Bundled Payments for Patients with Head, Neck Cancer Launched at MD Anderson Cancer Center

A pilot program at The University of Texas MD Anderson Cancer Center in Houston that bundles payments for patients newly diagnosed with head and neck cancer is gaining traction, and similar programs may soon be implemented elsewhere.

The novel plan, which began at the end of 2014, will see insurance company United Healthcare, based in Minnetonka, Minn., reimburse the hospital with a predetermined figure for a year of treatment. The payment would cover surgery, chemotherapy, radiation therapy, and all diagnostics. Through July 20, more than 30 patients have been enrolled in the program. All head and neck cancers, except for nasopharyngeal cancer, are eligible. Patients will be enrolled through the end of 2016.

“I think it’s going well,” said Randal Weber, MD, FACS, chair of head and neck surgery at MD Anderson and president of the American Board of Otolaryngology (ABOto).

Dr. Weber and Thomas Feeley, MD, head of MD Anderson’s Institute for Cancer Care Innovation, said that it’s too soon to expect data from the pilot program. But this early on, success comes simply from the effort of trying. “Whether we are achieving cost savings or not, what we’re really trying to test at this point is ‘Can we do this?’”

Dr. Feeley added, “I want to be very clear that this is more feasibility … and we will do the economic analysis. We’re hoping that in doing this all of our head and neck cancer [treatment] achieves the best outcomes at the lowest possible cost for all of the patients.”

The pilot program’s concept is simple: In today’s era of payment reform, where federal reimbursement is increasingly tied to quality and bundled payments rather than the traditional fee-for-service system, MD Anderson and United Healthcare are attempting to determine whether bundling payments up front can lower costs without impacting the quality of care delivery.

Neither MD Anderson nor United Healthcare will discuss how much the annual payments are. Some payments will be well north of $100,000, but not all, Dr. Feeley said.

United Healthcare agreed that it is too early to comment on results from the program; however, the organization appears optimistic. “While we won’t be extending this program to any other sites this year, United Healthcare does plan to develop episode payment pilot programs with other organizations this fall,” said Lee Newcomer, MD, MHA, the insurer’s senior vice president for oncology, genetics, and women’s health.