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February 2015
Center for Medicare and Medicaid Innovation (CMMI)
Oncology Care Model
Questions and Answers
Background
On February 12, 2015, the Center for Medicare and Medicaid Innovation (CMMI) released its
Request for Applications (RFA) for an oncology episode-based Medicare payment model (the
Oncology Care Model or “OCM”).1 This Q&A summarizes key components of OCM.
Key Takeaways

OCM applies to physician practices and payers.

OCM’s focus is on the total cost of care for cancer patients undergoing chemotherapy
during a 6-month episode. Practices will be paid regular fee-for-service (FFS) payments
plus a monthly per-beneficiary care management payment as well as have opportunities
for additional payments based on financial performance.

Drugs will continue to be paid at ASP + 6 percent.
Q: Who is eligible to participate in OCM?
A: Physician practices that provide chemotherapy and are currently enrolled in Medicare are
invited to participate in OCM.2 This includes hospital-affiliated physician groups.3 All
practitioners in a participating practice must be included in OCM. In addition, CMMI is also
inviting the participation of other payers. 4
1
Press Release, CMS, New Affordable Care Act initiative to encourage better oncology care (Feb. 12, 2015),
http://w w w.cms.gov/New sroom/MediaReleaseDatabase/Press -releases/2015- Press-releases-items/2015-02-12.html.
2
CMS, Oncology Care Model (OCM) FAQ, 3, available at http://innovation.cms.gov/Files/x/oc mfaqs.pdf.
3
CMS, OCM Practice Application Template, 3, available at http://innovation.cms.gov/Files/x/oc mpracticeapp.pdf.
4
Oncology Care Model, CMS, http://innovation.cms.gov/initiatives/Oncology - Care/ (last visited Feb. 20, 2015).
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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Q: How would physicians be paid under OCM?
A: Under OCM, physicians will continue to receive regular FFS payments, but will also be
eligible to receive two types of additional payments: 5
(1) $160 per beneficiary per month (PBPM) care management payments: CMMI will
distribute monthly, per-beneficiary payments to support practice transformation and
coordinated services to patients.
(2) Retrospective, risk-adjusted performance-based payments: Performance-based
payments will be calculated retrospectively following the completion of a 6-month
episode. The performance-based payment will be determined based on the practice’s
achievement of cost savings and performance on quality measures. To determine cost
savings, CMMI will establish a “target price” based on the practice’s historical data with
adjustments. If the actual costs of treating a patient are less than the target price, a
physician would be eligible to receive a performance payment up to the amount of the
difference between the actual expenditures (which include PBPM payments received)
and the target price. What percentage of the difference between expenditures and the
target price a practice receives will depend on its performance on certain quality metrics.
Q: How will drugs be paid under OCM?
A: Drugs will continue to be paid under the current Medicare FFS system at ASP + 6 percent. 6
Q: How is an episode defined?
A: An episode of care is defined as all care provided to a patient during a 6-month period
following the start of chemotherapy treatment, even care that is not related to chemotherapy
treatment or performed by the participating physician (i.e., all Medicare Part A, B and certain
Part D services).7 The intent of CMMI is to reduce overall costs during this episode as well as to
create incentives for coordination of care. There is no limit to the number of episodes that a
5
CMS, OCM Request for Applications, 9-10 (Feb. 2015), available at http://innovation.cms.gov/Files/x/ocmrfa.pdf.
Webinar, CMS, Oncology Care Model – Introduction (Feb. 19, 2015),
http://innovation.cms.gov/resources/OCMintro.html.
7
CMS, OCM Request for Applications, 6-7 (Feb. 2015), available at http://innovation.cms.gov/Files/x/oc mrfa.pdf.
6
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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beneficiary can trigger during the five year period of the program. However, CMMI believes that
it would be unusual for a beneficiary to be treated during more than two or three episodes. 8
Episodes begin on the date of an initial chemotherapy administration claim or an initial Part D
chemotherapy claim and would not include services provided prior to that date.9 CMMI has
developed a list of chemotherapy drugs, the administration of which would begin an episode.10
The list excludes topical formulations of drugs. 11
Q: How is the target price calculated?
