Building a Regional Cancer Care Collaborative: The OHSU-Legacy Cancer CollaborativeModerator: John Hennessy, M.B.A., C.M.P.E., Senior Vice President, WellrithmsPanelists:• Tony Melaragno, MD, VP Behavioral Health and

Oncology Services Legacy Health• Mark Krasna, M.D., Corporate Medical

Director, Meridian Cancer Care• Michael L. Blau, Esq., Foley & Lardner LLP• Lennie Sender, M.D., Senior Vice President,

Pediatric & Young Adult Cancer Medical Affairs, NantKWest

Building a Regional Cancer Care Collaborative: The OHSU-Legacy Cancer Collaborative

OHSU-Legacy Cancer Collaboration• Began July 2013• Includes all radiation oncology for both organizations – 5

sites• Includes all community medical oncology and infusion in 5

counties– 6 current sites

• Co-managed by both organizations with an Executive steering committee with equal representation by both parties

• Finances fully integrated and net income distributed based on baseline organizational contributions

OHSU-Legacy Cancer CollaborationWhat Drives Success of Partnership

• Both Parties Bring Key Ingredients to the collaboration– OHSU

• Academic Institution• The Knight Cancer Institute with expertise and vast financial resources• Community network of strong Hematology Oncology providers• Access to Personalized Medicine and Advanced Research protocols

– Legacy Health• Regional system with multiple hospitals and a large network of Primary Care

clinics• Strong tradition of surgical oncology, especially breast specialists and

innovation in radiation oncology – Recent add of large Gyn-Onc practice• Continuous growth in volume of cancer diagnoses• Commission on Cancer Outstanding Achievement Award – 3 Successive Surveys

OHSU-Legacy Cancer CollaborationWhat Are the Challenges

• Collaborators but still Competitors• Fear of the “University” stealing patients• Realigning Existing Referral Patterns• Certain Operational changes by one partner may need to be

vetted with the other – OHSU has other relationships• Educating individual site staffs that it’s okay for a patient to

go to another collaboration site• Varying Insurance contracts – Possible negative impact on

patients

OHSU-Legacy Cancer CollaborationAdvantages

• Patients can receive consistent, high quality cancer care at local site convenient for them

• Organizations use collaborative process to decide on New Technology purchases – reducing duplication and cost

• Oncology Collaboration Council - Providers design quality metrics and dashboards across sites - compared on a regular basis –guide research plans

• Providers and staff can be shared across sites when needed• Working toward utilizing proven treatment pathways, guidelines

across the community platform

OHSU-Legacy Cancer CollaborationResearch

• One of the original drivers of collaborative– Legacy had large number of patients with various cancer types– Legacy has large, experienced research team– Community providers want to participate in research onsite– Both organizations had various memberships in Cooperative

groups• Hurdles to overcome

– Each organization had separate IRBs– Each organization needed “credit” for enrollment to maintain

accreditation– Organizational control– Sorting out the finances of research

OHSU-Legacy Cancer CollaborationResearch – Successes

• Developed a Memorandum of Understanding between 2 organizations defining guidelines and responsibilities for each

• More effective collaborations between research coordinators of each org

• Increased accrual for both organizations – has continued to grow over past 2 years – both groups are exceeding their organizational goals

• Increased access to more advanced studies for patients and providers over the past 12 – 18 months

OHSU-Legacy Cancer CollaborationCurrent Status

• Continue to see expansion of infusion volume • Gradual shift in referral pattern from For profit provider

network to collaborative• Building of trust between providers from the 2

organizations• Financially successful for both organizations• Interest from other organizations about potential

inclusion in the collaboration• How do you include new members

0

12,750

25,500

38,250

51,000

63,750

FY 2014 FY 2015 FY 2016

Annual HemeOnc Collaborative Visits

OHSU-Legacy Cancer CollaborationCurrent Status

• Continue to see expansion of infusion volume • Gradual shift in referral pattern from For profit provider

network to collaborative• Building of trust between providers from the 2

organizations• Financially successful for both organizations• Interest from other organizations about potential

inclusion in the collaboration• How do you include new members

0%

35%

70%

105%

140%

FY 2014 FY 2015 FY 2016

Annual Collaborative Net Income

OHSU-Legacy Cancer CollaborationCurrent Status

• Continue to see expansion of infusion volume • Gradual shift in referral pattern from For profit provider

network to collaborative• Building of trust between providers from the 2 organizations• Financially successful for both organizations• Interest from other organizations about potential inclusion

in the collaboration• How do you fold new members into an existing

collaboration

Building a Regional Cancer Care Cooperative: Hospital Health System, Community Oncology Alignment

Mark J Krasna MDCorporate Medical DirectorMeridian Cancer Care

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Meridian Cancer Care

• Proposal to develop complete episode of care Bundles for regionally advanced non metastatic

• Starting w/ lung, breast, colon• Include multimodality therapy• Adherence to guidelines• Outcomes include-timeliness; reduced er/inpt adm• Greatest Challenge: Define beginning and end of

episode

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Horizon Blue Cross Blue Shield of NJ

