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Can Bundled Payment Affect Reimbursement of Oncology Specialty?

September 12, 2017



can-bundled-payment-affect-reimbursement-of-oncology-Specialty

The cost of treating cancer is on an all-time high today. The reasons behind such increased spending are varied like aging population, growth in the number of individuals with insurance coverage, earlier diagnoses, and longer survival rates.

Additionally advances made in surgeries, radiation therapies, and medications are followed by adjacently rising treatment costs. The newly introduced Affordable Care Act (ACA) project, called the Oncology Care Model proposes to reward oncologists for spending less on Medicare beneficiaries undergoing chemotherapy over a six-month period set by CMS.

However, it requires the care providers to meet quality benchmarks to be eligible for the incentives. CMS has introduced bundled payment in Oncology care, and had also committed to pay the participating Oncologists a sum of $160 per month per beneficiary. This reward has been put in place to promote proactive care planning and reduce costs related to ED visits and other complications. CMS has well attempted to address cancer care complexities with the Oncology Care Model. The agency opted for a regression-based approach to create practice-specific benchmark episode prices. The methodology draws in national, regional, and practice-level data. To incorporate a practice-specific element, the federal agency decided to weigh practice-level adjustments to the benchmark at 50 percent to move projected expenditures to the national average. The 50 percent weight also provides flexibility for practice spending variations.

The Case of Bundled Payments in Oncology Care

Traditional reimbursement mechanism had all its focus on the quantity of services provided to the patient with no emphasis on improvements to be made in quality of service provided. Bundled payment provides a way for single payment for all services related to a specific condition or for wholesome treatment across a predefined time period. Time periods can vary over a range from acute hospitalizations to 90 days. Bundled care for oncology will revolve around 6-month episodes of patient care including chemotherapy. The Bundled payment benchmarks capture disease type data, but do not collect information on anatomical cancer stage, histology, biomarkers, or molecular mutations, which impact treatment costs.

Drug cost is calculated directly into revenue management for the majority of bundled payment models that are afloat. Health plans have been seen experimenting with different approaches to allow flexibility for providers using expensive new treatments. Approaches used include precisely defining bundles based on cancer stage and biomarker status, frequent adjustment of bundle prices and opting for a stop-loss provision to reduce financial risk to the provider after spending hits a certain threshold. Health plan leaders and providers opposed the bundled payments for oncology in view of underlying complexities of standardizing a bundle for a disease where variation is common. The unpredictability of drug costs was another issue of concern for them. While episode-based payment models aims to shift financial accountability to providers for furnishing services for specific conditions or procedures, there can be a case where a physician decides about using a new treatment based on financial constraints.

Effect on Reimbursements

Health moguls feel that the OCM penalizes current highly efficient practices and supported regional or national benchmark episode instead. However, it is estimated that benchmark episode prices, limited to regional or national data, would financially reward already efficient practices that made limited improvements. This regional benchmark episodes would also making it difficult for less-efficient practices to improve enough to achieve the episode savings necessary for a PBP [performance-based payments].

Due statistical variation in smaller patient populations, smaller practices are likely to experience substantial fluctuation in episode spending because of random variation & could be adversely affected by the initial benchmarking risk-adjustment methodology. Small practices may face challenges, but they will still receive Medicare fee-for-service and Monthly Enhanced Oncology Billing Services payments.

Other oncology practices are hospital-owned, whereas some practices agree to provide chemotherapy treatment in hospital outpatient departments. At some oncology practices, providers may bill under different TINs at separate locations, such as an outreach clinic, while still working at the same practice. Other employees at the same practice may also bill under a different TIN if they are employed by a hospital.

 

Category : Revenue Cycle Management