2. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Moderator Marc Samuels, JD, MHA ADVI Panelists Michael Kolodziej, MD Aetna Kavita Patel, MD Brookings Institution Denise Pierce, DK Pierce & Associates Larry Strieff, MD Hill Physicians Robin Zon, MD Michiana Hematology Oncology; ASCO Clinical Practice Committee

3. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Moderator Marc Samuels, JD, MPH Chief Executive Officer, ADVI

4. What Do We Mean By Alternate Payment?
Something that replaces traditional fee-for-service (FFS)
That is designed to compensate for delivering a new value proposition: “value-based” rather than “volume-based”
Descriptions such as: patient-centered, coordinated, appropriate, efficient, accessible, consistent, high-quality, affordable
Monitoring, documenting and reporting on the value
Are the financial incentives aligned? Is there an assumption of financial risk?
Nothing focuses everyone’s attention like assuming financial risk together

5. Various Payment Reform Options – Oncology
Bundling/Aggregation Across Providers
Population-Based, System-Wide Capitation Payment
Episode/Bundle Payment Physician and Hospital Services
Oncology ACO
Episode/Bundle Payment for Physician Services
Shared Savings
Traditional FFS
Chemotherapy Fee Replacing Drug Mark-up
Pathways Compliance Fee
Medical Oncology Home Care Management fee
Case based physician payment
Adapted from: Model Progression by Case-Based Physician Payment and Bundling/Aggregation across Providers. Source: The Brookings Institution, 2013.

6. Key Features of Three Major Initiatives
CMMI-OCM
CAP Consortium
ASCO-CPOC
Aligned financial incentives to improve care coordination, outcomes, access, higher quality at lower cost (“triple aim”)
Re-align financial incentives to influence efficiencies, appropriate use (not under/not over use), quality consistency
Enable high-quality, patient centered care and more affordable cost; reduced administrative burden [on practice]
Patients undergoing chemotherapy, all cancers
Begin with high prevalence cancers (metastatic NSCLC, colon)
All cancers
Multi-payer
PBPM care management payment plus shared savings on total cost of care. Transition to 2-sided risk
Bundled payment for total cost of care (drug cost carved out)
5 types of bundled payments. Administrative efficiency: reduce from 58 CPTs to 11 service codes
“Practice Requirements” for monitoring, reporting
Standard set of quality measures – all payers
Value measures: pathways adherence, QOPI, ER frequency

7. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Kavita Patel, M.D., MS
Managing Director for Clinical Transformation & Delivery Engelberg Center for Health Care Reform Studies, Brookings Institution

8. Kavita K. Patel MD, MS Fellow and Managing Director Brookings Institution

9. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Michael Kolodziej, M.D.
National Medical Director Oncology Solutions, Aetna

10. Aetna Values & Oncology Solutions Mission Statement
Aetna Oncology Solutions – Mission Statement:
We give our members access to high-value, personalized cancer care models. We collaborate with oncology teams that deliver best-in-class care by using evidence-based medical guidelines, clinical decision support tools and services that improve the patient’s experience, increase effectiveness of care and lower costs. Our value-based approach, powered by data analytics and transparency of policy and payment, allows us to move from a fee-for-service platform to a value-driven system that rewards Oncology practices for quality care throughout the patient’s care journey.

11. Six realities that will shape reimbursement reform for commercial payers
Employers pay the bills
Profitability depends on private payers
Transparency will become mandatory
Innovation is expensive
Hospitals (in their current iteration) are immune to reform … and that must change
Cancer costs involve more than just the drug

12. Buchmueller et al.
Health Affairs 32:

13. Aggregate Hospital Payment-to-cost Ratios
Distribution of Hospital Cost by Payer Type (% of Total Cost) / 1990 / 2010
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2010

14. Aetna’s Oncology Solutions

15. Aetna’s Oncology Solutions

16. As community oncologists migrate to hospital systems, cost increases
172 clinics closed
323 practices struggling financially
44 practices sending ALL patients elsewhere for treatment
224 practices acquired by a hospital
102 practices merged/acquired
Source: COA Practice Impact Tracking Database

