track created at the start of the program and the recently announced alternative track that offers less downside risk by creating a neutral performance zone in which additional payments are neither earned nor owed.
“Similar to the challenges that have faced the Medicare Shared Savings Program, CMS may need to further evaluate how quickly organizations can transition to taking on downside risk in the OCM,” said Richard Kane, associate principal at Avalere.
To understand the potential implications of requiring OCM practices to participate in 2-sided risk in the future, Avalere evaluated participants’ Medicare costs during the first 2 OCM performance periods and modeled how they would perform under each of the 3 risk arrangements now available in OCM.
Avalere estimates that approximately 70% of OCM practices would owe payments (recoupments) if they entered the original 2-sided risk arrangement. Nearly all practices would fare better in the new, alternative 2-sided risk arrangement compared to the original 2-sided risk arrangement. Avalere estimates that roughly half of OCM practices would owe payments (recoupments) if they entered the alternative 2-sided risk arrangement recently made available by CMS (Figure 1). For either 2-sided risk arrangement, Avalere estimates that a greater share of participants would earn PBPs compared to the 1-sided risk arrangement, due to the smaller discounts for their spending targets.
Avalere experts say that practices required to transition to 2-sided risk to remain in the OCM will likely need to evaluate not only their ability to earn PBPs in the OCM but also practice improvement costs, the value of the program’s monthly enhanced oncology services payments, and the potential for receiving 5% bonus payments for qualifying as (or eligible as) an advanced alternative payment model participant in QPP.
“Many practices that could be required to switch to 2-sided risk will likely face recoupment payments to CMS in future performance periods,” said Biruk Bekele, consultant at Avalere. “The decision to drop out of the OCM or switch to the new track will be decided on a practice-by-practice basis and will depend on many factors.”
Avalere performed this analysis using Medicare Part A/B FFS claims and Part D prescription drug event data under a CMS research data use agreement. A cohort of patients was selected that included all OCM-eligible Medicare FFS cancer patients receiving cancer treatment and represented less than 20% of total Medicare beneficiaries. Avalere replicated the OCM payment method developed by CMS (as specified by CMS for Performance Period 3 and after), including the attribution of episodes to practices, the calculation of participants’ benchmarks, and the estimation of their performance-based payments. Participants were identified in the PP1 and PP2 claims data through tax identification numbers reported on Part B claims. For this analysis, Avalere identified 163 practices that are currently enrolled in the OCM. Performance Periods 1 and 2 time periods include 6-month episodes beginning between July 1, 2016, and June 30, 2017.
To receive Avalere updates, connect with us.
produces measurable results. Let's work together.