ASCO Patient-Centered Oncology Payment Model: Clearest Way to Move from Fee-for-Service to Value-based Care

In the latest ASCO in Action Podcast, ASCO CEO Dr. Clifford A. Hudis is joined by Dr. Jeffrey Ward, a leading contributor to the society’s updated Patient-Centered Oncology Payment (PCOP) model, to discuss how PCOP can improve patient care and lower costs.   

“If we don’t find a way to bend the cost curve, we’re not going to be able to fulfil the mission to take care of our patients,” said Jeffrey Ward, MD, FASCO.  Currently the clearest way to move from fee-for-service to value-based care, notes Dr. Ward, PCOP “will invigorate our specialty and our practices” and “improve the way we give care.” 

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Transcript

Disclaimer: The purpose of this podcast is to educate and to inform. This is not a substitute for professional medical care and is not intended for use in the diagnosis or treatment of individual conditions. Guests on this podcast express their own opinions, experience, and conclusions. The mention of any product, service, organization, activity, or therapy should not be construed as an ASCO endorsement.

Dr. Clifford Hudis: Welcome to this ASCO in Action podcast, brought to you by the ASCO Podcast Network. This is a collection of nine programs covering a wide range of educational and scientific content and offering enriching insights into the world of cancer care. You can find all of ASCO's podcasts, including this one, at podcast.asco.org.

The ASCO in Action podcast series explores policy and practice issues that impact oncologists, the entire cancer care delivery team, and most importantly, those individuals we care for-- people with cancer. My name is Clifford Hudis, and I'm the CEO of ASCO, as well as the host of the ASCO in Action podcast series.

For today's podcast, I'm delighted to have as a returning guest Dr. Jeffery Ward, past chair of ASCO's Government Relations Committee. He's here today to talk with us about ASCO's newly updated Patient-Centered Oncology Payment model, or PCOP. This is an alternative payment model which he had a major role in authoring and developing. Dr. Ward, who in many respects could be considered a Founding Father of ASCO's payment reform initiative, is going to tell us more about the significant updates in this model, its goals, and how it could work to improve care for patients with cancer. Welcome, Dr. Ward.

Dr. Jeffery Ward: Thank you. Good to be here.

Dr. Clifford Hudis: Jeff, I'm going to dive right in. I've called you a Founding Father because you played such a critical role in shaping ASCO's more than five yearlong effort to develop a viable alternative to the current pay-for-service reimbursement system. Before we get into the updated model, can you tell our listeners a little bit about how we got here today? Why are you a Founding Father?

Dr. Jeffery Ward: Well, my recollection is that it actually began about eight years ago, but it took three years to get a work product. Through an intermediary, the Brookings Institute, they asked ASCO if we had any ideas or offerings that the Congressional Budget Office could score as savings without driving oncology out of business.

At the time, I was a brand-new CPC chair, and waiting with Rocky Morton from Iowa. We pulled together-- the CPC steering committee-- about 15 doctors, mostly from community practices, and had some fairly heated meetings focused on what has proven, over time, to be a very tall peak to climb-- alternatives to buy-and-bill chemotherapy.

At the end of the day, we told the supercommittee that we had nothing for them but promised to stay engaged. That wasn't a good feeling. It wasn't a good day. And we decided that that wouldn't happen again. So, we put together a payment reform workgroup consisting of community, hospital, and academic-based oncologists, pulled in a lot of ASCO support staff, and hired a consultant-- or mediator-- to try and keep us focused. The only prerequisite to be on this group was that you had to be reform-minded, and our task was to forget everything that existed and propose a novel reimbursement model.

Dr. Clifford Hudis: Well, that brings us right to the current day and we recently put out the update of this. The official name is the ASCO Patient-Centered Oncology Payment, which is a community-based medical home model-- or PCOP for short. But at a very high level, can you tell us, what does this updated PCOP do? What makes it unique as an alternative payment model?

Dr. Jeffrey Ward: I think at a high level, it makes the oncologists responsible for being a good steward of our cancer care delivery system-- I think, arguably, the best cancer care delivery system in the world-- without making us responsible at the same time for what the market will bear-- drug prices that are both ridiculous and entirely out of our control. So, I think it aligns what we aspire to and how we get aid into one cohesive model.

