WASHINGTON — One of the nation’s largest health insurers said Wednesday that it was testing a new way to pay for some cancer treatments, aiming to identify the best medicines and to limit doctors’ profits from dispensing in-office chemotherapy drugs.
UnitedHealthcare acted as insurers, employers and the government look to streamline costs by paying doctors and hospitals lump sums for an entire course of care, rather than fees for each service provided.
Payment for chemotherapy has been particularly controversial because some doctors, including oncologists, buy drugs at wholesale prices, dispense them by injection or infusion in their offices and charge insurers higher, retail prices.
A government report found that Medicare, for example, reimbursed doctors at least $532 million more in 2000 than doctors paid to buy medicines. In 2005, Medicare changed how it pays for in-office drugs, slicing payments to average sales prices plus 6 percent. A few private insurers followed suit.
A new approach
UnitedHealthcare takes a different approach. Its program, underway with five oncology practices in five states, pays lump sums for each course of chemotherapy for breast, lung or colon cancer. The payment is based on regimens the doctors draw up, plus case management fees.
It’s the first large foray into payment “bundling” for chemotherapy by a private insurer, although other insurers are testing the approach for hip and knee replacements, and Medicare will launch a program next year that combines drugs with dialysis services. The new federal health care overhaul also calls for such payments.
The insurer aims to “separate oncologists’ income from their drug selection” and to “start searching for the best practices and move to them,” said Dr. Lee Newcomer, United Healthcare’s senior vice president for oncology.
No losses for doctors
The lump sum is based on what the insurer was paying the doctors under the old rules, so no doctor is expected to lose money this year. “We’re drawing a line in the sand, keeping you at 2010 incomes,” Newcomer said. That sounds good to doctors, who say Medicare is squeezing them, and to some private insurers that adopted the same model as Medicare.
Oncologists say the Medicare model cuts into revenue they need to provide services that otherwise aren’t paid for, such as counseling patients. Some doctors respond by selecting more expensive drugs to boost revenues, sending some patients to hospitals for chemotherapy or closing their practices altogether.
Even though the UnitedHealthcare model essentially freezes payments, it may be a better approach, said Dr. Bruce Gould, the medical director of Northwest Georgia Oncology Centers in Marietta, Ga., one of the five participating practices.
“If I can maintain 2010 income for the rest of my career, I would be happy with that,” Gould said.
