Shift to Oral Anti-Cancer Drugs Impacting OCM: Study Shows Rise in Part D Drug Expenses

In a recent study, researchers examined the impact of the shift toward oral anti-cancer drugs and the consequent rise in costs within the Oncology Care Model (OCM). The abstract was presented at the 2023 ASCO Quality Care Symposium in Boston, Massachusetts. The OCM, a Medicare value-based care (VBC) initiative designed to incentivize high-quality cancer care while reducing overall costs, saw a significant surge in expenses attributed to Part D prescription medications over the last 6 years.

The research, carried out by analyzing Medicare episodes data from 15 practices within The US Oncology Network (The Network) participating in the OCM, found a 16.4% increase in mean per-episode spending at these practices. This increase, computed with a compound annual growth rate of 3.4%, was predominantly influenced by a 59% increase in mean Part D expenses per episode over the study period, escalating from $5,532 in 2016 to $8,796 in 2022 for OCM beneficiaries.

The escalating Part D expenses were primarily attributed to the approval of novel oral cancer medications, elevated costs associated with existing oral medications, and the widened usage of oral medications across various cancer diagnoses. A significant rise in mean Part D expenses were observed, including a 46.5% increase for multiple myeloma, a 68.7% increase for chronic leukemia, and a 124.2% increase for breast cancers, highlighting the widespread impact across diverse cancer types.

The OCM employed a risk-adjustment methodology to determine baseline and benchmark prices for episodes, integrating a Part D risk adjuster that is applicable to patients with Part D coverage. The study revealed that the Part D risk adjuster, on average, amplified the episode benchmark by 5.1% ($2,112), although this adjustment was notably lower than the actual increased Part D episode expenses. Furthermore, the investigation identified that 81.4% of episodes in the OCM were covered by Part D, varying significantly among different practices within the network, ranging from 66% to 88.6%. This disparity in Part D coverage among practices resulted in a variable impact of the Part D risk adjustment, disproportionately influencing practices with higher Part D coverage.

The researchers emphasized the need for a modified risk adjustment approach within total cost of care VBC programs, particularly focusing on Part D, to account for the variability in Part D coverage and the substantial escalations in Part D expenses. 

Indurlal P, Wilfong LS, Thomas HI, Staggs SG. Time trends of Part D drug expenses and Part D risk adjustment in the Oncology Care Model at a community oncology network. Presented at: the 2023 ASCO Quality Care Symposium; October 27-28, 2023; Boston, MA, and virtual; Abstract 72.