Dr. Clifford Hudis: What are the specific approaches that our PCOP uses to make sure that patients have access to high-quality care, and practices have the resources they need to provide that care? And you alluded to the tension already, but I'll clarify, maybe, even more. There are those critics who will say that doctors should be focused solely on quality of care and outcomes for individual patients. And there are many others in our community who make very clear arguments for our responsibility to society to balance benefits against costs. So how do we thread that needle?

Dr. Jeffrey Ward: Well, I don't think that that's a dichotomy. I think what you have to do is, you have to say, those two goals can and should be married into a cohesive model of both delivery of care and reimbursement. PCOP actually has two reimbursement models. It has a starter track. It'll be familiar to followers of Medicare's oncology care model demo. It takes a performance-based reimbursement system and puts it on the backbone of traditional fee-for-service. But there's one big difference, in that it doesn't hold practices responsible for drug list prices.

Then there's an advanced track that's really closer to the original payment model we first published in 2014. It transitions fee-for-service oncology to monthly bundled payments and replaces the margin on drugs with a suitable pharmaceutical management fee. Critically, both tracks then marry the reimbursement model with an oncology medical home model of care and value-based clinical pathways in an effort to hold us responsible for care management and appropriate utilization of oncologics that, I believe, broadly applied, would put downward pressure on pharmaceutical drug prices without putting practices in the middle anymore.

Dr. Clifford Hudis: I want to drill down a little bit on this oncology medical home framework. What would it actually take for a practice to engage in this, and how would a patient perceive benefit?

Dr. Jeffrey Ward: For a practice to be able to say, “we're going to do this”, they would start, probably, with the simpler track and work their way up. In the advanced track, the PCOP payment methodology actually involves three components. There are monthly payments, there is residual fee-for-service reimbursement, and then there's performance incentive payments. Practices are held accountable for providing high value, evidence-based care under three different performance categories. These three scores of equal weight then contribute to a score that, done well, improves your reimbursement. Done poorly, it lowers your reimbursement. And though it's contrary to business as usual, I think it's hard to argue that it shouldn't, particularly when you as a practice had a role in creating the parameters themselves.

Dr. Clifford Hudis: What happens-- just for people who might either be interested in this, but haven't participated, or for people that are approaching this slightly more academically, you're going about your business and you're in a practice. What triggers you to start doing this? Another is, why don't you just put your head down and keep doing things the way you have?

Dr. Jeffrey Ward: I think for several reasons. One reason is that we have a system that isn't going to be able to continue the way it is. There's no doubt that prices are accelerating in such a way that, if we don't find a way to bend the cost curve, we're not going to be able to fulfill the mission we have to take care of patients.

The second reason is that this is a pathway that actually is going to improve the way we give care. The struggle we have with fee-for-service medicine in general is that it rewards the provider for doing more. This effect is amplified dramatically when you apply it to the cost of drugs. On the other hand, value-based pathways-- what we've built into this-- that look at efficacy first, toxicity second, and cost as a tiebreaker, can reward me for using the right drug in the right patient at the right time. And a well-constructed pathway will avoid both over and under-utilization of therapies. And that helps make PCOP, I think, uniquely different from payer-mandated pathways because it's a prospective pathway agreed upon by the providers and the payers in a transparent and collaborative way. So, there's several things, I think, that we've done to try and combine both reimbursement and care into one cohesive model, instead of two separate tracks that incentivize different things.

One other aspect of this-- beyond the internal control that you have with pathways-- is, of course, that nobody practices in a vacuum. And I understand a major element of the PCOP design is its emphasis on implementation in communities that include multidisciplinary providers and practices. It also includes, at least theoretically, multiple kinds of payers-- federal and state on the one hand, and then private on the other, the latter including employers. And finally, it can include patients with some mobility and span regional health networks.

Dr. Clifford Hudis: I guess I have two questions. One, what is the benefit of this broader approach to the PCOP model? And the second is, what are some of the challenges that that brought?

Dr. Jeffrey Ward: I think one thing that's really unique in the update in the model-- it's certainly not something that we had envisioned initially, and it's why evolution, I think, of the model is important-- is the recognition that quality improvement happens slowly if you're in a silo. And so PCOP is really designed to bring together geographic communities of providers, payers, policymakers, and then it yokes them together to the patient's benefit. It allows for efficient sharing of best practices. One of the things that being involved, I think, in both the Washington State Medical Oncology Society here in my state and in ASCO at the same time has taught me that being collaborative helps our patients a whole lot more than being competitors.

