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Oncology Bundling Model Aims to Incentivize Doctors

News  |  By Gregory A. Freeman  
   March 15, 2016

Bundling reimbursements for cancer treatment uses evidence-based protocols and outpatient clinics, and is intricately related to improving outcomes.

This article first appeared in the March 2016 issue of HealthLeaders magazine.

The considerable cost of oncology care represents a challenge as the healthcare industry faces increasing pressure to cut costs. Bundling cancer care is emerging as a way to provide quality care for less money, but that will require significant changes to the traditional approach to cancer care, according to some healthcare leaders at the forefront of this initiative.

Signaling the government's desire to bring down the cost of cancer care, the Centers for Medicare & Medicaid Services recently announced the Oncology Care Model, which aims to incentivize cancer doctors to reduce hospital and pharmacy costs. Starting in 2016, the cancer payment model will pay qualifying oncologists $160 per month for six months for each beneficiary receiving chemotherapy. But oncology clinics and hospitals will be required to make certain changes to the way they meet patient needs, including providing round-the-clock outpatient clinics to manage common drug therapy complications that might otherwise send their patients to the hospital.

Most of the changes are intended to make oncology more patient-centered, because successfully bundling reimbursement for cancer treatment is intricately related to improving outcomes, which in turn requires better patient integration in the care plan.

Using evidence-based protocols and including patient measures of quality of care, the model also incentivizes surgeons, radiologists, and primary care providers to improve communication and coordination, further reducing costs as a result of better care coordination. Lancaster (Pennsylvania) General Health/Penn Medicine has applied to the CMS demonstration project, and Randall Oyer, MD, medical director of the oncology program at Lancaster General's Ann B. Barshinger Cancer Institute, says the CMS project exemplifies the right way to approach cancer care in the future because it is more patient-centric.

"We thought that one-third of the changes required for being compliant with the project we had already accomplished, and another third we were already developing," he says. "Only a third of the changes would be new work for us."

One of the most significant changes in oncology care at LGHealth/Penn Medicine has been the move toward a care team in which the physician is only one member working with other professionals who are equally important, Oyer says. They include the oncology nurse, oncology nurse navigator, chaplain, social worker, and financial counselor. LGHealth/Penn Medicine is a 630-licensed-bed nonprofit health system with a comprehensive network of care encompassing Lancaster General Hospital and Women & Babies Hospital as well as a 300-member physician practice.

Success key No. 1: Probe deeper for patient input
Another strategy at ABBCI is to conduct distress screening for cancer patients at regular intervals, which Oyer says gives the patient an opportunity to voice any concerns about financial, social, spiritual, or physical needs. In addition, LGHealth/Penn Medicine has developed a process for making advance care planning a standard of care in oncology.

"We've changed our thinking from 'Something could happen, so you should think about end-of-life planning,' " Oyer explains. "We turned that around to a positive approach that says, 'We want to take care of you in a way that's compatible with your wishes, so we need to know what your wishes are.' That opens it up for the patient to tell you what they want."

LGHealth/Penn Medicine emphasizes to patients that they have a say in the care they receive. That message also is stressed to staff, who are encouraged to have the patient "teach back" to ensure understanding. The hospital is exploring options for decision-making aids for patients and improving the informed consent process so that the care team can be confident the patient truly understands the options.

Research suggests that improved patient education leads to more conservative treatment choices, Oyer notes.

More direct conversations with the patient also can improve care and outcomes, notes Michael Steinberg, MD, chair of radiation oncology at UCLA's David Geffen School of Medicine in Los Angeles and director of clinical affairs for the Jonsson Comprehensive Cancer Center at UCLA. A good example, he says, are women undergoing breast conservation. They are among the healthiest people in any oncology clinic because they are not sick, or many are not receiving chemotherapy, so the patient's chart usually reflects that the doctor asked how things are going, and the patient said everything was fine.

Steinberg's clinic began using a formal questionnaire and received different answers.

"When you actually ask the patient in a more structured way, with a validated instrument, you'll find out that the patients are suffering increasing fatigue over the five or six weeks of treatment, plus the anxiety and depression that is expected with a cancer diagnosis," says Steinberg. "Having that information helps us direct their care more effectively, and that has to be a part of any approach to improving value in oncology."

Success key No. 2: Collect more data
Steinberg and his colleagues also developed a database that includes not just the usual demographics about the patient and treatment, but also patient-reported outcomes. By linking those patient-reported outcomes back to the radiation doses used in treatment, the clinicians were able to establish a link that had never been documented before, he says.

"A real-time database that includes patient-reported outcomes becomes a powerful management tool, not only in improving the quality of care for the individual patient, but also in improving our technical expertise with all patients," Steinberg says.

