70% of Practices to Owe Under Risk Tracks in Oncology Care Model
CMS will require many practices to assume downside risk under the Oncology Care Model in July, but most would owe in their first performance period, Avalere finds.
Source: Thinkstock
By - Seventy percent of practices in Medicare’s Oncology Care Model (OCM) would owe payments to CMS if they transition to the program’s two-sided financial risk tracks, a new Avalere analysis finds.
“Many practices that could be required to switch to two-sided risk will likely face recoupment payments to CMS in future performance periods,” says Biruk Bekele, a consultant at Avalere. “The decision to drop out of the OCM or switch to the new track will be decided on a practice-by-practice basis and will depend on many factors.”
Launched in 2016, the Oncology Care Model is a five-year bundled payment arrangement that tests whether real-time monthly payments for enhanced cancer services combined with usual Medicare fee-for-service payments will improve outcomes for cancer patients undergoing chemotherapy. Practices can also earn a retrospective performance-based payment based on quality and savings.
The model started as an upside-only bundled payment arrangement in which practices were not responsible for Medicare expenditures that exceed the target price. Currently, all practices are enrolled in the upside-only risk arrangement, Avalere reports.
But Medicare intends to transition practices to downside risk tracks in which practices would have to repay CMS for a portion of any spending over their benchmark.
Avelere explains that CMS will require OCM practices that have yet to achieve a performance-based payment in any of the first four performance periods to transition to a downside risk track by July 2019. Practices can make the switch or exit the program.
OCM practices that choose to stay in the program will have two option: the original track created at the start of the program and the recently announced alternative track.
The alternative track includes less downside financial risk compared to the original track. Under the alternative track, CMS established a neutral performance zone in which practices cannot earn or owe payments.
To determine how OCM practices will fare under new risk arrangements, Avalere examined Medicare Parts A and B fee-for-service claims and Part D prescription drug event data under a CMS research data agreement.
Through the analysis, the consulting firm identified 163 practices currently enrolled in the OCM and found that the majority of practices would face recoupment under downside risk.
However, the practices would fare better in the new alternative track, the report states. Only about one-half of the practices analyzed would owe payments under the alternative downside risk track.
Additionally, Avalere reports that a greater share of participants would earn performance-based payments under the alternative track because of the smaller discounts for spending targets. The alternative track has a 2.5 percent Medicare discount versus a 2.75 percent discount under the original track.
The findings spell trouble for OCM practices and Medicare, Avalere says.
Practices will have to weigh the decision. Is taking on downside risk worth the potential recoupment, especially if the majority of practices will owe Medicare?
Avalere states that practices will need to assess their ability to earn performance-based payments, their practice improvement costs, and the value of the program’s monthly enhanced oncology services payments.
Practices should also consider the Advanced Alternative Payment Model (APM) bonus under the Quality Payment Program. Downside risk tracks under the OCM qualify for the five percent bonus if practices elect to participate in the Advanced APM pathway.
For CMS, however, the findings spell even more trouble. CMS is actively pushing providers to take on downside risk. Providers in risk-based arrangements achieve greater care quality performance scores and reduce costs more compared to providers receiving fee-for-service payments.
Recently, CMS overhauled Medicare’s largest accountable care organization (ACO) program to push ACOs to take on downside financial risk. CMS Administrator Seema Verma said the Medicare Shared Savings Program’s shift would add accountability to the ACO program.
However, new research from Leavitt Partners shows that one-half of ACOs are considering leaving the program rather than take on downside financial risk sooner.
The OCM may face similar backlash if CMS requires practices to shift to downside risk tracks before they are ready, Avalere experts contend.
“Similar to the challenges that have faced the Medicare Shared Savings Program, CMS may need to further evaluate how quickly organizations can transition to taking on downside risk in the OCM,” Richard Kane, associate principal at Avalere, states in the analysis.
