Reshaping Oncology Care Delivery and Payments - Episode 7

Bundled Payments in Community Oncology

Treating Medicare patients can be a break-even business in community oncology, placing importance on the relationship with commercial payers, according to Michael Kolodziej, MD. There are inherent challenges associated with moving from a fee-for-service payment structure to one that is based on care that is deemed appropriate.

If an oncology clinic is not part of a larger physician practice, its oncologists may work with multiple other providers to provide care to patients. However, notes Kolodziej, the clinic has no leverage with these other providers to negotiate a contract or price. Also, it is often unclear when the episode of care begins and ends.

There are also inherent issues with bundled payments, adds Jeffrey C. Ward, MD. For bundled payments to work, they need to be constructed very carefully. Hundreds of bundles may be needed in oncology because of the complexity of the care, notes Ward.

Many community oncology practices have focused their business efforts on the efficient administration of chemotherapy, notes Kolodziej. This model may need to change in order to deliver optimal care to the patient.

CMS’s Oncology Care Model (OCM) failed to deal with some of the core issues connected to traditional fee-for-service, says Ward. OCM is really just fee-for-service along with shared savings that are based on a calculated bundle, adds Ward, which provides an incentive to do more and an incentive to do less.