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June 7, 2016

Specialty-Based Global PaymentA New Phase in Payment Reform

Author Affiliations
  • 1Department of Medicine, Massachusetts General Hospital, Boston
  • 2Harvard Medical School, Boston, Massachusetts
  • 3Dartmouth Institute for Health Policy and Clinical Practice, Lebanon, New Hampshire
  • 4Geisel School of Medicine at Dartmouth, Hanover, New Hampshire
JAMA. 2016;315(21):2271-2272. doi:10.1001/jama.2016.4318

To control health care spending and improve quality, public and private payers are increasingly moving away from fee-for-service toward global payment contracts with pay-for-performance. To date, global payment has been centered on the role of primary care physicians coordinating all care, including specialty care. In 2016, Medicare plans to begin a new contracting model for cancer care that may serve as a model for specialty-based global payment.

An example of specialty-based global payment is the Oncology Care Model (OCM). The OCM combines key features of global payment, medical homes, and pay-for-performance, while aligning incentives across multiple payers (Figure). The OCM creates a spending target that covers all Medicare Part A services (hospital, skilled nursing facility, hospice, and some home health) and Part B services (physician and some home health), as well as certain Part D expenditures, incurred during a 6-month episode starting at the initiation of chemotherapy.1 Historically, 52% to 71% of total spending occurred during this period, depending on the type of cancer.2 Similar to Medicare’s bundled payment initiatives, the OCM spending target is based on an episode of care (6 months in the OCM). And similar to the Medicare accountable care organization (ACO) programs, the OCM covers spending across the care continuum and is based on continued fee-for-service payments to clinicians and health care organizations.3 To date, more than 450 practices intend to participate in the OCM.4

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