New drug approvals and their effect on performance for participants in the Oncology Care Model.

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e13525 Background: The Oncology Care Model (OCM) is an oncology-specific value-based care model that holds participating practices accountable for all costs of care. Medicare implements quantitative adjustments to model target costs in OCM, including a trend factor to reflect aggregate cost growth and a novel therapy adjustment for new indications. However, it is unclear how well these adjustments account for the emergence of new therapies that are evidence based and influence standard of care for an individual cancer type. We sought to investigate this by studying the impact that FDA approval for brentuximab vedotin (BV) in the first line setting in March 2018 had on OCM practice performance in Hodgkin’s Lymphoma (HL). Methods: We identified all HL OCM episodes attributed to Tennessee Oncology (TO), a large community oncology network of over 90 oncologists, during performance periods (PP) 3 through 6. HL episodes within the lymphoma bundle were identified through the use of individual ICD-10 coded diagnoses on claims for antineoplastic infusions and E&M visits. Using OCM performance data, our electronic health record, and claims data analytics software, we calculated average episode target costs, drug spending by drug type, and hospitalization costs to determine key determinants of OCM performance. Results: During the study period, there were 577 episodes of lymphoma attributed to TO, of which 28 were for patients with HL. TO’s OCM performance in HL was significantly under target in PP4 (under target by $13.5K) and significantly over target in PP5 (over target by $32.1K) after the updated BV FDA approval. Average episode spending on BV increased by over $45K during this timeframe, while OCM target cost increased only by approximately $19K. Despite the change in OCM performance, hospitalization costs and hospice utilization remained relatively stable. Conclusions: In the OCM, despite quantitative payment factors that in principle are intended to adjust target prices to reflect changing cost dynamics, significant gaps exist. These gaps can inappropriately shift risk to providers for the appropriate use of new indications, including those that change standard of care. The example of brentuximab vedotin in HL illustrates the difficulty in reaching performance benchmarks due to dynamics associated with the rising cost of drugs. Further methodological changes are needed in future oncology value-based care models to ensure accurate prediction of rapidly changing treatment costs for appropriate therapies. Hodgkin’s lymphoma OCM payment period cost and utilization comparison data.[Table: see text]