A: The target price for the episode that will be used in a practice’s retrospective performance
review will be based on risk-adjusted historical data (referred to as a benchmark), trended
forward to the performance period and then reduced by a set discount percentage.12 The
amount of the discount will be 4.0 percent under a one-sided risk model (only upside risk) or
2.75 percent under a two-sided risk model (both upside and downside risk).13
This method may not take into account the costs of new and more expensive treatments if these
costs are not a part of the historical trend; however, CMMI is currently exploring ways to
incorporate new technologies and treatments into the calculation. 14 Additional information on
how new technologies will be incorporated into the target price will be provided to practices prior
to signing a participation agreement.15
CMMI will also risk adjust the target price; however, in the first year of the pilot, risk adjustment
factors will only be those that can be derived from claims data. 16 The agency intends to collect
additional information to use for risk adjustment in future years and requests input from potential
8
Webinar, CMS, Oncology Care Model – Introduction (Feb. 19, 2015),
http://innovation.cms.gov/resources/OCMintro.html.
9
CMS, OCM Request for Applications, 6 (Feb. 2015), available at http://innovation.cms.gov/Files/x/oc mrfa.pdf.
10
Id. at 29-32.
11
Id. at 32.
12
Id. at 7-8.
13
Id. at 8.
14
Webinar, CMS, Oncology Care Model – Introduction (Feb. 19, 2015),
http://innovation.cms.gov/resources/OCMintro.html.
15
Id.
16
CMS, Oncology Care Model (OCM) FAQ, 8, available at http://innovation.cms.gov/Files/x/oc mfaqs.pdf.
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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February 2015
participants on what data may be relevant for this purpose (such as the stage of a particular
cancer).17
Q: What type of quality metrics will be utilized in OCM?
A: There are two categories of quality metrics that will be collected from practices. 18 The first
category of metrics will impact the practice’s performance-based payments. These metrics may
change over the performance period. CMMI has provided a preliminary list of quality metrics
that will be used in OCM. Based on this list, the two types of measures that will be utilized for
performance-based payments are: (1) communication and care coordination and (2) personand-caregiver-centered experience and outcomes. Communication and care coordination
includes measures such as the number of emergency room visits and hospital admissions per
OCM beneficiary. Person-and-caregiver-centered experience and outcome measures include
whether OCM beneficiaries receive psychosocial screening and physician performance on
patient experience surveys.
The second category of metrics is “quality monitoring metrics” that would be used to monitor the
program more generally. This category also includes metrics on communication and care
coordination, as well as clinical quality of care, population health, and efficiency and cost
reduction measures. These metrics would not impact physician payments, at least initially.
“Prescription drug utilization” is one efficiency metric in this category. It does not appear that
utilization has been defined. It is unclear if this metric would take into account circumstances
under which a drug might be the most appropriate course of treatment for a patient, regardless
of cost.
Q: Are there any other requirements for practices to maintain eligibility for participation
in OCM?
A: Yes. Practices must: (1) generally treat patients with therapies consistent with nationally
recognized clinical guidelines (such as ASCO or NCCN guidelines); (2) provide 24 hours a day,
7 days a week patient access to an appropriate clinician who has real-time access to the
practice’s medical records; (3) use data to drive continuous quality improvement; (4) use an
electronic health record (EHR) certified by the HHS Office of the National Coordinator for Health
Information Technology (ONC) and attest to Stage 1 of EHR “meaningful use” by the end of the
first performance year (with the intention of attesting to Stage 2 by the end of the third
17
18
Id.
CMS, OCM Request for Applications, 25-28 (Feb. 2015), available at http://innovation.cms.gov/Files/x/oc mrfa.pdf.
