Unit­edHealth­care deal may spur more bun­dled pay­ments in can­cer care

Modern Healthcare - - NEWS - By Bob Her­man

Two ma­jor pri­vate-sec­tor play­ers have launched a bun­dled-pay­ment model for can­cer care that could be a har­bin­ger of more value-based pay­ment ar­range­ments in a wide range of clin­i­cal ar­eas.

Unit­edHealth­care, a sub­sidiary of Unit­edHealth Group, and the Univer­sity of Texas MD An­der­son Can­cer Cen­ter in Hous­ton last week an­nounced a three-year deal in which the in­surer will pay MD An­der­son a fixed an­nual amount for the care of up to 150 pa­tients with cer­tain types of head and neck can­cer.

The pro­gram will cover eight dif­fer­ent bun­dles of care, which will dif­fer based on the types of care pa­tients need. MD An­der­son will not re­ceive in­creased pay­ments for pa­tients who ex­pe­ri­ence com­pli­ca­tions and need ad­di­tional treat­ments.

“There’s so much in­ter­est in this,” said Kimberly Crow Harts­field, a se­nior man­ager at the Cam­den Group, a con­sult­ing firm. “There’s so much spend in on­col­ogy and so much vari­a­tion in the care de­liv­ery that takes place.”

The pi­lot pro­gram, which is be­ing closely watched by other in­sur­ers and providers, is part of Unit­edHealth­care’s con­certed push to­ward more value-based pay­ment mech­a­nisms. The in­surer has about $36 bil­lion in an­nual provider pay­ments tied to some kind of riskbased ar­range­ment.

Unit­edHealth­care of­fi­cials said they want more bun­dled pay­ments for can­cer care be­cause on­col­ogy and re­lated drug costs rep­re­sent 11% of the in­surer’s com­mer­cial health­plan spend­ing. Only pa­tients with em­ploy­er­spon­sored health plans will be en­rolled in the MD An­der­son pro­gram.

“Our part­ner­ship with MD An­der­son Can­cer Cen­ter marks an im­por­tant step to­ward ex­panded bun­dled-care pay­ment mod­els and away from the tra­di­tional fee-for-ser­vice pay­ments for on­col­ogy care,” said Dr. Lee New­comer, Unit­edHealth­care’s vice pres­i­dent of on­col­ogy ser­vices, in a writ­ten state­ment.

MD An­der­son of­fi­cials were quoted in the Wall Street Jour­nal as say­ing they want to test the fea­si­bil­ity of bun­dled pay­ments and may use them for other types of can­cer.

Bun­dled pay­ments are an al­ter­na­tive pay­ment model en­cour­aged by the Pa­tient Pro­tec­tion and Af­ford­able Care Act and are be­ing tested for a va­ri­ety of dif­fer­ent ser­vices. Medi­care’s Bun­dled Pay­ments for Care Im­prove­ment pro­gram has re­ceived wide­spread in­ter­est among providers.

Pri­vate in­sur­ers in­clud­ing Aetna and Blue Cross and Blue Shield plans also have cre­ated bun­dled-pay­ment ar­range­ments with hos­pi­tals. And large self-in­sured em­ploy­ers such as Gen­eral Elec­tric Co. have es­tab­lished di­rect bun­dled-pay­ment con­tracts with providers.

Medi­care does not yet have any bun­dled pay­ments for can­cer care.

Most cur­rent bun­dled deals be­tween pri­vate in­sur­ers and providers in­volve ortho­pe­dic or car­dio­vas­cu­lar pro­ce­dures, since those ser­vice lines tend to have higher vol­umes and more fixed costs.

But Hu­mana and 21st Cen­tury On­col­ogy have a bun­dled-pay­ment agree­ment for ra­di­a­tion ther­apy ser­vices. Hori­zon Blue Cross and Blue Shield of New Jersey also has a fixed, episodic pay­ment deal with a re­gional can­cer prac­tice for breast can­cer pa­tients, which started in Oc­to­ber.

“We’re go­ing to see more and more of what we see as con­di­tion-based bun­dles, as op­posed to the pro­ce­dure-based ones,” said Fran­cois de Brantes, ex­ec­u­tive di­rec­tor of the Health Care In­cen­tives Im­prove­ment In­sti­tute. “You look at where pay­ers spend their money, and it’s in far longer time- frame episodes,” such as those in­volv­ing chronic con­di­tions, he said.

Unit­edHealth­care of­fi­cials think sub­stan­tial sav­ings can be achieved with more stan­dard­ized can­cer care. The in­surer re­leased a study this past sum­mer that showed fixed pay­ments for 810 pa­tients with breast, lung and colon can­cers saved more than $33 mil­lion over three years.

“This was a pretty dra­matic change,” New­comer said at the time.

With 1.6 mil­lion peo­ple di­ag­nosed an­nu­ally with can­cer in the U.S., half of them Medi­care pa­tients, in­sur­ers and providers see po­ten­tial in bun­dled pay­ments if they lead to bet­ter qual­ity.

Medi­care is de­vel­op­ing an on­col­ogy-care model that would pay providers for episodes of can­cer care.

“You’re go­ing to see con­tin­ued ex­pan­sion,” Harts­field said. “All pay­ers are in­ter­ested in pro­gres­sive physi­cian and hos­pi­tal groups that are look­ing to elim­i­nate the vari­a­tion and pro­vide very pa­tient-cen­tric care.”

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