• First foray into “bundled payments”• Episodes of Care (EOC) defined• Cancer: adjuvant breast, lung, colon

– Tx and Post Tx• Total cost of care vs. condition specific encounters• Using shared data to stratify patients

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Strategic, System-Wide Service Line Development

• Meridian Cancer Care:– system-wide service line executive / medical leadership– Branding strategy across the system:

“Meridian Cancer Care”– Program development/expansion

• disease site specific MDC teams• Surgical sub-specialization and tumor-specific programs• Spanning preventive, research, diagnosis and treatment services

through survivorship and end-of-life care– Facilities and technologies assessments– Obtain ACSCOC Network Designation (1st in NJ)

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Hospital-Community Alignment

• Core elements driving integration:– Quality/ all care under one roof– Patient experience/coordination of care– Keeping patients on the Jersey Shore– Facility expansion and technologies investment– Competition/ avoid outmigration– Financial integration – Informatics integration– Performance measures and outcomes reporting

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Physician Integration

• practices “re-think” their long-term strategic direction and consider alliance options

• each practice may elect to integrate in different form • condo/ lease space in the cancer center • seek employment• contract/ PSA model

• Promote high quality patient care and convenience• compliance with legal,regulatory / financially acceptable• Include all participating physicians into the CIN

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Medical Oncology- Part of CIN

• Employed group-three physicians-senior; mid; junior– Geographically isolated community private practice– 3 yr; Guaranteed base + incentive + Med dir– Practice has grown >20%; recruited mid level/4th MD

• 2 PSA Groups- one 5, one 3 person– Cover two hospitals each in system; exclusively HMH– Calculated $/RVU model for new and FU pts– Medical Directorships; Quality initiatives

• RCCA- 3 private groups in regional cooperative– value based purchasing and back office efficiency– Medical directorships; Contract for MDC; space lease

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Radiation Oncology- Part of CIN

• One large group; Exclusive arrangement with system– System owns technology/ Staff (physics/techs/ RN’s)– Upgrade technology (Varian Truebeam across the system w/ 2

SRS)– Medical Directorships – Standardize EMR/ QA process

• One small group isolated geographic area– Exclusive arrangement just completed (Staff etc)– Medical Directorship– Purchased / Upgraded technology– Varian Aria OS/EMR

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Surgical Oncology- Part of CIN

• Identified key areas of need• recruited into existing high quality groups (3) or• recruited large group to cover health system (10+)• Medical Directorships / nurse navigators• Standardize intake / one EMR• Quality improvement across the system• Lead MultiD Conferences and Clinics

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Benchmark Data: Compensation

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Compensation per wRVU

Survey SpecialtyNumber of Providers

25th Percentile Median

75th Percentile

Derived Cash Compensation per Work RVU $84.97 $86.61 $85.00

MGMA Hematology/Oncology 364 $69.60 $87.73 $106.64 AMGA Hematology & Medical Oncology 584 $62.86 $76.33 $95.87 Sullivan Cotter Hematology/Oncology with Infusion Services 249 $64.20 $77.14 $90.14

Wtd. Avg. Comp. per Work RVU 1,197 $65.19 $79.97 $97.95

Compensation as a Percent of Professional Collections

Survey SpecialtyNumber of Providers

25th Percentile Median

75th Percentile

Derived Cash Compensation as a Percent of Collections 123.5% 100.9% 85.4%

MGMA Hematology/Oncology 234 73.5% 109.5% 145.6%AMGA Hematology & Medical Oncology 65 71.3% 103.1% 133.2%Sullivan Cotter Hematology/Oncology with Infusion Services 55 54.6% 65.0% 89.4%

Wtd. Avg. Comp. as a % of Professional Collections 354 70.2% 101.4% 134.6%

Administrative Compensation

• Generally hourly compensation– Academic– Management (clinical co-management)– Medical directorship– Quality initiatives

• Compensation for Clinical Outcomes, Satisfaction• Develop benchmark for provision of quality care• ASCO Quality Oncology Practice Initiative

– Physician Quality Reporting InitiativeRange from $125 to $200+ per hour FMV

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Challenges to our Market in NJ

• MSKCC- Basking ridge, Monmouth (Middletown), Bergen (Montvale)

• MDACC- Cooper, Summit MG at Berkley• RWJ Barnabas Health- CINJ• Atlantic Health-• Virtua care- Penn Medicine• Atlantic Care- Fox Chase CC• JFK

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Expansion to Hackensack Meridian Health

• HUMC- and the John Thurer Cancer Center• Mountainside, Pallisades, Pascack Valley• Addition of Raritan Bay MC (PA and Old Bridge)• Possible merger with JFK• Currently over 11000 new cancer cases• Growth next year to 12,000 NCC

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Over two-thirds (70%) of the statewide population is within 15 miles of one or more Hackensack Meridian Health facilities

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Introducing our newPartnership