17. Cancer care is the leading edge of medical cost trend
Cancer is the most costly medical item and increasing at 2-3x the rate of other costs
1996
2010 0%
1000%
$55 B
$123 B
Cumulative percentage increase
Cancer care is the leading edge of medical cost trend
*2010 CY Claims; Commercial & Medicare; All Funding; Excludes AGB/SH/SRC

18. Historical payer responses: why we need a novel solution
Pay less
Manage more (prior auth)
Shift responsibility to member (co-pay, value based insurance, reference pricing)
Pay for performance (gain share)
Shift risk (ACO)

19. Oncology reimbursement reform MUST
Reduce cost
Improve quality
Both

20. Evidence based medicine
Enhanced access
Shared decision making
Coordination of care
Quality reporting
Payment reform

22. Quality reporting: clinical process measures
Adherence to evidence based treatment guidelines (including treatment exceeding lines of therapy and documentation of off-pathways reasons)
Cancer staging
Performance status
Pain assessment
End of life metrics (ACP documentation, hospice enrollment, hospice length of stay)
Patient satisfaction

23. Quality reporting: financial measures
ER visits (and costs)
Hospitalization rate (and costs)
Chemotherapy costs
NOTE: These measures form the basis for the shared savings calculation

25. ER and Hospital: Index PracticeIP
IP LOS
Breast (n=52) 29 24
3.7
Colon (n=14) 14 21 8
Lung (n=24) 18 31
5.4
Total 61 76
5.6
Chemotherapy costs N ME CP
Breast 52
28325
25307
Colon 14
28819
38616
Lung 24
19576
17892

26. Greater adherence to Pathways regimen
Fewer cancer-related in-patient hospital days
Fewer cancer related ER visits and in-patient admissions
Opening the Black Box: The Impact of an Oncology Management Program Consisting of Level I Pathways and an Outbound Nurse Call System, 2014, American Society of Clinical Oncology

27. Reimbursement Models Implementation fee Management fee
Enhanced fee schedule
S codes
Shared savings
Prior auth relief
Treatment plan
End of treatment summary
Advanced care plan
Oral chemotherapy management fee

28. Aetna Oncology Medical Home payment for oncology care means growth instead of shortfall
Current Fee for Service Model
Sustainable Future Performance
*Ultimately, this becomes a better “reset” baseline for episodes and/or bundles
Revenue Gap
(e.g., private payer and CMS induced)
Shared Savings on improvement from baseline outcomes
S-codes for quality processes that have meaning
Enhanced drug fee schedule
HIT Office workflow efficiencies
Future Base Model(s) Without Medical Home-like contracts
Invest in New processes
Changes in pre-cert model alter FTE’s
Our goal is to create a sustainable business model designed around new sources of value that will be resilient through and post health care reform.

30. So how does this apply to MCR?
MCR is the dominant payer for virtually every oncology practice
Cancer is far more common in the MCR population
Cancer is more expensive in the MCR population
MCR cancer patients are different in many ways
In general, MCR doesn’t pay very well
MCR rewards volume not quality
SO MCR needs to change

31. So what about the CMMI proposal ?
Rewards practices for enhanced clinical services and performance
Determining management fee is problematic
Gain share methodology unclear
Too directive
Too many data elements to report
Will be most successful if commercial payers participate
BUT it is generally consistent with our view of reimbursement reform (so we are exploring ways to partner with CMMI)

32. Oncology reimbursement reform is a step-wise process
Vendor based programs introduce Clinical Pathways and Measure Adherence along with Quality Measures
More sophisticated Practices move from vendor based Clinical Pathways programs to Oncology Medical Homes (OMH)
Vendor Oncology Programs
Oncology Medical Homes
Bundles/ Episode Payments
OMH, ACOs, Bundles
Smaller Practices work with Education Oncology programs such as NJ ION program
Create episode and bundling methodology test with OMH, as well as deployed in ACO
OMH deployed in 65% of markets and ACOs by 4Q15
Provider engagement Index
Low Touch
High Touch
Some Clinical
Engagement
More Clinical
Engagement
High Clinical Engagement

34. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Robin Zon, M.D., FACP, FASCO
Michiana Hematology Oncology,
Chair ASCO Clinical Practice Committee

35. Consolidated Payments for Oncology Care
Payment Reform to Support
Patient-Centered Care for Cancer
ASCO’s Clinical Practice Committee Payment Reform Work Group
(JOP Jul 1, 2014: ; published online on April 15, 2014)

36. Goals of CPOC Payment structure Simpler billing structure
Patient centered
Better match to services we provide/patients need
Simpler billing structure
More predictable revenue stream
Incentivize high quality, high-value care
Support coordinated, patient-centered care

37. Components of CPOC The Quality Oncology Practice Initiative
A Chemotherapy Management Fee
Value Based Pathways
Monthly Episodes of Care/Bundled Payments
Care coordination/ Patient – centered Medical Oncology Home

38. Monthly Payments Based on Phases of Care
New Patient
Treatment Month
Monitoring Month
Transition of Treatment

39. New Patient Payment Single payment
Includes patient evaluation, treatment planning, patient education
Diagnostic testing paid separately

40. Treatment Month Payment
Single payment each month patient receives treatment (IV or oral therapy)
May receive both a treatment month payment and a new patient payment in the same month
Higher monthly payments for sicker patients and those receiving more toxic and complex regimens

41. Monitoring Month Payment
For patients not receiving active anti-cancer therapy (e.g. treatment holiday or completion)
3 levels of payment
Higher for months immediately following end of treatment
Lower for patients on long-term monitoring

42. Transition of Treatment Payment
Patient beginning new line of therapy or ending treatment with no further treatment planned
Reflects time involved in treatment planning and patient education

43. Continued FFS Payments
Laboratory tests
Bone marrow biopsies
Portable pumps
Blood transfusions
(list not all inclusive)

44. Additional Payment Adjustments
Quality measures phased in over time
Pathways, two stages:
Adherence
Use of certified pathways
Resource utilization
OMH
ER and hospital admissions
Clinical Trials
Higher Treatment Month and Non-Treatment Month payments for enrolled patients

45. Multi-Year Transition Design
Net revenue to practice > existing system
Total spending by payer < existing system
Payer and practice negotiate acceptable risk corridors during transition
Practices protected against losses in initial years
Payers and practices share in savings achieved
Practices take on greater accountability as care processes redesigned

46. ASCO’s Efforts to Lower Costs, Increase Value
Promoting Adherence to Evidence-Based Medicine: ASCO Guidelines
Participating in & Promoting “Choosing Wisely”
Commitment to Quality Improvement: QOPI
Working with Payers: Integration of Quality Measures into Reimbursement Decision-Making
Cultivating a Learning Healthcare System: CancerLinQ
Establishing Clinically Meaningful Outcomes in Cancer Research
Payment Reform
The Value in Cancer Care Task Force

47. CMMI vs. CPOC: Some Observations
CMMI: OCM
ASCO: CPOC
Fee for service—current narrow categories Reimbursement still driven by physician encounter Add on payment only for new services Accountability for ALL healthcare services Arbitrary 6-month episodes Payment differentiated only by type of cancer
Flexible payments can reimburse currently unfunded services Patient centered reimbursement, agnostic to type of provider Monthly payment replaces current fees Focuses accountability on services controlled by oncologists Monthly payment based on phase of treatment and care Payment differentiated by patient complexity and treatment toxicity

48. DISCUSSION

49. The Future of Oncology Reimbursement: Alternate Payment Initiatives
Larry Strieff, M.D.
Specialty Medical Director
Hematology Oncology Division Chief
Hill Physicians Medical Group

