Oncology Care Model is a "debacle," says healthcare policy expert

The value-based model hasn't produced cost savings and is not likely "to make the cut" to become permanent, says Kavita Patel, a former top healthcare official in the Obama administration.

The Oncology Care Model has had no effect on costs and is not likely “to make the cut” to become permanent in the new administration, said Kavita Patel.

Finding ways to expand Medicaid and solving the “Goldilocks” problem of identifying the just-right level of telehealth will be among the healthcare problems the Biden administration will tackle, according to Kavita Patel.

But for the community oncologists listening to her remarks today, Patel’s damning assessment of the Oncology Care Model (OCM) may be the most salient part of her rapid-fire survey of the new administration’s healthcare policies.

“The data and evaluation (of OCM) to date has been pretty disappointing in showing that, despite helping with care coordination efforts, there has been no effect on costs,” said Patel during her keynote address to the Association of Community Cancer Centers 47th Annual Meeting and Cancer Center Business Summit.

Patel mentioned the “flaws in the mechanism of these models,” problems with risk adjustment, and the complexities of cancer care. She continued, “How you put that into a value-based model that CMS can administer is nothing short of, like, a debacle.”

Patel, a top healthcare official in the Obama administration, is a nonresident fellow of the Brookings Institution and an expert on Washington healthcare policy and political machinations.

Patel said she did not think the OCM will “make the cut” to become permanent and that the Biden administration make elect to “park it for awhile” and focus on drug pricing policies instead. Alternatively, the administration could an oncology incentive to other programs, such as Direct Contracting.

OCM, which started in July 2016, is a voluntary value-based payment program that initially included almost 200 oncology groups. Although the groups continued to be paid on a fee-for-service basis, they also received additional payments for coordinating care. Financial benchmarks gave the groups a chance to earn shared savings if they spent less than the benchmark. A May 2020 evaluation report by Abt Associates found that during the first two performance years, the program wound up costing Medicare $155 million rather than lowering expenditures. The Oncology Care First model is a successor to the OCM that is supposed to fix some of its problem, but the start of that program has been delayed because of the COVID-19 pandemic.

As critical as she was of the Oncology Care Model, Patel didn’t rule out some sort of value-based care and payment in cancer care: “I hope that any signal about how the Oncology Care Model did or did not work does not necessarily taint the ability to advance value-based care in oncology,” she said.

In her pre-recorded remarks to the cancer centers meeting, Patel praised Biden’s expected

appointment of Elizabeth Fowler as director of the Center for Medicare and Medical Innovation (CMMI). Like Patel, Fowler was a top healthcare official in the Obama administration after working on Capitol Hill. Patel called Fowler an “ACA veteran” and said “nobody knows the law, as well as the execution, better than her.”

Patel mentioned that the Supreme Court will hand down its ruling in the Texas v. California case on the constitutionally of the ACA this spring. But if the ACA isn’t thrown out by the court, Patel predicted “more and more provisions — they might require legislation — to strengthen and expand Medicaid coverage.” Just 12 states have not expanded their Medicaid programs under the ACA but two of them, Texas and Florida, are among the largest by population.

Patel also said she foresees policy changes regarding drug pricing: “There will be action on drug prices. There is no doubt in my mind.” But Patel did not venture a prediction on what the Biden administration will do about the “most favored nation” executive order that President Trump signed in September, instead saying it will be “interesting” to see what new administration does. The executive order, which was blocked in court, would have pegged Medicare Part B prices to prices in other developed countries.

The pandemic-induced spike in the use of telehealth has increased access to healthcare, Patel said, but she also mentioned concern about striking the right balance with in-person care. “It became a Goldilocks problem,” she said. “What is the right amount of telehealth? ”

Parity in payment between telehealth and an in-person won’t continue, she said. “But it is clear that allowing people to do more virtual visits is going to actually expand adherence and access. And in the area of cancer, I think we need to have more data to determine what the role of telehealth can be, should be, would be.”