The Centers for Medicare & Medicaid Services’ (CMS) Oncology Care Model (OCM) was designed as an alternative payment model (APM) focused on the pieces of the total cost of oncology care that providers could directly control, specifically hospital admissions, ER use and related facility utilization. It was initially not designed as a drug pricing model, as the assumption at the time was that drug costs were tied to inappropriate utilization.
From 2012-2017, practices were able to keep facility costs relatively stable and facility utilization began to trend downwards. However, results from the third performance period released earlier this year show that the share of practices who are generating shared savings did not increase from the previous period. Additionally, there are many frustrations with OCM, such as issues with patient attribution, cumbersome reporting and flaws in the ratings for geography and quality measures. Compounding these challenges is the emergence of immunotherapies over the past several years, which were not factored in to the original model. Although these therapies show tremendous promise, their prices are unpredictable, and patients are often on these therapies for longer periods of time. Oncologists using these therapies have been penalized as a result, essentially making the pricing components of the original model irrelevant.
With these challenges in mind, COA has compiled their suggestions and ideas into their own “OCM 2.0” version that is in the process of being submitted to a federal agency that reviews models for possible use by Medicare. Developed with input from both practices and pharmaceutical companies, COA’s proposed OCM 2.0 model is designed as a template that all types of payers – Medicare, commercial payers and employers – could potentially use to develop new payment systems. COA’s model will have more of a focus on the drugs and new therapies changing the standards of care in oncology. It will also feature less onerous reporting and calculations for performance-based payments.
It remains to be seen whether CMS will adopt OCM 2.0 as a framework for developing future models. Bo Gamble, COA’s director of strategic price initiatives, commented in the presentation that he expects to see more value-based scenarios involving providers than ever before, suggesting that practices should expect payment reform innovation and experimentation by COA and others to increase in the years to come.