50. Oncology Case Rate (OCR) Payment Reform Example
Neutral title to encourage discussion
Larry Strieff, MD, Specialty Medical Director,
Hematology Oncology Division Chief
Clinical Support, Hill Physicians Medical Group

51. Hill Physicians Medical Group
Independent Physician Association founded in 1984
Provider network: 3,800 providers and consultants
980 Primary Care
2,260 Specialists (170 Oncologists)
Service the Northern California area
300,000 Members
5 Regions - 9 Counties

52. Methodologies Evaluated
Mutually Sustainable
FFS
Drop to MC Rates
Aligned Incentives
*Cost
*Quality
*Patient Experience
Flat Cap Rate
FFS & Cap
Cohort Case Rate

53. Chronological Cost Pattern for Breast Cancer

54. Oncology Case Rate (OCR) Bundled Payment System
Episode of Care Reimbursement
Cancer Cohorts by Diagnosis
Budget Set Aside for Stop Loss
Removal of Prior Authorization
Quality Management Program
Monthly episodic payment for all oncology-related services
Cost variation across different cancer types
Ensure fair allocation of risk
Reduce barriers to enable evidence-based cost-effective care
1. ASCO QOPI Measures
2. Utilization Measures
3. Satisfaction Measures
Clinical Quality Domain - ~30 QOPI ASCO Clinical Measures, Subject to Hill review/audit
Satisfaction Domain - Referring Provider Satisfaction Surveys, Patient Satisfaction Surveys
Utilization Domain - Bed Days, Infusion Center Use, Chemotherapy Initiation, ED Visits (2014)
Based on actual 3 year experience of Hill’s patient cohort
Nine separate cohorts, divided by cancer types
4 different case rates within each, based on intensity over time
Model adjusts total dollars to new expenses priced at current rates
$$ set aside for stop loss
$$ set aside for quality performance bonus

55. OCR Cancer Cohorts: Diagnosis Group by Cancer Type
Total Unique Patients, YTD 1
Colon & Rectum
116 2
Lung
136 3
Breast (female)
287 4
Ovary and other Uterine Adnexa 23 5
Prostate 41 6
Malignant Neoplasm of Other/Unspecified Sites 50 7
Malignant Neoplasm of Lymp/Hema Tissue
169 8
Other Malignant Neoplasm
158 9
Diseases of Blood & Blood-Forming Origin 27
Total Unique Patients
1,007

56. Trends in Oncology PMPM Network vs. Sacramento OCR

57. Quality Management Bonus Program
Program encompasses 3 domains
Clinical measures are subject to audit and chart reviews
Performance dashboards are shared with oncology groups regularly
Clinical Quality Domain
~30 QOPI ASCO Clinical Measures
Subject to Hill review/audit
Satisfaction Domain
Referring Provider Satisfaction Surveys
Patient Satisfaction Surveys
Utilization Domain
Inpatient Bed Days
Infusion Center Use
Chemotherapy Initiation
ED Visits (2014)

58. Clinical Quality of Care
OCR Performance
ASCO = American Society of Clinical Oncology

60. Utilization Measure
Inpatient Bed Days

61. Overall Survival Results
All 4 Cancer Cohorts (N=274)
{Esophageal, Pancreas, Lung, Stomach}
OCR (N=128) vs. Control (N=146)
p = 0.05
Survival Probability
Survival Time (days)
Day 0 = first day of chemotherapy

62. Summary
OCR practices demonstrated year-over-year improvements in performance on ASCO clinical quality measures.
OCR practices out-performed standard FFS model in satisfaction and utilization metrics year-over- year.
OCR practices’ overall survival is non-inferior to the overall survival under a standard FFS model.
OCR practices continue to bend the cost curve over 3.5 years of program experience.

63. The Future of Oncology Reimbursement: Alternate Payment Methodologies – Employer Perspectives
Denise K. Pierce President/CEO DK Pierce & Associates, Inc.

