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CMMI’s Oncology Care Model (OCM) – Is it Right for Your Organization?

Yesterday, February 12, 2015, the Center for Medicare and Medicaid Innovation (CMMI) announced the long anticipated launch of its newest payment and services delivery model, the Oncology Care Model (OCM). OCM is a 5-year initiative intended to create incentives to furnish efficient, high quality care by enhancing services for Medicare fee-for-service (FFS) beneficiaries undergoing chemotherapy treatment for cancer diagnosis, while at the same time, lowering the overall costs of care for those same beneficiaries. OCM covers virtually all cancer types. The application deadline for participation in OCM is June 18, 2015 with an anticipated actual commencement of OCM in spring 2016.

Qualified OCM applicants will be “physician group practices and practitioners in solo practice (collectively “practices”) that provide care for oncology patients undergoing chemotherapy for cancer.” The definition of a qualified participant is important. In CMMI’s original August 2014 release of its concept piece for OCM, “Preliminary design for an oncology-focused model,” CMMI proposed that OCM participants would be “physician practices that furnish chemotherapy treatment.” Subsequently CMMI was advised that, taken literally, this definition would exclude some 40% to 50% of all practicing oncologists nationally, those providing cancer services as employees of or in collaborative contractual relationships with hospitals/health systems or academic medical centers. Recognizing that oncologists working with/for institutions should not be excluded from OCM participation, the revised definition of participant deletes reference to “furnish” chemotherapy, thus opening OCM enrollment to oncologists (“practices”) that provide cancer care services as employees of or in collaboration with institutions. We believe that an OCM undertaking by such organizations will be the foundation for evaluating true cost of care (rather than solely claims history) and enable providers to prepare for fixed pricing across the full continuum of cancer care (bundled pricing, case rates, for example).

Other key features of OCM include: 

  1. Participating practices must meet certain requirements, such as incorporating care coordination, 24-hour access to practitioners who can consult the patient’s medical record in real time, issue comprehensive patient care plans, provide patient navigators and demonstrate continuous quality improvement – essentially the principals of the oncology medical home model;
  2. Participating practices will receive two types of payment (in addition to routine FFS claims): (i) a $160 per beneficiary per month (PBPM) care management fee for FFS Medicare beneficiaries during the 6-month period commencing with the initial chemotherapy treatment plus (ii) a performance-based payment based on demonstration of quality improvement and overall cost of care. OCM will apply a retrospective pricing model to determine the baseline from which cost reduction will be calculated.
  3. CMMI expects OCM to be a multi-payer model with other payers, particularly commercial health insurers, working in tandem with Medicare to promote care process re-design and cost reduction across all patient populations.

Is OCM right for your organization? Oncology providers are cautioned to first consider whether OCM is appropriate for their organization before applying. Is the organization ready to undertake the process re-designs and cultural change inherent in OCM? Are the financial implications of OCM positive for your organization? What are the ramifications to your organization of not participating in OCM?

For more on OCM strategy, evaluation and application design contact the author, Ronald Barkley, MS, JD, President, Cancer Center Business Development Group at or 603-472-2285.

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