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340B Mega Guidance: What Providers Need to Know

Posted in Cancer Care, Healthcare Reform, ACCC News, Advocacy by ACCCBuzz on September 1, 2015

iStock_000009397000LargeBy Maureen Leddy, JD, Policy Coordinator, ACCC

On August 27, 2015, the Health Resources and Services Administration (HRSA) released the much-anticipated mega-guidance for the 340B Drug Pricing Program. The 340B program provides discounted outpatient drug pricing for specified safety-net healthcare organizations, known as covered entities. The guidance was long-requested by covered entities and drug manufacturers, both of whom seek clarity in definitions and various elements of the program. HRSA considered proposing a regulation last year, but determined it did not have rulemaking authority. Consequentially, it has now proposed guidance, which while not legally binding, does inform 340B program participants on how HRSA believes the program should operate. From the perspective of a healthcare provider seeking to avoid audit under the 340B program, HRSA’s guidance should be given significant weight.

Providers should note HRSA’s definitions of both a 340B patient and a covered entity. The guidance appears to narrow the definition of a patient, allowing 340B drug eligibility on a drug-by-drug basis, specific to the medical issue for which the patient is being treated as an outpatient at the covered entity. Previously, a covered entity could provide a patient with any necessary drugs under 340B pricing, regardless of the scope of treatment.

The guidance also proposes a new standard that a child site of a covered entity hospital must provide services with associated Medicare outpatient costs and charges, in addition to the current standard that the child site be listed on a reimbursable line of the covered entity’s Medicare cost report. HRSA also makes clear that a covered entity’s inclusion in a larger organization such as an accountable care organization, does not qualify the larger organization for the 340B program.  Finally, HRSA requests feedback on ways to demonstrate eligibility of off-site facilities.

Also notable from the provider perspective is guidance related to audit processes.  HRSA proposes a notice and hearing process for 340B audits by the agency. Covered entities found not to be in compliance may be subject to corrective action plans, and loss of eligibility in the 340B program. HRSA also tightens standards for manufacturer audits of covered entities, requiring “reasonable cause,” while failing to impose any requirement that the agency act upon manufacturer audit results.

ACCC will continue to review this 340B mega guidance leading up to the October 28, 2015 comment deadline, and welcomes member input and questions.

Defining Value in Cancer Care

Posted in ACCC News, Advocacy, Cancer Care by ACCCBuzz on September 1, 2015

imagesBy Leah Ralph, Manager, Provider Economics and Public Policy, ACCC

Earlier this summer, ASCO released its much anticipated “value framework,” a proposed methodology designed to assist physicians and patients in assessing the value of different cancer treatment options. Comments on the framework were due last week, and a variety of stakeholders – including providers, patient groups, and manufacturers – provided feedback on the model.

While most would agree the framework is not yet ready for the clinical setting, it represents an important step in the broader conversation about measuring value in cancer care. As a conceptual framework, it seems to have done its job. But as ASCO points out, it is critical to consider this tool in context. The methodology contains notable limitations in data, practicality, and scope, and payers and policymakers should be cautioned that this framework is not meant to serve as a basis for reimbursement or coverage determinations.

ASCO’s approach uses randomized clinical trial data to compare new treatments with an established standard of care under two different scenarios: the advanced disease setting and the adjuvant (potentially curable) setting. A treatment receives a net health benefit (NHB) score (up to 130 points for advanced and 100 points for adjuvant) by combining a score for clinical benefit (up to 80 points), toxicity (up to 20 points), and up to 30 bonus points for quality of life measures, including palliation of symptoms and treatment-free intervals in the advanced disease setting. The NHB score is intended to demonstrate the added benefit patients may receive from a new cancer drug compared with a current standard of care.

Under the proposed framework, the clinical benefit score gives most weight to therapies that increase overall survival, followed by progression-free survival, and response rate. ASCO chose these clinical endpoints because they represent data most commonly collected and reported in clinical trials. So, for example, when survival data is not available and/or only noncomparative trials have been preformed, as is often the case with breakthrough therapies, response rate will be used to determine the effectiveness of the drug until survival data becomes available.

