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Obama administration moves to reform cancer care payment system

The Department of Health and Human Services (HHS) announced plans Thursday to better take quality of care into account — rather than just the quantity of services offered — when it comes to payments for cancer treatments.

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The new Oncology Care Model announced Thursday provides performance-based payments for chemotherapy under Medicare in order to incentivize high-quality care.

It is part of a larger effort by HHS to transition away from the dominant fee-for-service model toward one that pays based on performance and whole episodes of care, rather than for each procedure.

"The Oncology Care Model encourages participating practices to improve care and lower costs through episode-based, performance-based payments that financially incentivize high-quality, coordinated care," the Centers for Medicare and Medicaid Services said in a release.

Medical practices can sign up for the new program by April 23. 

"The new Oncology Care Model that the administration announced today holds the potential to advance cancer treatment and the coordination of care," said Christopher Hansen, president of the American Cancer Society Cancer Action Network. He praised the effort for encouraging changes like measuring health outcomes as "improvements in health care delivery that could save more lives from cancer."

The program is part of a broader push at HHS. Department Secretary Sylvia Mathews Burwell last month announced for the first time an explicit timeline for transitioning away from the fee-for-service model. 

The aim is to tie 30 percent of traditional Medicare payments to care quality by the end of 2016. Fifty percent would be tied to care quality by the end of 2018.

The new system uses Accountable Care Organizations, groups of doctors and hospitals who receive payment based on health outcomes and how well they coordinate care. 

"It is in our common interest to build a healthcare system that delivers better care, spends healthcare dollars more wisely and results in healthier people," Burwell said then.