Azar says new mandatory oncology pay model is coming

By Virgil Dickson  | November 8, 2018

The CMS plans to unveil a mandatory Medicare payment model for cancer patients, and two new voluntary models for cardiac care in the coming weeks, said HHS Secretary Alex Azar. That means the Trump administration is reversing course from its prior stance that all payment models which put providers at risk of losing money if they don’t lower costs of care should be voluntary.

“Real experimentation with episodic bundles requires a willingness to try mandatory models,” Azar said at the Patient-Centered Primary Care Collaborative Conference on Thursday. “We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback.”

The new mandatory model will focus on radiation oncology, Azar said, but offered no other details.

HHS first revealed the need for a radiation oncology model in a report to Congress last year. In that document it said that Medicare Part B payments for radiation treatment increased 216% between 2000 to 2010 due to the use of more expensive treatments and a rise in the number of cancer patients.

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Demand for radiation therapy may increase 38% for seniors ages 65 and older from 282,000 in 2010 to 388,000 in 2020, according to the report.

Azar’s remarks follow the unveiling of the administration’s first mandatory model last week. That arrangement seeks to lower spending on drugs administered in doctor offices and hospitals.

The two in the works cardiac models build upon ones canceled by the Trump administration last year.

The CMS previously has acknowledged that some hospitals wanted the models to continue on a voluntary basis, as they had already invested resources to launch them. On average, hospitals have five full-time employees, including clinical staff, tracking and reporting quality measures under value-based models, according to the AHA. They are also spending approximately $709,000 annually on the administrative aspects of quality reporting.

Earlier this year, the CMS reported that a mandatory payment model targeting joint replacement surgeries dropped spending on average by 3.9% or $1,127 compared with hospitals not participating in the model. At the same time, researchers observed no statistically significant changes in the quality of care as measured by readmission rates, emergency department visits, and deaths.