The combined clinical benefit, toxicity, and bonus points make up the NHB score, which is then displayed next to (and, notably, separately from) cost. Here ASCO uses drug acquisition cost, and concedes that while this is not the most complete or meaningful measure, particularly for the patient, it was the most straightforward to quantify. Of course any methodology to truly determine value should include total cost of care, including estimated costs for diagnostics, surgery, imaging, hospitalization, and provider charges. Ultimately ASCO envisions including another figure, the cost to the patient, which will have to be individualized based on the patient’s specific health benefit design. ASCO also notes the goal is that the patient will also be able to modify the importance of both clinical benefit and/or toxicity based on his or her personal values and treatment goals.

As we know, defining value is not an easy task and ASCO recognizes several limitations to this model. The first is that the NHB calculation is only valid within the context of the clinical trial, which does not allow for intertrial comparisons. Additionally, this model does not include the patient’s perspective on value, excluding critical endpoints such as quality of life and patient-reported outcomes in the calculation of NHB. We also know that the relative value of a given treatment will likely change over its lifetime; how will this conceptual framework become a practical, dynamic tool that will repopulate data and update NHB scores over time?

From the physician’s perspective, many questions remain. How exactly will this tool be used in a clinical setting? When will this conversation happen at the point of care? Who will ultimately perform the analysis, input the patient’s cost-sharing data and preferences, and present the numbers to patients? Some physicians will use the tools themselves, while others will rely on nurses, administrators, or pharmacists to perform the analytics. While ASCO is clear the proposed framework is “not meant to substitute for physician judgment or patient preference,” in current form, it may leave the patient with more questions than answers. We encourage ASCO to develop a strategy to provide the appropriate guidance, support, and education to providers to assist them in explaining these values to patients in the next iteration of this framework.

ACCC recently submitted comments on ASCO’s value framework, and we look forward to continuing to engage with ASCO and others on the challenging issue of cost and quality in the cancer care delivery system.

Preparing Ourselves for a New Frontier

Posted in ACCC News, Across the Nation, Education by ACCCBuzz on August 27, 2015

By Steven L. D’Amato, BSPharm, BCOP, President, ACCC

The current pillars of cancer treatment incorporate radiation, surgery, and chemotherapy, with the goal of targeting the tumor and inducing complete or partial responses. Immuno-oncology (I-O) is a rapidly developing area of science and treatment that focuses on harnessing the ability of the patient’s own immune system to fight cancer. While great strides have been made in the fight against cancer, improved survival remains a challenge for some advanced malignancies. Surveillance, Epidemiology, and End Results (SEER) program data from 2014 show the five-year survival for lung, colorectal, kidney and renal pelvis, and melanoma to be 3.9, 12.5, 12.3 and 16 percent respectively. Specifically, malignant melanoma, renal cancer, and prostate cancer are potentially immunogenic, which makes them good candidates for immunotherapeutic approaches. Currently, more than 900 I-O clinical trials are in various phases of development.

A Long Road

The history of immunotherapy dates all the way back to 1796 when Edward Jenner used cowpox to induce immunity to smallpox. In 1890, Coley demonstrated that bacterial products (Coley toxins) had benefits for inoperable cancers, which led to the application of Bacillus Calmette-Guerin (BCG) in the 1960s. More than two decades later interferon-alpha was approved as hairy cell leukemia cancer immunotherapy, followed closely by interleukin-2 which was approved for the treatment of renal cell carcinoma and melanoma. Then came the birth of the monoclonal antibodies bevacizumab and cetuximab in 2004, followed by panitumumab in 2006. The first cellular immunotherapy (sipuleucel-T) was approved for prostate cancer in 2010. Ipilimumab (anti-CTLA-4) was approved for advanced melanoma in 2011. This year saw the first programmed cell death protein 1 (PD-1) monoclonal antibody inhibitors (nivolumab and pembrolizumab) approved.

