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Medical Group Management Association

Implementation of Cost Effective Strategies

Fellowship Paper - October 5, 2021

Nadeem Khan MS, DHA, DABR, FACRO, FAHM, FHIAS, FACMPE
PROJECT SUMMARY

Radiation Oncology is a specialized subfield of oncology that treats and provides care to patients who have been diagnosed with cancer. Radiation Oncologists order dose prescriptions based on different modalities and fractionation schemes to treat patients based on published data, results from clinical trials and medical standards of care.

Reimbursement models in the field have traditionally been based on Fee-for-Service (FFS) payment schemes. This mode of payment has been historically favored by physicians as this involves minimal risk on their part. However, it has an inherent weakness for the payors as the payment model does not carry any incentives for the providers to strategize value over volume or to decrease the number of tests and services that are ordered to maximize payments.

For the better part of this decade, payors have started slowly transitioning from a volume-based reimbursement model to more value-based care (VBC). This has been on the forefront since the Centers for Medicare and Medicaid Services (CMS) in 2014 started looking at bundled payments within the Alternative Payment Models (APMs) for the specialty. Commercial insurances were the first to start negotiating and implementing the bundled payments approach with their clients based on episodes of care. CMS has delayed its rollout with an expected date of January 2022 for a pre-selected group of facilities that made the implementation list based on their zip codes.

This business proposal investigates the underlying principle for quality of care as opposed to the volume of patients treated by using the VBC bundled payment model. VBC advocates higher quality cost-effective treatments, expedited research on outcomes from hypofractionated treatments, steerage consideration by payors, internal standardized processes by providers and pre-determined overall costs for the patients. Several layers of buy-in from payors, providers, patients, administration, management and the community are needed for this strategy to be successful.

Organizational, marketing and financial strategies are closely examined to lay the groundwork on the benefits of the bundled payment model. The organizational plan discusses the strategy, SWOT analysis and strategic relationships to make a case for the reimbursement model. The marketing plan looks closely at the areas to market, stakeholders to approach, potential contracts to manage and exploit some prior underutilized market. Financial discussion dives deeper into the monetary implications with the newer reimbursement model in comparison to the current one in place to demonstrate the positive revenue stream from the bundled payment model.

By having an agreed-upon bundled payment model (whether disease or modality-based) all three entities - Payors, Providers and Patients can enter the  process by accurately knowing the costs, quality and services associated with the proposed course of treatment. Understanding the strengths of the payment model can enhance the organization's effectiveness and by evaluating the inherent weakness in the institution pertinent to the model, the organization can also elevate their programs to adapt according to the stipulations placed by the payments.

Bundled payments can lead to better utilization of resources, enhance quality, efficient workflows and less ambiguity on payments.

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About the Author

Nadeem Khan
Nadeem Khan MS, DHA, DABR, FACRO, FAHM, FHIAS, FACMPE
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