Research has established that the availability and use of oncology biosimilars may play an essential role in managing risk for providers participating in value-based payment (VBP) models. However, the impact of biosimilar substitution on risk to providers remains uncertain, as prior researchers have embraced a generic budget impact approach.

By applying simulation approaches to model the quantitative methodology (e.g. episode framing, pricing, risk adjustment) of Medicare’s Oncology Care Model (OCM), Dr Jingyan Yang, Columbia University, New York, NY and colleagues assessed the effect of biosimilar substitution on financial risk to providers in oncology VBPs. 

In this assessment, patient demographic and utilization data to fit the models were drawn from the Medicare Limited Data Set (LDS). Risk was defined as total cost of care (TCOC) relative to target price for an episode per the OCM methodology. Target prices were projected using the most recently available OCM risk adjustment coefficients (2020). 

Biosimilars for oncology agents investigated included bevacizumab, rituximab, trastuzumab, epoetin alfa, filgrastim, and pegfilgrastim (hereafter biosimilar investigation agents – BIAs). Episode TCOC was calculated under the assumption of the use of reference BIAs and was then recomputed after biosimilar substitution. 

The study population was comprised of 1,620 episodes framed per the OCM methodology utilizing the most recently available LDS data (2019-2020) that had use of a BIA. The impact to provider groups was estimated by calculating the change in OCM risk bands (incentive payment earned/ neutral/ payment owed back to Medicare) linked with biosimilar substitution in panels of 100 randomly selected episodes from the study population over 10,000 simulation runs.

In the base model, researchers believed that substitution for antineoplastics would occur only in treatment naïve patients and that substitution for supportive therapies would occur for all eligible patients. 

By analyzing longitudinal LDS data from 2016-2020 for beneficiaries from the study population, treatment naïve status was evaluated.

The researchers revealed that biosimilar substitution resulted in an average decrease in cost relative to target of almost $1,200 per eligible episode and reduced the percentage of practices that were above benchmark for eligible episodes by 33% and augmented the number of practices below target for eligible episodes by 42%. Additional scenario analyses indicated that adoption strategy was a major factor of potential impact. They also noted that if assumptions of antineoplastic substitution necessitating treatment naïve status were eased, costs savings relative to target would go from $1200 per eligible episode to $2700.

The authors wrote, “Biosimilar substitution significantly reduces aggregate provider risk in OCM, representing a significant potential intervention for providers to mitigate risk in oncology VBPs both in terms of absolute costs saved relative to target and reduction in risk band relative to payer projections.”

Resource:

Yang J, Chaudhry B, Yue A, et al.  Projected impact of oncology biosimilar substitution from the perspective of provider risk in value-based oncology payment models. Abstract presented at: ASCO Annual Meeting; June 3-7, 2022; Chicago, IL, and virtual. Abstract e18836.