Decision Time Is Approaching for Practices in the Oncology Care Model

Since July 2016, more than 170 oncology practices across the United States have been participating in the Oncology Care Model (OCM), the Center for Medicare & Medicaid Innovation (CMMI)’s 5-year pilot program designed to deliver higher quality, more coordinated oncology care at the same or lower cost. When practices elected to participate in the OCM, they knew they would eventually have to decide whether to accept 2-sided risk or leave the ­program if a performance-based payment (PBP) was not achieved.1

Currently, the OCM is a 1-sided risk model. If a practice achieves a PBP by the end of Performance Period 4 (results available August 2019), it has the option to remain in the 1-sided risk model. However, if it does not earn a PBP by August 2019, it must accept 2-sided risk or exit the program. Based on recent results shared at the 2019 American Society of Clinical Oncology Annual Meeting, the CMMI team estimates that approximately 50% of the practices participating in the OCM may need to make a 2-sided risk decision in the near future. There are many factors that practices should consider when deciding how they will move forward with the OCM, and now is the time to begin thinking about this critical decision that has significant ramifications for the future.

A Closer Look at 2-Sided Risk

Last fall, OCM administrators presented an alternative 2-sided risk model that is less onerous than the original version, which had a big upside for practices if they performed well but carried a huge stop-loss if they did not achieve performance goals. The original performance ceiling was 20% of total cost, which was also the percentage of downside risk.1

Administrators were concerned that some practices would have issues providing care if performance goals were not met and they had to return a large amount of money. Consequently, CMMI developed the alternative model that caps the downside at 8% of practice Medicare revenue and external Part B chemotherapy drug revenue, while keeping the upside slightly less than the original model.1 This is a vast improvement over the original version.

Another significant benefit of the new model is that it provides a neutral performance zone where practices neither achieve nor owe additional payments. This is essentially a safety zone for practices that are saving Medicare money but have not yet done well enough to earn a PBP. For some practices, staying neutral is more attractive than dealing with the possibility of returning dollars, so many may choose this new alternative 2-sided risk option.

Smaller Practices May Opt for 1-Sided Risk

Smaller practices face unique challenges when deciding how to move forward with the OCM. Some did well in the beginning and earned a PBP but are now experiencing volatility that could affect their ability to earn shared savings. Smaller practices have fewer patients than larger practices, so even if they have a small pocket of patients with higher treatment costs in a 6-month performance period, it could have a very negative impact on their performance. Some smaller practices in The US Oncology Network (The Network) that have achieved a PBP and maintain it through August 2019, will most likely stay 1-sided because of the unpredictability of their patient base.

Mine OCM Data for Actionable Insight

Practices participating in the OCM have a wealth of data at their fingertips provided by CMMI and captured to meet program requirements. Analyzing these data for quality results and cost trends over time can help them decide how to proceed with the OCM, as well as identify areas for improvement.

The Network practices that are most confident about continuing with the OCM have consistently done well on their quality scores, and many have seen them rise for each reporting period, increasing their PBPs. Their cost trends have also improved period over period with little volatility. Fortunately, once a practice starts getting a PBP, if it maintains that performance, it will continue to get a PBP judged against its established baseline and trend factors in the CMMI model.

Many practices that are dealing with volatility are still looking for a path to success. Before they make a decision about exiting the OCM, they should analyze their data to see whether there are still ways to improve that could significantly affect their performance and costs.

Practices can also judge how they are doing by looking at the quarterly reports from CMMI that identify OCM trends for participating practices. This can help them see how their costs are trending compared with other practices, as well as identify where there are still opportunities and where cost-savings have topped out.

Since the cost component of the OCM is critical, practices should pay close attention to their cost data, while improving quality, and partner with analytics experts, such as those on The Network’s program outcomes and analytics (POA) team to know where opportunities exist. The Network is holding total cost workshops with actionable analytics from the POA team to help practices identify improvement opportunities. Practice data in areas, such as hospitalizations, emergency department visits, drug utilization, and advance care planning, are examined closely to pinpoint areas for improvement while ensuring high-quality patient experiences and care.

Preparing for 2-Sided Risk

Practices that are considering a transition to 2-sided risk can focus on a few activities now to help gauge their level of potential success and risk.

Estimate Performance in the Alternative 2-Sided Risk Model

Practices can determine whether they would have been required to pay back money, received a PBP, or landed in the neutral zone. They can also examine how they are trending over time through Performance Period 3 to ensure the trend is holding.

Plan for Downside Risk

Practices need to understand what the maximum stop-loss would be to determine what a worst-case payback would entail. Those concerned about paying back dollars should identify ways to minimize the financial impact should that happen. One approach is to self-insure against the downside. Residual funds from the monthly enhanced oncology services payments could be used to supplement if necessary. Practices that achieve an advanced alternative payment model (APM) bonus of plus 5% of their Medicare allowable could also use these funds to self-insure.2

Some practices are seeking catastrophic coverage from an insurance company to shield against downside risk. The Network is working on this option with several practices. Unfortunately, not many insurers are offering this coverage, and for those that do, the premiums are high initially because of the uncertainty involved.

Ensure the Culture Supports OCM Goals

Practices should continue to look for ways to provide the best quality of care at a sustainable cost. They should examine drug initiatives, enhanced services, emergency department utilization, hospitalizations, advance care planning, and other activities that substantially affect cost and the patient experience. They should ensure that providers and staff are heading in the same direction and looking for ways to continue improving. It is also important to identify outliers and make a plan to deal with them.

Practices should identify future opportunities to maintain high performance on quality outcomes and costs, ensuring that patients and care teams continue to see the value in the program.

Exiting the OCM

Practices should decide by October 3, 2019, if they are planning to exit the OCM or select 2-sided risk, if required. Since the program is an APM, practices leaving still have APM status for the remainder of this year, and they must continue to submit all required OCM data and documentation.

Once practices leave the program in January 2020, they will be fully participating in the Merit-Based Incentive Payment System (MIPS), another Medicare program that covers all specialties, not just oncology. MIPS is a 2-sided risk program, but the upside and the downside are lower than the 2-sided OCM. Essentially, practices transitioning to MIPS are not abandoning value-based care, they are just switching to a broader program. They still need to focus on quality measures, improvement activities, and cost.

One of the concerns about MIPS is that it is not oncology-specific. Oncology patients tend to be sicker and costlier to treat than patients in other specialties so there is apprehension about how MIPS will evaluate oncology.

What Does the Future Hold?

The big question facing practices staying in the OCM is what happens after 2020 when the program ends. Will it remain as it is today, or will it change to a bundled payment system or a completely different model?

The OCM offers many benefits to stakeholders compared with previous programs. It puts the ownership for quality of care, cost of care, and the patient experience in the hands of providers at the point of care. It offers funding to deliver enhanced services and access to care, creating a holistic approach to care that drives improved outcomes and patient satisfaction. The program is a significant step forward in cancer care and in achieving Medicare’s goals of improving care at a sustainable cost. My hope is that it will continue long into the future, and if it does change that it does not lose sight of patient experience and quality outcomes.


  1. Centers for Medicare & Medicaid Services Center for Medicare & Medicaid Innovation. OCM performance-based payment methodology. Version 5.1. December 17, 2018. Accessed June 18, 2019.
  2. Department of Health & Human Services Quality Payment Program. Advanced alternative payment models (APMS). Accessed June 18, 2019.

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