Dr. Clifford Hudis: I asked this question a little bit before, but now, even thinking about networks and collaboration, I'm going to ask it again and maybe push, even, a little harder. But in practice, how do you implement PCOP? How does a practice go from, it's Tuesday morning and we're running along the way we have since 2003, and it's Wednesday and now I'm in PCOP? What actually do you do to engage?

Dr. Jeffrey Ward: Yeah, I do think that there is a bit of a hurdle there. But there are also, I believe, some natural places that this could happen and get a foothold, and that once people see how this model worked and how effective it was, that it would certainly gain in popularity. I think Medicare Advantage plans, Medicaid HMOs, some accountable care organizations in particular have really struggled with, how do we manage oncology? And one way to do it is to partner with the providers and be able to manage together, and PCOP would be a godsend for some of those payors.

Dr. Clifford Hudis: Well, I think-- not to get too inside the beltway about this-- we know for sure that the bandwidth and resources within CMS right now-- in CMMI, rather-- are limited enough that it is unlikely that they will wholesale adopt our model. And that leaves two possibilities. One is, they may take pieces of it as they upgrade the existing model. The other is that we might go it alone-- that is, outside of the Medicare system. But I think, in either case, we're really hitting on something which I wanted to get out there. It feels to me like it isn't ultimately-- narrowly-- up to the practice to adopt this. It's up to the payers to press practices in this or another direction. This is a response to pressure from payors. Do I have that right, or am I off base on that?

Dr. Jeffrey Ward: I think different communities feel pressures differently. In Washington state, I think we've been a little bit slow for our payers to step in and begin pressing us for alternative payment models. It's been more common in other places. But I do think that practices should consider this their counterproposal to some of the draconian efforts that we're seeing payers develop in other parts of the country. It's going to be a whole lot easier, I think, long-term if we're working together than if we are at odds.

And as-- this really raises two questions, a narrow one about the ideal practice setting for this, and the other is about the resources necessary to make this step. So, I guess my question is, do you think that this is targeted specifically at small community practices, or is it applicable to other types of practices? And related to that, can you talk about how ASCO itself is able to provide additional support for people that might want to do this?

I know that the concepts in PCOP can improve patient care and they can lower costs. I think it would ultimately invigorate our specialty and our practices if we were to move in this kind of direction. We know our current system is unsustainable, and ultimately won't be good for us or our patients. This represents a real opportunity that, as they say, you're either at the table or on the table.

Dr. Clifford Hudis: Well, ultimately, for this to succeed, it has to fill a need, or it has to help with something. We know that the majority of practices are dealing with a variety of meaningful, serious pain points. Our most recent ASCO Practice Census found that almost 60% of practices found payer pressures-- or cited payer pressures as their top concern. How would the PCOP reduce that pain for those practices?

Dr. Jeffrey Ward: Well, somebody's going to listen to this and they're going to think I'm a complete Pollyanna. But I really think the biggest reason for the enmity between the providers and payers is that we're playing with two different sets of rules. And PCOP allows for setting the rules for both of us. So if our focus is on the patient-- and I really do think that most payers want a patient focus of care-- I think we can find common ground around PCOP once we get together and start talking to each other instead of talking at each other.

Dr. Clifford Hudis: Do you think that this is-- or how big of a part do you think this is in the ongoing transformation from fee-to-service to fee-for-value-- in other words, the conversion to value-based care? Is this ultimately how we get there, or do you think there'll be other routes that practices can follow?

Dr. Jeffrey Ward: I'm certainly not going to say there's only one way to do anything. But I think-- I could certainly get in trouble in some circles for saying this out loud, but I think that the demise of fee-for-service medicine and buy-and-bill chemotherapy is coming. I think ASCO should take the lead in implementing the change. I think oncology as a community should take that lead and then improve on it. So, I don't think this is the end-all. I think there could be other ways to do it. But right now, I think this is the clearest way to get there.

Dr. Clifford Hudis: If you talk to policymakers and you listen to candidates on the campaign trail, health care costs in general-- drug prices specifically-- are clearly at the top of the agenda and get a whole lot of rhetoric these days. So, if PCOP were to be implemented, how do you see it actually changing the cost of care? Where would the cost savings come from? And I think, alluding back to the comment you made before regarding fee-for-service, how confident are you in the ability of the health care system to distribute high-quality providers and access to care the way we need it, to be sustained? Because that obviously is sustained in part by the fact that people can make a living doing this.

