Medicare Bundled Payments Initiative and Oncology Care

09 September 2014 Health Care Law Today Blog

The following post is provided by our guest author, Ronald Barkley, MS, JD from the Cancer Center Business Development Group. Ron can be reached at:

According to Modern Healthcare’sInterest Surges in Medicare Bundled Payment Initiative” article on July 31, 2014, enthusiasm for bundled pricing has been associated with the Medicare Bundled Payments for Care Improvement (BPCI) initiative, which has consisted principally of cardiac and orthopedic procedures with a hospital inpatient component. But what about modifying payment methods for oncology/cancer care? Is oncology next in line for alternate/bundled payment?

It now appears that, in fact, oncology is next up! In August, the Center for Medicare & Medicaid Innovation (CMMI) released its preliminary design description for the Oncology Care Model (OCM), which is expected to be formalized later this fall in the form of a major new CMMI grant initiative in alternate payment for chemotherapy services provided to Medicare fee-for-service beneficiaries. This CMMI initiative can be expected to be a “game changer” in the transformation from fee-for-service to alternate payment methodologies in oncology.

One among several threshold issues posed by the preliminary design of the OCM initiative describes that participants will be physician practices that furnish chemotherapy.

Is this definition of OCM participant to be taken literally, that is, only private medical practices with a chemotherapy service can qualify for the OCM program? What about the approximately 40% of community oncologists that are today “practicing” in relationship with a hospital oncology service (employed, PSA, MSA, co-management)?

In preliminary discussion with representatives from CMMI, it has been clarified that CMMI did not intend to exclude non-traditional private medical practices and, in fact, would welcome applications from other hospital-aligned oncologists. And in further clarification, practices that do not furnish chemotherapy directly in their office would not be precluded from participating. The threshold determinant is only that the Medicare FFS patient be “attributed” to the Tax ID/provider number of the physician/practice.

Invariably, the granular nuances of the OCM program will be reconciled during the OCM comment and Letter of Intent period (expected to commence by late October 2014). And regardless of the final form of the OCM program, expect it to receive significant response from the oncology/cancer care sector.

Foley & Lardner, in its continuing mission to provide timely information to the healthcare sector, is a Principal and Host of the annual Cancer Center Business Summit, this year November 6-7 in Chicago. Alternate payment initiatives and methodologies in oncology, including the CMMI-OCM, are featured content of the 2014 Summit. We encourage you to register and attend the 2014 Summit to learn more about this timely subject.

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