These two new PD-1 inhibitors are currently indicated for the treatment of advanced melanoma (nivolumab, pembrolizumab) and squamous non-small cell lung cancer (nivolumab). These agents also have activity in a variety of other disease states and are currently being evaluated in numerous clinical trials. In addition to the development of anti-PD-1 agents, agents are being developed that target the PD-1 receptor and its ligands (PD-L1/2). I-O therapies have the potential to be used as monotherapy or as a part of combination regimens. Combinations of complementary I-O therapies with chemotherapy, radiotherapy, and targeted therapy have the potential to enhance antitumor effects. One can imagine the complexities of incorporating these new agents into the treatment of various diseases as more agents are developed and approved for use.

The anti-PD-1/PD-L1 agents are relatively well tolerated. However, there are many drug-related adverse events with potential immune-related causes, such as pneumonitis, vitiligo (a skin condition where skin loses its pigmentation), colitis, hepatitis, hypophysitis (inflammation of the pituitary gland due to autoimmunity), and thyroiditis. Because most tumor-associated antigens are also expressed in normal cells, the potential exists for toxicity against healthy tissues. Adverse events can be serious and potentially lethal, demanding vigilance throughout and after treatment. When combined with other forms of cancer treatment, I-O therapies can lead to numerous toxicities that must be identified early and managed appropriately. Another caveat with I-O is the monitoring of response with these new agents. Therapies that affect the immune system may not induce a measurable effect on tumor growth immediately. After initiating I-O therapy, immune activation and T-cell proliferation can start within days to weeks, but measurable antitumor effects may not be realized until weeks to months after initial treatment; the potential effects on survival may not be seen until several months after initial administration.

A New Frontier

This new frontier of medicine requires specialized education so that we can understand the immune system, its relationship to different tumor types, how these new agents interact with the immune system, and how to identify and manage immune-related events. To meet this critical need, ACCC formed the Institute for Clinical Immuno-Oncology (ICLIO), which launched in June 2015. ICLIO translates the latest I-O scientific research and findings for the multidisciplinary cancer care team, making the information accessible and—most importantly—breaking it into digestible action items that can be easily implemented in the community setting. ICLIO has brought the new frontier of immuno-oncology to your door. The next step is up to you. Visit accc-iclio.org today for information about clinical optimization, coverage and reimbursement, management best practices, patient access and advocacy, and training and development.

On Oct. 2, the ICLIO National Conference in Philadelphia, Pa., will bring together multi-disciplinary oncology team members to discuss the “how to’s” for putting immunotherapy into practice. I hope you’ll join me for this exceptional event.

Steven L. D’Amato, BSPharm, BCOP, is President of the Association of Community Cancer Centers, 2015-2016. He is Executive Director of New England Cancer Specialists.

Proposed 2016 Medicare Rules

Posted in ACCC News, Advocacy, In and Around Washington, DC by ACCCBuzz on July 20, 2015

Centers_for_Medicare_and_Medicaid_Services_logoBy Leah Ralph, Manager, Provider Economics and Public Policy, ACCC

The Centers for Medicare & Medicaid Services (CMS) 2016 proposed rules are out, and, not surprisingly, we continue to see the agency push outpatient payments toward more bundled services and move full steam ahead to tie Medicare payments at large to quality and value in the coming year.

2016 HOPPS Proposed Rule

Generally speaking, the proposed Hospital Outpatient Prospective Payment System (OPPS) rule includes few surprises, most notably CMS is proposing a -2% across-the-board reduction to compensate for “excessive” packaged payments for laboratory services in CY14. The rule also includes nine new comprehensive ambulatory payment classifications (C-APCs) to add to the 25 introduced last year and proposes consolidation and restructuring of nine APC clinical families. Importantly, CMS will continue to reimburse drugs at ASP+6% in the hospital outpatient department. The agency also provides some flexibility on the “two-midnight” rule. Currently the rule requires that a beneficiary to remain in the hospital for longer than two midnights in order for the stay to be reimbursed as an inpatient stay. Under the proposed rule, CMS would recognize some shorter stays as inpatient, and would evaluate on a “case-by-case” basis.

