Time trends of Part D drug expenses and Part D risk adjustment in the Oncology Care Model at a community oncology network.

72 Background: The Oncology Care Model (OCM) was a 6-year Medicare value-based care (VBC) program that rewarded practices for providing high-quality cancer care to Medicare beneficiaries receiving system anti-cancer therapy, while decreasing Total Cost of Care (TCOC) compared to a benchmark price. TCOC in the model was driven by drug expenses and included both physician-administered (Part B) and prescription (Part D) medications. The past decade has seen several novel oral anti-cancer drugs revolutionize cancer treatment. The impact of the shift to oral anti-cancer drugs, the associated costs, and risk adjustments in the OCM is studied here. Methods: Using Medicare episodes data for 15 practices in The US Oncology Network (The Network) participating in the OCM, we evaluated the time trends of Part D drug expenses between July 2016 and June 2022, assessed the risk adjustment for episodes with and without Part D, and studied impacts on TCOC & benchmark prices. Results: Mean per episode spending at The Network practices increased 16.4% (3.4% CAGR) driven by a mean Part D expense per episode increase of 59% (8% CAGR) from 2016 ($5,532) to 2022 ($8,796) for OCM beneficiaries. Much of the increase was led by the approval of new oral cancer medications, cost increases on legacy oral medications, and expanded indications for oral medications in various cancer diagnoses. Mean Part D expenses increased 46.5% for Multiple Myeloma, 68.7% for Chronic Leukemia, and 124.2% for Breast Cancers. The OCM risk adjustment methodology used to determine baseline and benchmark prices includes a Part D risk adjuster that applies to patients with Part D coverage (with and without low-income subsidy eligibility) during the episode. The Part D risk adjuster increased the episode benchmark on an average by 5.1% ($2,112) (range between 2.9% ($850) in 2016, and 6.1% ($2,500) in 2022)), less than the actual increased Part D episode expenses. 81.4% of episodes in the OCM had Part D coverage that ranges between practices: 66% to 88.6%. Variation in Part D coverage between practices translates to variable impact of Part D risk adjustment in the OCM. Conclusions: Novel drugs, cost increases and newer indications for oral anti-cancer medications have translated into higher Part D spending for patients with cancer. Part D risk adjusters alone did not proportionately adjust benchmarks for increased Part D spending, disproportionately affecting those practices with higher Part D coverage. A modified risk adjustment approach for Part D is needed in TCOC VBC programs to account for variations in Part D coverage and increases in Part D expenses.