Oncology Care Model Results In Severe Losses To Medicare

Nikki Attkisson | Last Updated : December 1, 2021

In 2016, the Centre for Medicare and Medicaid Innovation (CMS Innovation Centre) introduced the Oncology Medical Model (OCM) which is a payment and delivery model designed to improve the efficiency and effectiveness of medical care.

Oncology Care Model Results In Severe Losses To Medicare

Cancer, as everyone knows, is a devastating disease and its causes have been rapidly increasing throughout the years in the United States. Through the OCM, CMS wanted to target 3 things, better care for the people suffering from cancer, smarter spending, and healthier people.

Oncology Care Model Results In Severe Losses To Medicare

While OCM led to modest savings per care episode, but when the monthly and performance-based payments are considered, a whopping loss of $315 million to Medicare was reported as per a thorough study of the program.

As per Nancy Keating, a Professor of Health Policy and Medicine in the Department of Health Care Policy at Harvard Medical School, Boston, and the lead author of the JAMA study which reported about the loss, the OCM has not achieved the results that were expected when the model was launched and thus the CMS won’t be able to expand it nationally.

CMS would need to develop and test new models to minimize their losses and benefit the citizens of the country at the same time.

The JAMA study not only estimated a net loss of $315.6 million to Medicare between 2016 and 2019 but also found no significant difference in the use of most services, quality, or patient experience, thus highlighting the flaws of OCM.

When the OCM was introduced in 2016, more than 3,200 oncologists and 201 medical practitioners volunteered for the program.

Everyone had huge expectations from the program as it represents the largest alternative payment model aimed to address value-based payment for cancer treatment, but the JAMA study shows that since its implementation, the program has had mixed results.

An analysis showed that a large community practice saved Medicare $ 3 million over a year after adopting OCM, however, another study showed that while community practices experienced a reduction in drug costs in cases of lung and prostate cancer, the difference was not significant when all costs were taken into account.

Another study found cost reductions for all cancers was balanced by the high administrative expenses resulting in a net loss of $ 155 million for Medicare through OCM in 4 years.

So, what now?

The OCM program is expected to end by 2022 and Medicare has decided to replace it with a new model, namely the Oncology Care First (OCF) model. The OCF model is quite different from OCM but whether it would be successful is hard to predict. OCF will not include low-risk cancer episodes, such as adjuvant hormone therapy for breast or prostate cancer, for which cancer treatment is generally not the primary driver of overall care costs.

Additionally, the OCM fee-for-service backbone and the additional $ 160 additional monthly payments is going to be replaced by a single potential transfer payment for each 6-month period. As per Keating, the model has not been thoroughly compared with the OCM and the rollout of the OCF model has also been delayed, so addressing on its impact is not an easy task.

It is necessary that a smooth transition between the models takes place because many practices have come to rely on Monthly Enhanced Oncology Service Payments to hire staff to support care-enhancing activities required by OCM.

As per Keating, the practices might be able to sustain these activities without a model that provides such a payment method.

Deborah Schrag, of the Memorial Sloan Kettering Cancer Center, New York City, feels that OCM’s success lies in the fact that such a model of payment was introduced, and it did not undermine the care of the patients in any way. This proves that it’s only onwards and upwards from here as the model can be improved with time.

Nikki Attkisson

With over 15 years as a practicing journalist, Nikki Attkisson found herself at Powdersville Post now after working at several other publications. She is an award-winning journalist with an entrepreneurial spirit and worked as a journalist covering technology, innovation, environmental issues, politics, health etc. Nikki Attkisson has also worked on product development, content strategy, and editorial management for numerous media companies. She began her career at local news stations and worked as a reporter in national newspapers.

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