UnitedHealthcare Tests Lump Sum Cancer Payments

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  • October 29, 2010
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UnitedHealthcare Group announced Oct. 20 that it is working with five medical oncology groups around the country to advance a new cancer-care payment model that “focuses on best treatment practices and better health outcomes for patients with breast, colon, and lung cancers.” The five medical practices participating in the one-year pilot have between 18 and 35 oncologists on staff and are based in Dayton, Ohio; Fort Worth, Texas; Kansas City, Mo.; Marietta, Ga.; and Memphis, Tenn.

The new approach reimburses participating medical oncologists upfront for an entire cancer treatment program. This new “bundled payment,” or “episode payment,” is based on the expected cost of a standard treatment regimen for the specific condition, as predetermined by the doctor, UnitedHealthcare said.
The oncologist is paid the same fee regardless of the drugs administered to the patient – in effect, separating the oncologist’s income from drug sales while preserving the ability to maintain a regular visit schedule with the patient. Patient visits continue to be reimbursed, and chemotherapy drugs are reimbursed at the manufacturer’s cost.
“By paying medical oncologists for a patient’s total cycle of treatment, rather than the number of visits and the amount of chemotherapy drugs given, this program promotes better, more patient-centric, evidence-based care with no loss of revenue for the physician,” said Lee N. Newcomer, M.D., UnitedHealthcare’s senior vice president, oncology. “Everyone wins: as oncologists share best practices from the program about which treatment regimens are most effective, we expect to see consistently improved patient outcomes.”
According to UnitedHealthcare, the cancer care payment is based on the amount of money the oncology group would make on drug profits using the difference between the group’s current fee schedule and the drugs’ costs. A case-management fee also is added to reflect the time and resources that the oncologist’s office spends managing the patient relationship. This new fee is paid by UnitedHealthcare on the first day the patient receives care from the medical oncology group.
The medical group is free to change their drug regimens at any time, but the cancer care payment does not change. As part of the pilot, office visits, chemotherapy administration and other ancillary services like laboratory tests are paid based on fee-for-service rates.
The upfront fee covers the standard treatment period, which is typically six to 12 months. In cases of cancer recurrence, the bundled payments are renewed every four months during the course of the disease, allowing the doctor to continue overseeing his or her patient’s care even if drug therapy is no longer effective.
Even though the UnitedHealthcare model essentially freezes payments, it may be a better approach, says Bruce Gould, M.D., medical director of Northwest Georgia Oncology in Marietta, Ga., one of the five participating practices.
“If I can maintain 2010 income for the rest of my career, I would be happy with that,” says Dr. Gould. “Our incomes are being squeezed because everyone is looking at our spread on our drug margins and saying these oncologists are making money on these margins, yet no one is taking into account” the additional, unreimbursed, services provided by doctors (Kaiser Health News).
In the pilot, each medical group must choose a standard chemotherapy regimen for each of the 19 clinical presentations and participate in performance reviews of their data with other participating oncology groups to help identify best practices. Treatment regimens are evaluated based on the number of emergency room (ER) visits, incidence of complications, side effects and, most importantly, health outcomes – determining which treatment regimens do the best job of helping to fight cancer.
Over the course of the pilot, the various treatment regimens selected by the medical groups will be evaluated to identify which are the most effective for a range of clinical presentations (e.g., physical signs and symptoms and diagnoses).
Cathy Levine of the Universal Health Care Action Network of Ohio, a patient advocacy group, said the program at first glance appears to be a step forward for patients and may control costs by reducing health care spending that doesn’t improve care quality. But, she added, such pilots ought to be subject to independent scrutiny (Dayton Daily News).
Source: UnitedHealthcare Group press release

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No Responses to “UnitedHealthcare Tests Lump Sum Cancer Payments”

  1. S. Thompson says:

    Where has Dr. Gould been there is little to no positive drug margin.
    Stephanie Thompson,CPC, CPCS
    Oncology Division Administrator

  2. S. Tardif says:

    One size does not fit all and should not be used in determining treatment plans for different patients.