 2016 PFS Proposed Rule

The proposed Physician Fee Schedule (PFS) rule was released later than expected this year, perhaps due to slightly more contentious provisions. The good news – perhaps – is that, as proposed, the 2016 PFS would have no (0%) impact on Medicare payments in hematology/oncology. However, on the radiation oncology side the news is not so good. If all of the proposals in the rule are finalized, radiation oncology will face an estimated -3% cut and freestanding radiation therapy centers will see a -9% cut due to a combination of new code values and a change in assumption involving the overall use of linear accelerators. CMS also indicates how it will treat biosimilars for the purposes of Part B reimbursement, proposing to assign the same HCPCS code to all biosimilars that reference the same innovator drug. These would be paid based on their volume-weighted ASP+6% of the reference product’s ASP. If no ASP data is available, biosimilars would be reimbursed at 100% of their wholesale acquisition cost.

Under the PFS, CMS also proposes to create two new CPT codes for advanced care planning services, one to start the conversation with a patient and the other for continued discussion. The rule also begins the phasing out of the PQRS (the 2018 payment adjustment will be the last); adjustments for quality reporting will now be made under the new Merit-Based Incentive Program (MIPS), created by the legislation that repealed the Medicare Sustainable Growth Rate (SGR). CMS seeks comments on MIPS on issues like the definition of clinical practice improvement activities, how to define a physician-focused payment model, and more.

ACCC will be submitting comments on both rules, due August 31 and September 8, respectively. On Tuesday, July 21, 4:00-5:00 PM EST, ACCC is hosting a members-only conference call with a full rundown of both proposed rules. Stayed tuned.

 

King v. Burwell: Federal Health Insurance Subsidies Upheld for Patients

imagesBy Maureen Leddy, JD, Policy Coordinator, ACCC

On June 25, the Supreme Court issued their decision in the highly watched King v. Burwell case, ruling that the more than 6 million people currently purchasing insurance through a federal exchange can continue to access subsidies. At issue was the legality of federal subsidies for those in states that opted not to create a state health insurance exchange. Without these subsidies, the Court felt that the insurance markets would have essentially collapsed in the 34 states with federally run marketplaces, with the majority of those accessing subsidies unable to afford coverage when faced with full premium costs and, as a result, costs rising exponentially for those remaining in the market. Specifically, the court said: “[t]he combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral.”

A different decision in King would have likely created much disruption in the marketplace for both patients and providers. According to Kaiser Family Foundation, more than 6 million Americans might have lost subsidies, and faced an average premium increase of 287%. RAND estimated the number of insured Americans would have declined by 9.6 million. The healthy insured may have elected to discontinue coverage, leaving high-cost patients to constitute the majority of the insurance pool. Cancer patients might have been faced with paying unsubsidized and substantially increased premiums, which for some may have been unattainable.

Overturning subsidies would have also placed providers in the precarious position of caring for patients that became uninsured. The financial and ethical implications of treating newly uninsured patients are great. While providers may have chosen not to terminate patients undergoing a course of treatment regardless of a change in insurance status out of ethical obligation, the financial result would have been challenging, particularly for those community-based practices that lacked programs for low-income patients. For hospital-based providers, the financial implications would also have been great, undermining provisions in the Affordable Care Act that reduced Disproportionate Share Hospital (DSH) Medicare payments in exchange for a substantially reduced uninsured population. In short, without current federal subsidies in place, the mechanisms for providing and funding care for millions of Americans would have needed to be revisited. With a lack of agreement in Congress on the best approach to renewed healthcare reform, providers would have faced a great deal of uncertainty.

With a 6-3 decision, Justice Roberts’ Court concluded that “Congress passed the Affordable Care Act to improve health insurance markets, not destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Post updated 6/26/2015

HRSA Releases 340B Proposed Rule

Posted in ACCC News, Advocacy, In and Around Washington, DC by ACCCBuzz on June 22, 2015

Health Care ReformBy Maureen Leddy, JD, Policy Coordinator, ACCC

A proposed rule regarding 340B pricing enforcement was published in the Federal Register on June 17. The proposed rule responds to a mandate in the Affordable Care Act, which required the Health Resources and Services Administration (HRSA) to provide for imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge 340B-covered entities. The rule also provides a methodology for ceiling price calculation.

