Development and Feasibility of Bundled Payments for the Multidisciplinary Treatment of Head and Neck Cancer: A Pilot Program

Purpose: Despite growing interest in bundled payments to reduce the costs of care, this payment method remains largely untested in cancer. This 3-year pilot tested the feasibility of a 1-year bundled payment for the multidisciplinary treatment of head and neck cancers.

Methods: Four prospective treatment-based bundles were developed for patients with selected head and neck cancers. These risk-adjusted bundles covered 1 year of care that began with primary cancer treatment. Manual processes were developed for patient identification, enrollment, billing, and payment. Patients were prospectively identified and enrolled, and bundled payments were made at treatment start. Operational metrics tracked incremental effort for pilot processes and average payment cycle time compared with fee-for-service (FFS) payments.

Results: This pilot confirmed the feasibility of a 1-year prospective bundled payment for head and neck cancers. Between November 2014 and October 2016, 88 patients were enrolled successfully with prospective bundled payments. Through September 2017, 94% of patients completed the pilot with 6% still enrolled. Manual pilot processes required more effort than anticipated; claims processing was the most time-consuming activity. The production of a bundle bill took an additional 15 minutes versus FFS billing. The average payment cycle time was 37 days (range, 15 to 141 days) compared with a 15-day average under FFS.

Conclusion: Prospective bundled payments were successfully implemented in this pilot. Additional pilots should study this payment method in higher-volume cancers. Robust systems are needed to automate patient identification, enrollment, billing, and payment along with policies that reduce administrative burden and allow for the introduction of novel cancer therapies.