Getting 4 Steps Ahead of Oncology Bundled Payments


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Matt Allison
Senior Manager, Research and Grants

Time: 14 min


Last November, HHS Secretary Alex Azar announced that CMS will introduce mandatory oncology bundled payments.  This is a change in philosophy from the administration’s previous position on mandating new models of payment versus making all bundles voluntary. CMS now looks to build on the lessons learned from the mandatory Comprehensive Care for Joint Replacement Model and the Oncology Care Model (OCM) pilot project.

Bundled payments shift reimbursement from many individual payments to a single payment that covers all of the services associated with a particular episode of care.  This potentially includes all the inpatient, outpatient, emergency department, rehab, pharmacy, and other costs that a person may incur over the during the treatment of an illness.  For example, the OCM pays participating cancer clinics based on a six-month episode of care for cancer patients who start a chemotherapy treatment.

Why Bundled Payments?

Bundling payments creates an incentive for providers to work together and keep costs down.  It also creates the opportunity to improve the patient experience with services like navigation or health coaching that are typically not covered in a fee for service world.  Rethinking delivery of care in a way that prioritizes patient satisfaction, quality outcomes, and low costs aligns with the Triple AIM (fig 1) and is the cornerstone of any alternative payment model.

The Devil is in the Details

This all sounds great in theory but there are a few potential drawbacks to bundled payments.  First, defining an episode of care and tracking the type of care that should be “covered” is very complicated.  Should an oncology practice be responsible for the costs of a hospitalization that is related to a patient’s COPD?  What about the high cost of cutting-edge drugs?

Second, bundles have the potential to create competition for patients who are more inclined towards positive outcomes.  If you are a practice that takes care of patients grappling with social determinants of health or comorbidities, keeping the doors open and the lights on may prove to be difficult.  There are potential solutions to these and other problems with bundled payments, such as risk-adjusting based on the patient population, but this means the details of policy implementation incredibly important.

Which leads us to…


A Few Looming Questions about Oncology Bundles

We know from Secretary Azar’s statement that the oncology bundles will center around radiology, which is a notable change from the OCM’s focus on chemotherapy but not surprising since HHS identified the need for a radiation oncology model in a report to Congress last year.

As we wait for the details of the policy, there are a few major unknowns:

01: Will oncology bundles remain mandatory or who will be mandated to participate? 

Mandating participation would be a shift from previous positions and since CMS has not executed a radiology bundle then starting with a pilot may be the better path forward.  It is unlikely that everyone will be mandated to participate but we are waiting for the official policy to know participation requirements.

02: How will oncology bundles define an episode of care? 

The details about the time period, how expensive new therapies, such as proton therapy, are accounted for, and the scope of care will drive the definition of the care episode.  These details will drive success and failure for those that participate.

03: How does all this align with OCM?

If these models run concurrently then practices will have patients who fall into both the OCM and the radiology bundle.  CMS must determine how these programs will interact and how cost savings would be calculated.

Getting Ahead of Oncology Bundles – 4 Things You Can Do Today

While the details of the policy will drive much of the work surrounding the new bundled payments there is a need to take action now.  Here are a few things that cancer centers and radiology oncology programs can do right now.

01 Identify the ideal team to prepare for oncology bundled payments:

Tackling bundles, even if they are voluntary, will require a diverse team.  Work now to identify who would be part of oncology bundled team.  Consider including cross-disciplinary and diversity from many areas of a practice including navigators, doctors, nurses, QI staff, billing, and administration staff members.  A high functioning team will be necessary regardless of the bundle details.

02 Identify areas of greatest cost within radiology:

Reducing costs will be a part of a bundled payment.  Working to identify where radiology patients are incurring the greatest costs will put you ahead of the curve.  This could be readmissions, inpatient costs, or high variation in care.  Analyze your current information to find the lowest hanging fruit for improvement.

03 Review your data and quality measures: 

Improvements in care delivery will be driven by the data you have at your disposal.  CMS will provide data for bundle participants but this data will be retrospective in nature.  Lead an analysis of your existing data streams along with an honest evaluation of the organization’s ability to build the infrastructure to accurately track data that is needed to understand the relationship between an activity and its outcome.

04 Prioritize patient engagement:

The time between visits will be critical to any improvement efforts as practices are being held responsible for outcomes and therefore patient behavior.  Talk with practice leadership to determine how to engage patients outside of the four walls of a clinic.  The bundle provides the opportunity to rethink how you are engaging patients through areas such as navigation, digital tools, patient portals, education, or health coaching.  Better engagement can lift all boats to increase patient outcomes, education, and reduce costs.


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