Health insurer Humana has contracted with 21st Century Oncology, a large Florida-based physicians group in what is believed to be a first-of-its-kind effort to bundle payments for radiation therapy services used to treat several common cancers. The physicians group will provide a defined set of treatments and procedures for a fixed price.
If successful, the effort could serve as a blueprint to help shift the costs of complex and expensive radiation therapy services from volume-based, fee-for-service charges to evidence-based treatment.
The bundling model already has a foothold in orthopedic procedures and is gaining acceptance in cardiology. Physicians and payers like the model because it can help stabilize revenue streams and payment structures.
Humana's three-year contract with 21st Century, effective Aug. 1, includes much of the national insurer's commercial and Medicare books of business, with the exception of its Medicare HMO business. Fort Myers-based 21st Century includes more than 250 facilities in 16 states and seven countries.
It employs or is affiliated with more than 500 physicians, including radiation oncologists and other cancer-related specialists such as urologists, medical oncologists, hematologists, gynecologic oncologists, and surgeons.
More than 130 employed radiation oncologists in 16 states are part of the Humana contract. While the precise number of patients covered under the contract is unknown, 21st Century's book of business with Humana involves more than one million patients.
The contract covers 13 of the most frequent diagnoses in 21st Century's practice, including cancers of the breast, lung, and prostate, as well as gastrointestinal and gynecological cancers, says Constantine A. Mantz, MD. He is the chief medical officer for the provider.
The bundles are based on ICD-9 codes and payment includes a very defined set of services, including patient consultation, the acquisition of CT scans and other imaging needed to plan the patient's radiation therapy, radiation dosimetry, treatment delivery, and follow up for 90 days.
21st Century has invested two years in the development of its bundling strategy. It worked with the Centers for Medicare & Medicaid Services to craft and refine a small number of treatment bundles for radiation therapy.
Among the challenges has been meeting payer expectations for reporting and transparency. The CMS experience helped the company sharpen its focus on delivering the specific measures and outcomes that payers want to see.
"The payer is looking for economic relevance," Mantz notes.
Based on its successful efforts with CMS, the company reached out to a number of commercial payers to replicate the bundling model. The Humana contract is the first result of that effort. Plans call for expanding the model to additional insurers.
As part of the Humana contract, 21st Century will track outcomes related to following the clinical care paths developed as part of the bundles. Mantz explains that each bundle includes radiation therapy services that have been identified as best practices through medical literature and consensus guidelines published by groups such as ASTRO, the American Society of Radiation Oncology.
In following the care paths, the physicians want to determine that the clinical outcomes are improving. One of the outcomes 21st Century wants to measure is the frequency of treatment interruptions related to the toxicity of radiation therapy.
Mantz explains, for example, that if a breast cancer patient has a significant skin reaction or other complication due to radiation therapy and has to stop treatment, the interruption could result in an unwanted outcome in terms of disease control.
Mantz says his group also hopes to simplify billing and payment on the provider and payer side by replacing the multiple filing and billing often associated with claims with a simple trigger that signals payment is due.
He adds that radiation therapy has a high number of codes associated with a course of care, which complicates the claims process. Radiation therapy for breast cancer can involve 20 to 25 different types of services, each with its own unique current procedure terminology (CPT) code. Bundling eliminates the need to obtain separate approval for each one.
The 13 bundles under the Humana contract cover about 80% of all of the diagnoses that are treated with radiation therapy. In the future, 21st Century wants to develop bundles that will be inclusive of every diagnosis and reduce the total number of bundles. The Humana contract includes some trial efforts to determine how the bundles can be more inclusive and simpler.
Humana did not respond to requests for information about its bundling program.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
