New UnitedHealthcare Cancer Care Payment Model To Focus On Best Treatment Practices And Better Health Outcomes

  • First-of-its kind model bundles payments to oncologists to help ensure continuity of care for patients and improve quality and health outcomes
  • Pilot program to help identify best practices for breast, colon and lung cancer treatment
MINNETONKA, Minn. — 

UnitedHealthcare 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.

UnitedHealthcare’s first-of-its-kind program is aimed at improving the quality of care for patients with breast, colon and lung cancers, which are among the most common cancers in the United States, according to the National Cancer Institute.

This new approach, which reimburses participating medical oncologists upfront for an entire cancer treatment program, marks a shift away from the current “fee-for-service” approach, which rewards volume regardless of health outcomes. This new “bundled payment,” or “episode payment,” will be based on the expected cost of a standard treatment regimen for the specific condition, as predetermined by the doctor.

The oncologist will be 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 will continue to be reimbursed, and chemotherapy drugs will be 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.”

Under the current system, medical oncologists evaluate people with cancer to determine the extent of their disease and then recommend a specific treatment program that takes into consideration the stage and type of cancer. Treatment options include surgery, radiation therapy and chemotherapy, or a combination thereof. Most commonly used chemotherapy drugs are given intravenously and often are administered in a medical office. In most cases, the medical oncologist purchases the chemotherapy drugs at wholesale prices from manufacturers and administers them to the patient in his or her office. Under the current “fee-for-service” arrangement, the oncologist then bills the patient’s health insurance plan or payer for the retail price of the drugs, plus a charge for administering the drugs.

Pilot To Be Conducted with Five Medical Practices


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). UnitedHealthcare will play no role in determining which treatment plan the oncologists choose, but the intent of the pilot is to identify and reduce unnecessary drug administration that does not improve the patient’s health outcomes.

The five medical practices participating in the 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.

In the pilot, each medical group must choose a standard chemotherapy regimen for each of 19 clinical presentations and participate in performance reviews of their data with other participating oncology groups to help identify best practices. Patient health information is protected and blinded in compliance with HIPAA privacy regulations. The medical groups’ participation in the program means they are willing to compare their results with peers.

Treatment regimens will be evaluated based on the number of emergency-room visits, incidence of complications, side effects and, most importantly, health outcomes – determining which treatment regimens do the best job of helping to fight cancer.

UnitedHealthcare calculates the cancer care payment 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 is also added to reflect the time and resources that the oncologist’s office spends in 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 will cover the standard treatment period, which is typically six to 12 months. In cases of cancer recurrence, the bundled payments will be 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.

“The cancer care payment program is one of many UnitedHealth Group programs and services that help fight and manage chronic diseases in creative, practical ways to help improve access to quality health care for patients,” said Dr. Newcomer. “This new payment model is the latest UnitedHealthcare effort to improve quality through an innovative approach to patient care.”

About UnitedHealthcare
UnitedHealthcare (www.unitedhealthcare.com) provides a full spectrum of consumer-oriented health benefits plans and services to individuals, public sector employers and businesses of all sizes, including more than half of the Fortune 100 companies. The company organizes access to quality, affordable health care services on behalf of approximately 25 million individual consumers, contracting directly with more than 600,000 physicians and care professionals and 5,000 hospitals to offer them broad, convenient access to services nationwide. UnitedHealthcare is one of the businesses of UnitedHealth Group (NYSE: UNH), a diversified Fortune 50 health and well-being company. 

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New UnitedHealthcare Cancer Care Payment Model To Focus On Best Treatment Practices And Better Health Outcomes