Dr. Jeffrey Ward: Yeah. Data and experience tells us that the savings available through triage pathways, proactive patient-reported outcomes, efficient use of hospital facilities to limit ER visits and hospitalizations can produce real savings. The savings that occurred in the United Healthcare demo all came out of those kinds of savings, not from changing drug prescribing habits, or at least drug costs. I think there's also sufficient evidence to believe that value-based clinical pathways do bring savings. And I think there's a lot of improvement yet to be done in that arena.

Dr. Clifford Hudis: ASCO has estimated that PCOP could bend the total cost curve for cancer care by 8%. That's huge. It doesn't try to measure the impact that widespread use of value-based pathways may have on drug prices. In my opinion, if everybody was on a value-based pathway, the only way to move up on the pathway if you're a drug company may be to lower your price, and we may see competition on list prices. That's something that's never happened in brand-name drugs today. I think that there's an opportunity, if this caught on and large numbers of practice were doing it, to actually bend the cost curve on drugs beyond just the 8% that ASCO has estimated so far.

And-- I'm just curious. You alluded already to the fact that the Center for Medicare and Medicaid Services model-- the pilot program, which was the first oncology alternative payment model, called the OCM-- that it's actually about to sunset. And you talked already about that pressure of time-- and I'm thinking about cost control, which is really their issue-- how does PCOP build on what we've learned from OCM? There must be some lessons that we can then implement in round two here, no?

Dr. Jeffrey Ward: Yeah, I think there is. And we've answered some of this in our discussion already. The amount of data that the practices have access to has really allowed them to fine-tune their practices and lead the practice transformation. Unfortunately, we've had to hire actuaries to figure it out, but that may be the price of success. We've tried to take the good-- we have OCM incorporated into our new proffered PCOP-- and leave the bad.

As we've mentioned, I really believe the Achilles heel of our OCM is that it puts drug list prices front and center and makes providers responsible for them. I know that CMMI has doubled down on this, and they believe that they can win their way into limited risk. But it still makes winners and losers based on luck of the draw-- based on who walks in your door. So, I really hope that CMMI will take a hard look at PCOP-- test as it is, or tear it apart piecemeal and use its best parts to improve OCM. It would be a shame if OCM was thrown out as a failed experiment just because it hasn't reached a point where people are ready or capable of taking two-sided risk.

Dr. Clifford Hudis: We've covered a lot, and yet we've, I think, just begun to scratch the surface. So, if a practice listening to this-- a payer, if an employer or any other stakeholder has their interest piqued by our discussion and wants to implement PCOP, or just wants to learn more, what should they do? Who should they contact?

Dr. Jeffrey Ward: Well, I think that first they can head to the ASCO website at asco.org. They can also reach out to Clinical Affairs Department at [email protected].

I think that-- for those of you that didn't get a chance to write it down, I would just urge you, clinical affairs as written as one word. So [email protected]. That's an attended email box. And frankly, by coincidence, I happened to be looking for the PCOP article this morning. And if you just Google PCOP and ASCO, one of your first few hits will be the 64-page PDF with a nice introduction from our current president, Skip Burris.

Dr. Clifford Hudis: I do encourage people to follow Jeff's lead and dig into this, and start to familiarize yourself both with the specifics, but also with the concepts. I think this is likely to be a long-standing conversation and a gradual evolution for our community. So, with that, Jeff, is there anything else you want to add? Do you think we've missed any important topics as we are closing out this conversation today?

Dr. Jeffrey Ward: I'm sure we have. I can't think of them.

Dr. Clifford Hudis: Well, I do want to thank you for joining me for this particular ASCO in Action podcast. It's always nice to have you back. And we look forward to hearing about the progress of PCOP and hearing even from CMMI what their review of it is in the months ahead.

Dr. Jeffrey Ward: It's exciting times. Thanks.

Dr. Clifford Hudis: And for those of you listening today, if you've enjoyed what you heard, don't forget to give us a rating or review on Apple Podcasts or wherever you listen. And while you're there, be sure to subscribe so you never miss an upcoming episode. The ASCO in Action podcast is just one of ASCO's many podcasts. You can find all of the shows at podcast.asco.org. For now, and until next time, thank you for listening to this ASCO in Action podcast.

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