Blog Post

The Changing World of Oncology Reimbursement – Are You Ready?


The expenses associated with cancer care in the United States are staggering and only expected to climb. In 2010, the total cost was $125 billion. By 2020, with more individuals living with cancer as a chronic disease, costs are expected to grow by 36% and exceed $170 billion. Faced with escalating costs, the government, payors, and providers are engaging in various activities to test different reimbursement methodologies for cancer care.

But full transition to value-based payments in oncology will continue to be an evolution, not a revolution – and collaboration is key. The aim is to shift the economics from a fee-for-service environment (buy and bill) to one that reimburses for quality, efficiency, and a lower cost of care. Typically, we see payors and providers collaborating on the following types of value-based reimbursement models:

  • Pay for Performance – Performance-based payment related to the oncologists’ compliance with select clinical pathways and proven guidelines
  • Oncology Patient-Centered Medical Home– Coordination payments for care management across a spectrum of clinical and supportive services
  • Commercial Payor Shared Savings Projects – Targeted ED visit and hospital utilization cost reductions through adherence to clinical pathways and guidelines, with savings from reduced utilization and improved care management shared with the oncologists

Early pilot programs have found that applying one or more of these reimbursement models has made an impact on the cost of delivering care to cancer patients. Oncology practices, however, have had to consider the additional costs to manage the expanded administrative and clinical duties under these arrangements. Oncology providers need to be able to respond to payors with the necessary data and quality measurements for their services. Further collaborations and clinical partnerships often require more effort from already busy providers to help patients navigate a complex system of care. In the end, oncologists will need to evaluate each new payment model in light of these additional commitments and costs.