While not addressing more controversial aspects of the 340B program, such as patient definition, hospital eligibility criteria, and contract pharmacy arrangements, the rule does provide some important clarifications. Codification of the ceiling price calculation would provide 340B-covered entities with needed clarity in ensuring appropriate pricing. The rule would also impose a civil monetary penalty of up to $5,000 per instance of knowing and intentional overcharge of a covered entity, regardless of whether the order is placed with a manufacturer, wholesaler, authorized distributor or agent.

ACCC continues to closely watch for developments related to 340B, including expected release this summer of HRSA’s “mega-guidance,” anticipated to clarify several issues for which the agency does not believe it has rulemaking authority. HRSA has also indicated that it intends to release another rule on the administrative dispute resolution process in the near future. Stay tuned.

USP Chapter 800–Round Two

Posted in ACCC News, Advocacy, Cancer Care by ACCCBuzz on June 8, 2015

By Maureen Leddy, JD, Policy Coordinator, ACCC

question-markRecently, ACCC submitted comments on the U.S. Pharmacopeia (USP) draft Chapter <800>, proposed standards for handling hazardous drugs in healthcare settings. The comments are in response to USP’s latest draft of Chapter <800>.

As you likely recall, USP released a first draft of Chapter <800> in March 2014. In response to comments by ACCC and other stakeholder groups, USP issued a revised Chapter <800> draft in December 2014.

In responding to the initial draft, ACCC and other stakeholder groups expressed concern about the difficulties providers would face implementing the proposed Chapter <800> standards, in large part due to the financial investment they would require. Many, including ACCC, anticipated that if USP Chapter <800> was adopted as first drafted, some cancer facilities would no longer be able to offer compounding services to patients or might even close altogether.

ACCC is pleased that USP’s revised Chapter <800> draft provides more flexibility, but concerns remain. We continue to request additional pathways to comply with the new USP standards and to ask for more clarity on specific requirements. ACCC supports USP’s ultimate goal of ensuring healthcare worker safety; however, we believe that in several instances there are more cost-efficient protective measures that would provide more certain safety enhancements.

USP is a scientific nonprofit organization that sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed, and consumed worldwide. USP standards, such as Chapter <800>, are generally adopted by states and enforced by state Boards of Pharmacy or other regulatory entities. USP has indicated that the earliest likely effective date for Chapter <800> is August 2016; however, the many structural and procedural changes in the current draft would make compliance by that date a stretch for oncology programs.

The ACCC policy team is watching closely for a further revised or final draft of Chapter <800>; we will keep you posted.

Growing Momentum Around 340B

Posted in ACCC News, Advocacy, In and Around Washington, DC by ACCCBuzz on May 27, 2015

By Leah Ralph, Manager, Provider Economics & Public Policy, ACCC

Capitol-HillOnce again attention is focusing on the 340B Drug Pricing Program. With policymakers – and a variety of stakeholders – increasingly clamoring for more clarity and with some calling for more restrictions, HRSA has struggled with its authority to issue regulations on certain topics, including patient definition, hospital eligibility criteria, and contract pharmacy arrangements.

Last week, it looked like policymakers might address the issue legislatively, attempting to insert last-minute language into the House Energy and Commerce Committee-led effort, 21st Century Cures legislation, that would “overhaul” the program and include many of the issues HRSA has attempted to address in regulations and guidance. However, the Committee ran out of time to find consensus on the comprehensive 340B reform plan, and the language ultimately did not make it into HR 6, the bill that passed out of committee last week.

In keeping with the growing momentum, last week MedPAC also released a report on the 340B Program at the request of Congress. The report provides an overview of the program and evaluates the trend in program growth and spending since its inception. This report could be used to set the stage for future reforms.