LGHealth/Penn Medicine also began collecting more data to support patient-centered care decisions and cost savings.

"We're collecting more up-front data which risk stratifies the patient and may help us predict and preempt a need," Oyer says. "The initial reaction from the staff is that all the changes and data collection is a lot of work, but our experience has been that if you look at your workflow and everyone is working at the top of their license, implementing these new initiatives doesn't take as much time as you think."

With oncology reimbursement undergoing a paradigm shift, there are different options for bundling and alternative payments, notes Debra Patt, MD, MPH, MBA, a practicing oncologist specializing in breast cancer, and medical director of outcomes research for the US Oncology Network, a physician-led organization of integrated, community-based oncology practices. The organization, which is supported by McKesson Specialty Health, is based in Woodlands, Texas, and has nearly 1,000 physicians in 350 centers of care. The common theme among all the options is the need for data, Patt says.

With bundling and evidence-based protocols taking a more prominent role in oncology, healthcare organizations will need more than outpatient data, she says. The data will need to reflect the continuum of care, particularly the largest drivers of oncology costs—drugs, acute care, and end-of-life care.

"In too many cases, the questions about what the patient with a terminal cancer wants goes unasked," Patt says. "End-of-life care can become a major cost driver in oncology, and many times it's because no one asked what the patient wants and the default policy is to do the most aggressive medical intervention. That's probably not in the best interest of the patient and definitely not the best approach for controlling costs."

Success key No. 3: Choosing the right bundle
In response to the increasing focus on the cost of care, some healthcare institutions are developing their own bundling programs with payers. Thomas W. Feeley, MD, head of the Institute for Cancer Care Innovation at MD Anderson Cancer Center based in Houston, has worked with United-Healthcare to develop eight different bundled payment models for the research-based clinical practices and protocols that have been created and refined over decades at MD Anderson, which sees more than 33,000 new patients a year.

Last year, MD Anderson and UnitedHealthcare launched a pilot to explore a bundled payment approach versus the traditional fee-for-service. The three-year project focuses on quality patient care and outcomes in head and neck cancers, bundling all the care for a year's worth of newly diagnosed patients with those cancers.

"We cover everything that could happen to those patients at MD Anderson, so it includes radiation therapy, surgery, chemotherapy, any diagnostic tests, follow-up visits, hospitalization, operating room costs, ICU—whatever they need as long as it happens at MD Anderson," Feeley explains.

There are four bundles to choose from, based on what the physician and patient select as their treatment plan. The bundles range in price for relatively simple treatment like surgery alone, to progressively more complicated treatments. The most expensive bundle is the patient receiving surgery, radiation, chemotherapy, and plastic surgery reconstruction.

Each of the four bundles also has a factor built in for patients who have two or more comorbidities, based on the Charlson Comorbidity Index, a method of categorizing comorbidities of patients based on International Classification of Diseases diagnosis codes. Clinicians at MD Anderson do not know if their patients are in a bundle.

The payers agreed to a stop-loss if MD Anderson encounters any extraordinary outliers in a patient's care. One year in, the pilot has 50 patients enrolled. None of them has completed a full year of treatment, but Feeley says the initial experience is encouraging.

"The biggest surprise is that claims management is more complicated than automated fee-for-service payments," he says. "These bundles have to be done outside of the traditional fee-for-service claims management, so the process on their side and on our side is manual, and that does pose more of a challenge."

Success key No. 4: Know your costs
Any bundling effort comes with the fear of discovering down the road that you negotiated too low a price for the care provided, but Feeley says so far there is no indication of that at MD Anderson. However, he stresses the importance of knowing your costs for care before entering into bundling agreements.

"If you don't really know your costs of delivering care, it's hard to sit down at the negotiating table and develop a fair price," Feeley says. "Institutions need to do a better job of figuring out what their costs of care are, for whatever they're going to bundle."

Oyer also notes that bundling requires striking a balance between cost and efficiency of care. Cost savings can never override the need for quality care, but the key decisions about what treatment is truly effective and worth the expense can only be made when the right data is available, he says.

Success key No. 5: Prepare for performance measures
Even if an oncology bundling program does not include performance measures from the outset, Feeley says healthcare providers should factor them into the long-range picture. Performance measures are being tied more and more to reimbursement, so any successful bundling program probably will have to meet performance measures in the future, he says.

"We are on the right trend here," Oyer says. "My colleagues here at the clinic are excited to see this move toward care that is more patient-centered. We want to control costs, and if we can make those decisions based on what works best for the patient, everyone can be comfortable about the changes that have to be made."


Gregory A. Freeman is a contributing writer for HealthLeaders.

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