How Clinical Pathways Can Support Bundled Payment Models

As the Blue Ribbon report of the Cancer Moonshot1 called for in 2016, we need to build the national cancer data ecosystem that is equal in dimension to the disease burden cancer imposes on society and the resources that we put into cancer care. Value-based contracting is an approach that has much potential. The challenge of shifting current stakeholders to such a value-based model is an excellent opportunity for clinical pathways to play a role in identification of the critical elements needed for value-based contracting. Bundled payment models are garnering much attention in this area, as all stakeholders are required to be at the same table in order to be successful.


Historically, Medicare has made separate payments to providers for each individual service provided, such as for inpatient care, for providers, and for drugs—each has been paid separately, in a silo. This approach results in fragmented care with no coordination across providers and care settings. This form of payment has rewarded the quantity of services offered by providers rather than the quality of the care. 

An alternative approach that has arisen is value-based contracting—a strategy in which payers and biopharmaceutical manufacturers agree to specific terms that tie payment to results.2,3

Although groups such as the American Society of Clinical Oncology (ASCO) and the Institute for Clinical Effectiveness Review have done important research and strategizing to create frameworks for gauging the value of therapies, no framework to date has gained universal acceptance among all stakeholders.4 Value-based contracting directly with the Centers for Medicare & Medicaid Services (CMS) may be impossible, which paves the way for value-based contracting through bundled payments with guidance from clinical pathways. This presents an opportunity for clinical pathways to be developed across organizations and stakeholders to devise frameworks for deciding which patients will receive these therapies, what expectations we should have of therapeutic performance, what we will attempt to learn about these therapies as we observe outcomes over time, and what we will pay.

Bundled Payments for Care Improvement

In the drive to add more value to care, bundled payments will serve as a major vehicle for change. Research has shown that bundled payments can align incentives for providers and pharmaceuticals, allowing these stakeholders to work in coordination toward improved clinical and financial outcomes.5

The Bundled Payments for Care Improvement (BPCI) initiative is comprised of “four broadly defined models of care which link payments for the multiple services beneficiaries receive during an episode of care.”5 Under this initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. These models are designed to lead to higher quality and more coordinated care at a lower cost to Medicare. 

This model presents an ideal arena for clinical pathways to guide providers, payers, and patients to these desired outcomes; you could also add to this group pharmaceutical manufacturers that are looking for ways to partner with these stakeholders through value-based contracting. Bundled payments allow clinical pathways to integrate not only the most appropriate treatment path but also the metrics to define success, with these 2 components serving as a foundation for bundled payment value-based contracting between CMS/payers, providers, and pharmaceutical manufacturers.

The BPCI initiative was developed by CMS through their Center for Medicare and Medicaid Innovation (CMMI). CMMI was created by the Affordable Care Act to test innovative payment and service delivery models that have the potential to reduce Medicare, Medicaid, or Children’s Health Insurance Program expenditures while preserving or enhancing the quality of care for beneficiaries. Over the course of the initiative, CMS is working with participating organizations to assess whether the models being tested result in improved patient care and lower costs to Medicare.

Under BPCI, the inpatient stay in an acute-care hospital triggers the bundled payment episode, which includes post-acute care and all related services up to 90 days after hospital discharge. BPCI Episode Initiators include acute-care hospitals, skilled-nursing facilities, physician group practices, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals that trigger an episode of care. But these bundled payment triggers could also be initiated from a diagnosis of a disease that requires a period of treatment, such as with many forms of cancer.

Bundled Payments in Oncology

In a recently published article, Susan Dentzer, president and CEO of The Network for Excellence in Health Innovation (NEHI), outlined opportunities and challenges in value-based contracting for high-cost cancer treatments that require specific terms of engagement.6 This is particularly relevant now as many of the emerging cancer drugs provide targeted therapies tailored to the specific genetics and molecular pathways of different types of cancer. Drugs already on the market, such as the chimeric antigen receptor (CAR) T-cell therapy tisagenlecleucel (Kymriah; Novartis)7 and the programmed cell death-1 inhibitor pembrolizumab (Keytruda; Merck),8 have demonstrated very successful outcomes for some patients and cancer types. For example, they can produce added months of survival without any progression of disease or total remission for some patients with previously untreatable or relapsed cancers. 

To encapsulate the difficulty of some of these challenges, consider the example of Kymriah, which is approved by the FDA for use in patients up to 25 years old who have acute lymphoblastic leukemia that is either relapsing or refractory (ie, the cancer did not go into remission with other leukemia treatments). The FDA approved the treatment in August 2017, after a phase 2 trial in which 63 patients showed an 83% remission rate within 3 months of infusion.9  To produce the therapy, a patient’s T cells are extracted through a special process in qualified hospitals, frozen, shipped to a special manufacturing facility where they are genetically reprogrammed, shipped back to the hospital, and reinfused into the patient after the patient undergoes low-dose chemotherapy to prevent the re-engineered cells from being rejected.



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