Perhaps most important, following HRSA’s withdrawal of its “mega-rule” last fall due to a court ruling against the agency’s treatment of orphan drugs under the program, HRSA recently submitted “mega-guidance” to OMB for review. While language is not yet public, we expect the guidance to cover topics where HRSA does not believe it has the rule-making authority, including patient definition, hospital eligibility, contract pharmacy, and audits. While OMB typically has up to 90 days to review submissions, the agency is not required to take the whole period, and we may see guidance published as early as June.

ACCC continues to follow the 340B dialogue closely, and looks forward to seeing clear, comprehensive rules and definitions to ensure compliance and the long-term viability of the program. For more, see the ACCC position statement.

 

Federal Efforts to Advance Cancer Cures Development

By Maureen Leddy, JD, Policy Coordinator, ACCC

U.S. Capitol On May 21, the House Energy and Commerce Committee advanced its 21st Century Cures legislation, HR 6, by a unanimous vote of 51-0. The Committee has publicly pledged that HR 6 will be taken up on the House floor sometime in June, with the goal of final passage in the House by the end of the year. The Cures legislation represents a tremendous step toward advancing research in the field of oncology and healthcare, as well as improving the process for bringing new technologies into oncology programs nationwide. ACCC supports these efforts and continues to watch carefully. Read on for background and an analysis of key provisions in the current draft.

21st Century Cures: The Road to Passage

A year ago the House Energy and Commerce Committee, led by Chairman Upton (R-MI) and Representative DeGette (D-CO), issued a call to action on the 21st Century Cures initiative. The focus was to be the discovery, development, and delivery of life-saving drugs and devices to patients. Through a series of hearings and meetings with stakeholders and government officials, the Committee developed draft legislation, originally circulated in January 2015. The most recent draft incorporates the input of multiple stakeholders and represents a collaborative effort toward developing a better pathway to bring new therapies to patients.

Importantly, the prospects in the Senate, at least for 2015, remain uncertain. The Senate Health, Education, Labor and Pensions Committee (HELP) has been conducting a similar effort toward producing draft legislation focused on new drug and device development. The HELP Committee released a white paper in January 2015 that focused on barriers to development and delivery of new drugs and devices to patients, and examined potential solutions within FDA and NIH. On April 28, the Committee held a hearing, “Continuing America’s Leadership: The Future of Medical Innovation for Patients,” its third hearing on development and delivery of new treatments. While we are encouraged by these efforts, Chairman Lamar Alexander (R-TN) has indicated that the Senate may not develop its own legislative draft language until early 2016.

HR 6: Where Was Consensus Reached?

Despite uncertainty around the Senate’s parallel effort, HR 6 represents an extraordinary collaborative effort toward improving the pathway for disease treatment development. Exactly what did they agree to that will impact ACCC members and their patients?

  •  NIH Funding

ACCC was pleased to see provisions included that would significantly advance NIH biomedical research. Provisions supporting high-risk breakthrough research and facilitating clinical trial and health data sharing would spur the development and use of new cancer treatment technologies. The establishment of a 21st Century Cures Council, consisting of representatives from NIH, FDA, CMS, industry, insurers, patients, providers, as well as academic researchers, would allow for continued collaboration by this wide range of stakeholders. This council is tasked with setting a strategic agenda for cures development, identifying gaps in innovation and proposing recommendations, and identifying opportunities for collaboration in the U.S. and abroad.

  •  Drug Development Tools and Precision Medicine    

HR 6 follows President Obama’s January announcement of the research-focused Precision Medicine Initiative, clarifying terms and the development of precision drugs and biologics, and requiring guidance documents. The bill defines “biomarker” and requires establishment of a framework for development of biomarkers, including a taxonomy for biomarker classification. The FDA would be required to define “precision drug or biological product” as well as issue guidance on development of biomarkers to inform prescribing decisions. The legislation would also establish a pathway for accelerated drug approval through use of surrogate endpoints.

