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Anthem, UnitedHealth experiment with value-based oncology payment models


More insurers are collaborating with providers in an effort to overhaul the entire oncology reimbursement system, making it more value-based and patient-centered to help reduce the need for expensive yet ineffective chemo drugs, reported AIS Health.

The problem, insurers say, is that cancer drugs aren't cost-effective. Although 13 new cancer treatments have been introduced since 2012, just one extended patients' survival rate by six months--yet their average monthly cost is almost $6,000--Jennifer Malin, medical director for oncology solutions and innovation at Anthem, said at a recent pay-for-performance conference.

That's why Anthem created its cancer quality program, which pays participating oncologists extra money for treatment planning and care coordination when they select a treatment regimen that is "on pathway" or matches Anthem's treatment guidelines, Malin said.

Although Anthem's program doesn't change how it pays oncologists for chemotherapy treatments, it rewards them for choosing approaches that are "on pathway" and pays a $350 per month care management fee.

That amount "essentially equalizes the difference" between what oncology practices earn in Anthem's program and what they would earn for higher cost, but not necessarily more effective, drug regimens, Malin said.

Meanwhile, UnitedHealth started an episode payment pilot in 2009 for oncology services that separated oncologists' incomes from drug sales, said Lee Newcomer, senior vice president for oncology, AIS Health noted. Along with five participating medical oncology groups, UnitedHealth established more than 60 quality and cost measures, including the number of emergency room visits and side effects, to determine whether the bundled payment program was achieving its goals, FierceHealthPayer previously reported.

An important aspect of UnitedHealth's bundled payment program was that the insurer only paid for drugs based on their average sales prices. "That draws a line in the sand--if a new drug comes out, we'll pay the drug at cost," but the oncology practice didn't receive any profit from the margin on the drug, Newcomer said.

During the pilot's first three years, oncologists treated 810 patients at a 34 percent reduction in total medical costs. "In fee-for-service, these 810 patients would have cost us $100 million. Here, they cost us just about $64 million--that's huge savings," Newcomer added.

To learn more:
- read the AIS Health article

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