The Buzz this Week

In June 2022, the Centers for Medicare & Medicaid Services (CMS) announced its new voluntary cancer alternative payment model, the Enhancing Oncology Model (EOM). The new program builds on CMS’s original Oncology Care Model (OCM), which ended this summer. OCM lost more than $377M over a 5-year period, leading to a yearlong gap before EOM launches in mid-2023. This requires practices to shoulder the investments and operational changes put in place without reimbursement. When EOM launches, it will be for a 5-year test period and offer 2 risk arrangements, both requiring participants to take on some downside risk from the start of the model.

Participants will include oncology physician practices that treat Medicare patients undergoing chemotherapy for common cancers, such as breast cancer, prostate cancer, and lung cancer. EOM participants will be responsible for patient health quality and the total cost of care during a 6-month episode. EOM incentivizes enhanced care coordination and improvement of care quality and the patient experience while reducing spending. Participants have the potential to earn a performance-based payment or owe CMS a performance-based refund if total expenditures for episodes go beyond a certain threshold, both of which are calculated based on quality performance. Other payers can also participate and align with the model.

Unlike the OCM, EOM promotes health equity and provides additional payment to practices that offer enhanced services to the dual-eligible population. The new model requires that practices screen for social needs, report patient demographic information and develop plans to address health equity gaps in their patient population. This health equity focus aligns with the CMS Innovation Center’s recent strategic refresh to ensure payment models are more equitable and to increase focus on underserved populations. While EOM’s health equity features are laudable, practices will need to make additional investment and align resources while simultaneously receiving lower per-beneficiary Monthly Enhanced Oncology Services (MEOS) payments (dual-eligibles notwithstanding) relative to the MEOS for OCM.

EOM advances the journey toward value-based care in oncology and also supports President Biden’s Cancer Moonshot initiative that was relaunched in February 2022, with an ambitious goal of cutting in half the cancer death rate over the next 25 years. Addressing inequities also is a major priority of the initiative.

Why it Matters

Cancer is the second-leading cause of death in the United States despite advancements in treatment and improvements in outcomes. Age is a well-known risk factor for cancer with the rising life expectancy and rapidly growing older population. The COVID-19 pandemic disrupted routine cancer screenings and caused delays in medical care, leading to some cases being diagnosed later and at a later stage. In addition, though the gap is narrowing, significant racial disparities continue to exist in cancer screening, treatment, and outcomes. Black individuals continue to endure a disproportionate cancer burden, as discussed in a previous edition of Top Reads.

Cancer is a top driver of healthcare costs, and overall cancer costs continue to rise. CMS, payers, and providers are increasingly interested in experimenting with oncology payment reform, despite previous reluctance due to success under the fee-for-service model. The first wave of value-based care is actively disrupting primary care while the second movement is focusing on value-based specialty care. This second wave has investor-backed platforms actively entering the space, as seen with The Oncology Institute (TOI) and Oncology Care Partners. Both companies are building medical oncology platforms that drive high-value care and take risk directly with payers and risk-bearing primary care. TOI, the first specialty value-based care company to go public, aims to revolutionize the way cancer care is delivered and reimbursed. Other privately backed companies, like Thyme Care and Jasper, provide virtual cancer care navigation in partnership with a health plan. These investor-backed platforms are quickly being scaled, capitalizing on early outcomes improvement and cost reduction. It is evident that to achieve success in value-based care, the entire health ecosystem must be involved, with specialty healthcare groups included in the reform.

Related Links:

Healthcare Dive: 

Biden to "Supercharge" Cancer Moonshot Initiative

Healthcare Innovation: 

Oncology Care Model Follow-Up Has Equity Focus

Modern Healthcare: 

CMS to Begin New Oncology Payment Model

PE Hub: 

The Oncology Institute jump-starts next wave of value-based care

Editorial advisor: Roger Ray, MD, Chief Physician Executive.

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