The field of oncology is witnessing a tremendous growth in the number of molecular biomarkers, as well as diagnostic tests. These improvements in classification of biomarkers as well as clear guidance on prescribing are key to the adoption of these new technologies in cancer care programs.

  •  Clinical Trials

The option to participate in clinical trials is critical to cancer patients that do not respond to standard treatments. HR 6 would advance federal clinical trial participation, requiring NIH to standardize patient inclusion and exclusion information. It would also require the creation of a scientific research sharing system for federally funded trials. 21st Century Cures would also promote clinical trials by eliminating regulatory duplication through harmonization of HHS and FDA Human Subject Regulations. The legislation modernizes provisions and streamlines the review process to account for trials conducted at multiple sites.

ACCC is pleased that consensus was reached on these and other key provisions regarding research and development of innovative cures. We will continue to monitor this legislation as it reaches the House floor, and watch the Senate for parallel legislation. Stay tuned.

 

Oncology Care Model: Updates from CMS

ThinkstockPhotos-469044147By Maureen Leddy, JD, Policy Coordinator, ACCC

As the clock ticks down to the May 7 deadline for CMMI Oncology Care Model (OCM) provider Letters of Intent (LOIs), some ACCC members may still be on the fence about submitting an LOI. CMS introduced the Oncology Care Model—the agency’s first specialty-specific alternative payment model—back in February. Those physician practices selected for OCM participation will begin receiving reimbursement for chemotherapy treatment episodes of care under the Oncology Care Model in spring 2016.

Since the introduction of the OCM, ACCC members have raised numerous questions as they weigh whether to apply for participation. In general, these questions have focused on three main issues: performance benchmarking methodology, payer collaboration, and the financial feasibility of achieving the practice transformation requirements. CMS has responded to some of these concerns, but we hope the agency will continue to provide clarity as the LOI submission period closes and our members prepare final applications for the June 18 deadline. Read on for a summary of CMS’s responses on these three key issues.

Performance Benchmarking Methodology

The initial Request for Applications (RFA) from CMS generated questions about the benchmarking methodology used to calculate a provider’s baseline or target price for specific episodes of care. Providers raised concerns about outliers with extremely high costs of care. CMS has responded that it will use Winsorization, resetting the outlying episode to a specific percentile within the provider’s total average care costs. Providers also raised concerns about how an already lean practice may benefit from OCM participation, where the benchmark for performance is based on the specific practice’s past performance. CMS has responded that the baseline period will likely be a three-year period beginning in 2012. The agency believes that this will help account for any very recent practice improvements. CMS has also indicated that the baseline for the entire five-year model will remain that same three-year period, ensuring practices that quickly adopt performance targets are not penalized in later years.

Payer Collaboration

In CMS’s applicant scoring methodology, participation with other payers (i.e., in addition to Medicare) will represent 30 points out of 100, a signal that the agency highly values the expansion of the OCM beyond Medicare. CMS has announced that 48 payers have submitted LOIs, and providers have raised concerns about whether to apply if no payer will be participating in their region. CMS has indicated that while it is an advantage for provider practices to partner with other payers, it is possible for a practice to be selected to participate in the OCM with only Medicare. There have also been indications that once the list of providers submitting LOIs is made public, there may be opportunity for payers to expand their participation regions.

Financial Feasibility

ACCC members have also raised concerns about whether the $160 per beneficiary per month fee is sufficient to achieve all of the practice transformations called for in the OCM. CMS has noted that other payers are expected to provide enhanced payments, which can also be used for the infrastructure changes called for in the OCM. For patients that do not fall within the OCM, practices may also continue to bill for chronic care management and transitional care management. CMS believes that this will provide sufficient revenue to support the required infrastructure changes. However, ACCC welcomes further feedback from members.

As we enter the post-SGR era, ACCC will be working to keep members informed on alternative payment model initiatives. We are pleased to hear that several members will apply to participate in the CMMI Oncology Care Model, and will continue to provide updates on this and other relevant alternative payment models as details become available.

Questions or comments on the OCM? Contact us at ocm@accc-cancer.org or visit our Oncology Care Model Resource Center.

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