Practices in Oncology Care Model Ready to Assume Two-Sided Risk

Oncology practices participating in CMS’ Oncology Care Model (OCM) are willing to take on two-sided risk, according to a survey conducted by the Community Oncology Alliance (COA). 

The survey included 68 OCM practices that had a December 3, 2019 deadline to decide whether to continue in the OCM and accept two-sided risk going forward or drop out. Following that deadline, the only OCM practices that could remain in the OCM without accepting two-sided risk were ones that had received at least one performance-based payment.

The survey uncovered that 47.1 percent of practices (32 practices) opted to remain in the OCM with one-sided risk, while 36.8 percent (25 practices) chose to enter into two-sided risk. Only 16.0 percent said they were dropping out of the OCM completely. 

Additionally, 34.4 percent of practices selecting two-sided risk had not received a single performance-based payment. 

“The last three-and-a-half years have done much to educate and prepare teams for new models of cancer care,” Bo Gamble, director of strategic initiatives at COA, stated in a press release. “No longer are incentives purely about utilizations. Now there are numerous attempts to design a model with emphasis on quality, value, and meaningful quantifiable outcomes. The OCM, and the 20 plus other models, are consistent with that message.” 

Practices remaining in the OCM and taking on two-sided risk represented 679 MDs. The average practice size that assumed two-sided risk was 29.5 MDs. And the largest practice taking on two-sided risk had 160 MDs, while the smallest had two MDs.

Two-sided risk meant that these groups have to pay back Medicare if they did not achieve the required cost savings. Many experts believe that incorporating two-sided financial risk is key to making providers more accountable for their care.

CMS and other private payers have continued to push providers to take on the double-sided arrangements. And many Medicare alternative payment models increased two-sided financial risk levels as programs matured.

Assuming two-sided risk has been a struggle for providers. A recent AMGA survey found that risk-based revenue among medical groups and integrated delivery systems represented just 56 percent of federal and 28 percent of commercial revenues in 2018. Additionally, a separate study from Dartmouth showed that two-sided risk adoption is still low among accountable care organizations (ACOs).

The results of the COA survey uncovered that oncology practices are confident that they can succeed in delivering high-quality and cost-effective cancer care as the healthcare system shifts to two-sided risk.

The survey found that 22 practices (32.4 percent) that had not received any performance-based payments are continuing in the OCM and taking on two-sided risk. Only 3 out of 68 (4.4 percent) practics that received a performance-based payment through the model reported that they were entering the two-sided risk arrangement. 

“These teams must feel good about their progress or they were comfortable with the safe zone option,” Gamble stated.

Thirty-percent of the practices were in the “safe zone” for all four performance periods, while  22.0 percent were in the safe zone for three performance period, 39.0 percent were in the safe zone for two performance periods, and 9.0 percent were in the safe zone for just one performance period. 

The safe zone is when a practice’s actual costs fall between the OCM’s targeted and benchmark costs, the survey stated. This also means that the practice does not earn a performance-based payment, but is also not responsible for costs exceeding the target amount. 

The safe zone option has made two-sided risk more acceptable for numerous OCM practices.

The COA survey also touched on reinsurance, which helps protect providers from downside risk. The survey found that:

• 25 of the practices taking on two-sided risk said they would purchase reinsurance to cover their potential losses
• 17 practices indicated they would not obtain reinsurance
• Two practice were undecided 
• One practice said it may withdraw from the OCM if it does not get reinsurance by the end of the year

The practice size purchasing reinsurance is smaller than the average practice side opting for two-sided risk so some practices will need to tread lightly. 

“This suggests the smaller practices have more to lose if they do not do well and therefore need some financial security,” Gamble concluded.

The COA is currently putting forth efforts to develop its own payment model for cancer care based on quality and value. It will include an alternative payment model (APM) that includes proposals for value-based drug contracts and would provide affordable high-quality care if implemented.