Dr Lee Newcomer Addresses the Differences Between UnitedHealthcare and CMS' Payment Models

Lee Newcomer, MD, MHA, private consultant, discusses the differences between UnitedHealthcare's pilot episodic payment model and CMS models.

Transcript

What are the differences between UnitedHealthcare’s pilot episodic payment model and CMS models?

Well, first and foremost this was a commercial population rather than Medicare. I think that’s critical because we used the drug margins as one of the ways to fund the episode payment. The margins are much smaller in Medicare because of the contractual rates that they pay.

Probably a second key difference is that, that model used a comparison group from the fee-for-service database. So [UnitedHealthcare] had been collecting clinical information on its commercial patients for almost 7 years. That allowed us to match patients in our pilot episode payment to the fee-for-service fairly exactly.

CMS just didn’t have that database yet but to their credit — they’re building it, and they will get there. But, in the first round they had to use a broader adjustment so rather than saying adjuvant breast cancer, it was just breast cancer. That’s an important difference because it does make the comparisons a lot more accurate to have the most accurate comparison database you can find.

How did UnitedHealthcare work with physician partners to utilize the results from the pilot episodic payment model?

Well the data is always fed back to the physician so we would have an annual meeting with them and bring the data back to them. What OCM I think is doing quite well —now that they have their systems worked out – is giving quarterly data back to the physicians so that they can use it to manage their processes. That’s important because timely data makes the chance of doing this successfully a lot better.