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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February 2015
performance year); (5) provide the core functions of patient navigation (for example, providing
interpretation services); (6) document a care plan that contains the components of the Institute
of Medicine Care Management Plan outlined in the Institute of Medicine report, “Delivering HighQuality Cancer Care: Charting a New Course for a System in Crisis” (such as providing a
patient with estimated and total out-of-pocket costs for cancer treatment). 19 With the exception
of the EHR requirements as outlined above, all requirements must be met by the end of the first
quarter of the first performance year.20
Q: Which cancer types does OCM include?
A: OCM includes nearly all cancer types. However, performance-based payments will only apply
to high-volume cancer types. Practices will be provided with the list of high-volume cancers to
which performance-based payments will apply prior to entering into participation agreements.21
Q: Will other payers participate in OCM?
A: OCM is designed to be a multi-payer model that includes Medicare FFS and other payers
such as commercial insurance plans or state Medicaid agencies. CMS invites other payers to
participate in OCM by entering into a Memorandum of Understanding with CMS. There ma y be
differences between OCM-FFS and other payers in certain areas, such as selection of quality
measures for performance-based payment. However, the approach to practice transformation
must be consistent.22
Q: How long will OCM’s performance period last?
A: The performance period for OCM is five years and will begin in the spring of 2016.23 CMMI
does not plan to admit additional participants once the program begins.24 Participants that do
not achieve any savings by the end of year three may be asked to leave the program. 25
19
Id. at 17-18.
Id. at 17.
21
Id. at 9.
22
CMS, Oncology Care Model (OCM) FAQ, 9-10, available at http://innovation.cms.gov/Files/x/oc mfaqs.pdf.
23
CMS, OCM Request for Applications, 5 (Feb. 2015), available at http://innovation.cms.gov/Files/x/oc mrfa.pdf.
24
Webinar, CMS, Oncology Care Model – Introduction (Feb. 19, 2015),
http://innovation.cms.gov/resources/OCMintro.html.
25
Id.
20
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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February 2015
Q: What level of participation does CMMI anticipate?
A: CMS anticipates that approximately 100 physician practices will participate in OCM that, in
the aggregate, will furnish care for approximately 175,000 cancer care episodes over the course
of the five-year model.26
Q: When are applications due?
A: Interested payers must submit a letter of intent (LOI) through the OCM inbox at
OncologyCareModel@cms.hhs.gov by 5:00 p.m., EDT on March 19, 2015 (LOI instructions for
payers available at http://downloads.cms.gov/files/cmmi/OCM-PayerLOI_2_12_15.pdf).
Interested practices must submit a LOI by 5:00 p.m., EDT on April 23, 2015 (LOI instructions for
single location practices available at http://innovation.cms.gov/Files/x/ocmpractloi-single.pdf and
for multi-location practices available at http://innovation.cms.gov/Files/x/ocmpractloimultiple.pdf).
One week after the deadlines for LOI submission, CMMI will post the list of payers and
providers that have expressed interest in participating. The names of those submitting LOIs will
be posted publicly to facilitate cooperation between payers and practices prior to mod el
implementation. Payers and practices will then separately apply to participate in OCM. A
submitted LOI is not binding. Final applications must be submitted by 5:00 p.m., EDT on June
18, 2015. During the participant selection process, CMMI will prioritize physician practices that
propose participating in OCM with Medicare multiple (i.e., including non-Medicare) payers.27
26
27
CMS, OCM Request for Applications, 3 (Feb. 2015), available at http://innovation.cms.gov/Files/x/oc mrfa.pdf.
Id. at 19.
This document is presented for informational purposes only and is not intended to provide
reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex
and are updated frequently. While we have made an effort to be current as of the issue date of this
rule, the information may not be as current or comprehensive when you view it. In addition, this
information does not represent any statement, promise or guarantee by Johnson & Johnson Health Care
Systems Inc. about coverage, levels of reimbursement, payment or charge. Please consult with your
payer organization(s) for local or actual coverage and reimbursement policies and determination
processes. Please consult with your counsel or reimbursement specialist for any reimbursement or
billing questions specific to your institution.
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