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Bundled Payments for Oncology

Cora Nucci, for HealthLeaders Media, March 16, 2011
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In a nod toward ACOs, UnitedHealthcare is testing a payment model designed to advance better medical outcomes in the treatment of certain cancers.

One of the tenets of the fledgling accountable care organization is the concept of bundled payments, which replaces the current fee-for-service model of provider reimbursements. Another is the concept of exercising best treatment practices in pursuit of better health outcomes.

On January 1, the Centers for Medicare & Medicaid Services began providing a single payment to providers for outpatient dialysis treatment, supplies, related clinical laboratory tests, and certain related drugs, setting a course that others are beginning to follow. 

UnitedHealthcare, for example, is testing a payment model designed to advance better medical outcomes in the treatment of certain cancers. UHC’s Cancer Care Payment Program reimburses participating oncologists up front for an entire cancer treatment program.

The program is limited to chemotherapy treatments for colon, breast, and lung cancers of all types and at all stages. These were chosen for the program because they are among the most common, costly, and aggressive cancers. 

Here’s how the program works:

UHC calculates the cost of a patient’s cancer care based on how much the oncology group would take in on chemotherapy drug profits, using the difference between the group’s current fee schedule and the cost of the drugs. Then a case-management fee is added. Office visits, chemotherapy administration, lab fees, and other related services are paid based at fee-for-service rates.

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