64. An Employer’s View on Cancer Costs
Employees with cancer result in more than 33 million disability days per year.1
Of the 12 million Americans with cancer today, an estimated 3 million are actively employed.2
Specialty oncology drugs currently account for approximately 17% of the average employer’s total pharmacy spend and are estimated to rise to 40% by
Since employer’s cancer medical expenses are increasing faster than general medical costs, there is no waiting for payment reform – employers are increasingly taking direct action to manage cancer costs now
The cost of cancer care is becoming more a focus with employers because of the impact on health benefit medical expense, word productivity, and short- and long-term disability costs
Sources:
“Cancer Costs Billions Yearly in U.S.” US News and World Report. December
Miller, S. “Employers Focus on Cancer Prevention and Care.” Society for Human Resource Management. November 2013
Herr, J. “Employers Becoming More Savvy About Specialty Pharmacy, but Need More Cost Controls.” Midwest Business Group on Health. February 2013.

65. Employer Approaches to Managing Cancer Costs
There is a wide variation in approaches, based on company industry, size, and employee demographics
Employer Initiatives
Claims data warehousing/analysis
Overall cancer costs/targeting
“per employee” costs for benefit forecasting
Specialty pharmacy benefit
Case managing the “right treatment for the right patient”
Integrating adherence measures
Nurse navigators
Care coordination beyond the practice doors
Drug/treatment adherence
Value-based payment design
Oncology pathway integration
Natural narrower networks based on participation
Oncology medical homes
Learning from current primary care models
Solid tumor mapping
Individualized treatment decision support
Source: DK Pierce & Associates, Inc. DKP Critical Insights®: Employer Cancer Management Evolution Analysis 2014.

66. Employer Example – Centers of Excellence
Shell Oil Cancer Center of Excellence (COE)
Voluntary program contracted through MD Anderson
Applies to active employees and non-Medicare pension retirees
Registered employees and adult dependents would have prevention and treatment with no deductibles, no coinsurance
Services directed to MD Anderson main campus
MD Anderson Physician Network Case Manager
Voluntary Program Registration
Employee
Prevention screening
Adult cancer treatment
Employees with pre-existing cancer conditions will be managed through the ASO United Healthcare network, with applicable deductible and cost share

67. Business Coalition Roles in Managing Cancer Costs
Once serving only as leverage for insurance purchasing, business coalitions now take on key roles to guide benefit design
Business Coalition Initiatives
Cancer benefit guidance
National Business Group on Health (NBGH) Cancer Benefits Resource Guide program resources
National Business Coalition on Health (NBCH) Action Briefs
Specialty pharmacy model contracts
Setting of care analysis
Claims data evaluation support
NBCH has a membership of 55 coalitions across the United States representing over 4,000 employers and approximately 35 million employees and their dependents. These business coalitions are composed of mostly mid- and large-sized employers in both the private and public sectors in a particular city, county, or region. NBCH member coalitions are committed to community health reform, including an improvement in the value of health care provided through employer-sponsored health plans and to the entire community.
Sources:
DK Pierce & Associates, Inc. DKP Critical Insights®: Employer Cancer Management Evolution Analysis 2014.
National Business Group on Health An Employer Guide to Cancer Treatment and Prevention. Tool 2- Plan Design and Assessment
National Business Coalition on Health.

68. Business Coalition Roles in Managing Cancer Costs
Sources:
National Business Coalition on Health. NBCH Action Brief. Breast Cancer – Take Action.
National Business Group on Health An Employer Guide to Cancer Treatment and Prevention. Cancer Continuum of Care.
Midwest Business Group on Health. National Employer Initiative on Specialty Pharmacy.

69. Business Coalition Roles in Managing Cancer Costs
NBGH COE criteria are supplied in the Employer’s Guide to Cancer Treatment & Prevention
National Business Group on Health An Employer Guide to Cancer Treatment and Prevention. Centers of Excellence Network Programs.

70. Denise K Pierce President/CEO DK Pierce & Associates, Inc
Denise K Pierce President/CEO DK Pierce & Associates, Inc ext. 205