Value-Based Care and Alternative Payment Models: The Current State

April 2021 Vol 12, No 4

As oncology care shifts away from fee-for-service and toward value-based care, understanding alternative payment models (APMs) is crucial for navigators. But comprehending the complexities of these different models, as well as successfully transforming a practice from a fee-for-service into a value-based model, is a bit more complicated than it sounds, according to Rani Khetarpal, MBA, vice president, Provider Innovations at New Century Health.

“The hope for alternative payment models was a perfect alignment between the provider and the payer that ultimately benefits the patient in terms of their care delivery and their overall journey,” she said at the AONN+ 11th Annual Navigation & Survivorship Conference. “As much as we would love to have this, the reality is it’s very confusing and very complex. There are a lot of hands in the cookie jar, and it’s absolutely not straightforward.”

Although the ultimate goal is still to provide better care delivery for patients, things get convoluted along the way, resulting in frustration, anxiety, unknowns, and “a lot of darts being thrown at a dartboard blindfolded, hoping they stick,” she added.

However, the good news is that lessons have been learned along the way, and the components that drive value-based care in oncology are becoming more clear.

The State of the Nation

As APMs become more quality-driven, the financial risk to the provider also increases. “That’s really important to understand with these models: risk doesn’t necessarily increase for the patient or the payer, but it does increase for the provider,” Ms Khetarpal said. “At the highest echelon, these risk models do drive quality for patients, but the provider absolutely has to be ready to take on that risk. And quite frankly, there’s not a whole lot of those providers around right now, and rightfully so.”

From an operational standpoint, providers are still trying to figure out how to support these higher-risk models, she added.

Currently, 35 distinct oncology payment reform models are underway or planned in 37 states across the country. Seven models operate in more than 1 state, and 4 are national: the Center for Medicare & Medicaid Innovation (CMMI) Oncology Care Model (OCM), Aetna, Cigna, and Humana. A total of 138 practices in 29 states are participating in the CMMI OCM.

“What that means is we have 35 different APMs that are currently underway,” she noted. “I think that shows that we just don’t know which APM model is the right model moving forward, and I don’t think there’s a one-size-fits-all answer either.”

She added that the OCM is being used as a foundation for building other APMs that look at total cost of care (all types of service; all diagnoses; no exceptions). “Even if you’re not participating in the OCM, we are going to see components of the OCM being carried forward as a benchmark for other APMs,” she said.

Eighteen payment reform models offer shared savings and/or include a management fee. “That means they’re splitting the savings with the provider,” she said. One or more of these features are consistent in over half of the reform models.

Across the board, clinical standards and measures are extremely important, particularly in terms of performance reporting and evaluation, as well as emergency department and inpatient admissions reporting. However, adding to the complexity of APMs in oncology are differing payment methodologies.

“If you’re participating in more than 1 model, and you have a different methodology in calculating how you’re going to be financially successful in each model, then the practice transformation activities that you need to put in place are going to differ per model as well,” Ms Khetarpal explained. “That can get very confusing and complex for the cancer center, as well as for staff.”

Employers are now becoming much more active in APMs: 4 of the 35 models are now employer-based.

Traditionally, payment reform models have been payer-based, but employer-driven models have doubled since 2019.

“Employer-driven models take a long time to develop, and each and every one of them is unique,” she said. “So having 2 more this year and potentially 3 or 4 more next year is actually pretty big.”

The Oncology Care Model as a Benchmark

The intent of the OCM is to drive up quality and lower cost by shifting from fee-for-service to value-based care. This is centered around improving communication between providers and patients, recognizing depression and distress in patients with cancer, transforming care, addressing financial toxicity, and improving care coordination, symptom management, palliative care, and end-of-life care.

Within the OCM model, providers can still bill standard fee-for-service payments for all services rendered. They also receive a $160 per member per month enhanced oncology services payment. “The intent there was to help fund the practice transformation and any additional resources required for the program,” she said.

If a practice is successful and achieves savings, they will receive a performance-based payment, the amount of which is based on a combined quality score: a score greater than 30% is eligible for a performance-based payment, whereas any score below 30% results in no payment. Quality scores are based on the fulfillment of 12 quality metrics under the 4 domains of communication and care coordination, person- and caregiver-centered experience and outcomes, clinical quality of care, and patient safety. The latter 3 are self-reported measures, but the communication and care coordination score are based on claims data.

What Makes a Successful APM?

Three performance drivers impact the success of an APM: drugs, emergency department/inpatient, and end of life. These 3 categories make up about 80% of spending, but according to Ms Khetarpal, certain actions can be taken to mitigate some of these costs. These actions include using less expensive regimens that do not compromise quality, using targeted interventions, having a formalized and consistent patient triage process, and improving end-of-life transitions and advance care planning by educating patients on palliative care and hospice.

Five main components are required to successfully transform a practice to a value-based care model. “This is where navigators really have an impact,” she said. First is gathering data (ie, identifying meaningful data sources, making sure support exists from an IT and infrastructure standpoint, and developing consistent data reporting).

After data are gathered, they must become actionable through data analysis (ie, putting benchmarks in place, prioritizing opportunities for performance improvement, and focusing on program developments to achieve quality metrics). The final 3 components of a successful shift to value-based care include care transformation (ie, communicating expectations and metrics to the care delivery team, focusing on patient engagement strategies), finances (ie, being able to measure quality of care activities as they relate to the overall cost of care delivery), and finally, performance analysis (making sure what you’re doing is actually working).

“There’s an element to data that’s not necessarily technology-driven, and that’s gained from conversations with patients,” she said. “Navigators are already working with these high-risk patients; if you can couple your knowledge of your patients with actual data and real-time risk stratification, being able to combine that clinical and personal knowledge, that’s a beautiful thing.”

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Last modified: July 8, 2021

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