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• Common Clin pathways

• Joint research• One standard of

Cancer care• Future joint

ventures in NJ• Over 30,000 NCC

per yr

Benefits of Hospital-Oncologist Integration

• Service Line Expansion• Improved Integration and Care Coordination• Integration with Other Oncology Specialists• Improved Operational Efficiency and Reduced

Cost• Reduce outmigration for downstream• Potential Drug Cost Savings• Increased Accruals to Clinical Trials

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Building a Regional Cancer Care Collaborative: Structural Options

Presented by:Michael L. Blau, Esq.Foley & Lardner LLPmblau@foley.com617-342-4040

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Select Structural Options for Regional Cancer Care Collaborative

• Affiliation Agreement/Regional Cancer Council• Contractual or Equity JV/Financial Consolidation• Hospital Within A Hospital• RT Joint Venture Technical Service Company• New JV Cancer Facility• Align Oncologists Through Employment/PSA or other

alignment strategies

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Affiliation Agreement

Notes• Oncology services provided under separate licenses of affiliated hospitals and medical groups,

and billed separately: no economic alignment• Oncology program may be co-branded with a common name• Council establishes clinical and operational standards for co-branded oncology program• No license/CoN process implicated• Antitrust pricing, market allocation, and data exchange constraints

AMC/Community Hospital

HospitalAffiliate(s)Affiliation

Agreement

Oncology Groups

Regional CancerCouncil

o Representation of stakeholderso Coordinated planning and services

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Equity JV/Financial Consolidation

Notes• Financial consolidation and equity in ManageCo limited to affiliated hospitals (not oncologists)• Oncology services provided under separate licenses and billed under provider numbers of affiliated

Hospitals and oncology groups• Equity in ManageCo based on relative value of contributions• Certain centralized management services for oncology service lines• ManageCo co-manages oncology program (through ManageCo governance process)• Oncology program may be co-branded with common name• No license/CoN process implicated (unless major equipment is transferred to ManageCo)• No HSR filing unless more than $78.2 million of value contributed

AMC/Community Hospital

HospitalAffiliate(s)

ManageCo

Ownership

o Hospitals contribute oncology staff/certain equipment

o Financially consolidate oncology operations

Management Services

StrategicAffiliation

Agreement

Pooled Oncology P&Ls

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Hospital Within a Hospital

Notes• License and CoN (in CoN states) required for hospital within hospital• Tenant hospital has to meet physical separation standards (separate entrance, waiting area, staff, etc.)• Oncology services provided under license and billed under provider numbers of tenant hospital • Tenant hospital pays lessor hospital fair market value for space and other support services provided by

lessor hospital • Oncology program may be co-branded

AMC/Community Hospital

HospitalAffiliate

Hospital Within Hospital Affiliate

Ownership/License

Hospital within hospital affiliate space

Hospital affiliate provides space, and possibly equipment and/or staff

Space lease/support services

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RT JV Technical Service Company

Notes• Model cannot be used for medical oncology services• New sites or upgrade v. just existing sites/services• Stark: LLC cannot “perform” the RT services (e.g., oncology group needs to employ RTs); exclusive

use of space (problematic for inpatient services, provided under arrangements?)• Constraints on non-profit/for-profit JVs; Rev. Proc. 97-13/2014-66 constraints• Technical Services Agreement payment must be FMV, • Regulatory approval for transfer of ownership of LinAccs?

Technical Management

LLC

OncologyGroup

AMC/Community Hospital

Hospital Affiliate(s)

Payors

$

Technical ServiceAgreement

o License spaceo RT equipmento Leasehold

improvementso Non-clinical staff

Physician office rates

ROs/RTs

OncologyGroup(s)

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New JV Cancer Facility

Notes• Cannot be Medicare provider-based (HOPD) unless on campus of one of the JV hospitals• New license and CoN (in CoN states) needed

• License as new hospital or free-standing clinic• Could be physician office model (in certain states) or IDTF/radiation Therapy Center paid at

physician office rates• Oncology services provided under license and billed under provider numbers of new free-

standing cancer facility• Owners share profit/losses from operations• Can be co-branded

AMC/Community Hospital

HospitalAffiliate(s)

Separately licensed oncology facility

Cancer Facility

Ownership Hospital(s) contribute oncology staff/certain equipment

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Aligning Oncologists: Hospital Provider-Based Conversion

Notes• FMV for assets and Onc Group retains cash and A/R• PSA on fair market wRVU or fixed compensation basis (with performance incentives)• MSA on budgeted cost plus FMV mark-up or fixed fee FMV basis• Billing services at fair market percentage of collections or fixed fee per claim?

MSA/Billing Agreement

Affiliated Hospital

Payors

Oncology GroupOncology Sites/Service Line

Hospital provides:o Licenseo Provider-based statuso Space/equipmento Nurses/techs (off-campus)

$

Group provides:o Physicians/NPs/PAso Non-clinical staffo Nurses/techs

(on-campus) o Management

services?

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Building a Regional Cancer Care Collaborative: Clinical Trials and Research Collaborative

Presented by:Lennie Sender, M.DSenior Vice PresidentPediatric & Young Adult Cancer Medical AffairsNantKwest

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