Controversial Changes to Cancer Payment Scales

March 6, 2017

Each year in the United States approximately $100 billion is spent on cancer care, with the average patient receiving chemotherapy spending in excess of $100,000 annually. That treatment represents a yearly double-digit cost increase for insurers that some large companies, including UnitedHealthCare and Aetna are trying to address.

On October 20, 2010, UnitedHealthCare announced a one-year pilot project with five oncology practices to test a new reimbursement fee structure. Essentially the goal is to pay a little more for standard treatment in order to pay a little less for experimental and unproven therapies.

Oncologists who follow a standard treatment protocol will be rewarded for doing so over more individualized courses of therapy, a cost cutting move the insurer insists is not an attempt to ration care, but to protect patients from exhausting and debilitating treatments with no proven benefit that are, unfortunately, highly lucrative for the doctor.

Estimates suggest that many oncologists make more than half their income on the difference in what they pay for chemotherapy drugs and what they charge their patient’s insurer for those treatments. This problem has not been addressed said Dr. Lee Newcomer, the oncologist heading the UnitedHealthcare program, because “cancer care has been a bit of a sacred cow.”

Detractors, however, say that the program is moving dangerously close toward making chemotherapy decisions based on cost alone. Dr. David Eagle, an oncologist and president of the Community Oncology Alliance said, “We do not want to get into the realm where they are restricting treatments whey they are clearly indicated.”

Health care reform has, however, put all facets of the health care system under tremendous pressure to save money and more programs like UnitedHealthCare are being tried by regional insurance companies in several states including California, Washington, and Pennsylvania.