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CMS Bundled Payment Program Re-Opens, But What Should You Include In Those Bundles?

Tuesday, February 25, 2014

Michael Taylor imageDid you miss out on enrolling in one of the Centers for Medicare & Medicaid (CMS) Bundled Payment programs? You’re in luck. The CMS recently announced that they are offering another chance for new participants to enroll in its Bundled Payment for Care Improvement (BPCI) program.

The aim is to provide financial incentives to all providers of care — hospitals, doctors, and post-acute care providers — encouraging them to work together. This represents the ongoing CMS trend of developing new payment models that move away from fee-for-service. The agency also hopes that increasing the scope of the program will result in a richer data set that would improve its evaluation of the new payment models.

There are four basic models of bundled payments, although the re-opening is only accepting enrollment in models 2-4; not model 1:
  1. Acute care inpatient stay — similar to traditional Medicare payment model. In this model, all participants agree to accept a discount from the standard payment, but there can be gain sharing if collaboration reduces costs. Physicians are paid on a reduced Medicare level, but under fee-for-service rules, and hospitals are paid under the DRG system.
  2. Inpatient stay plus post-acute care for 30, 60, or 90 days post-discharge. Each bundle is assigned a certain predetermined payment level, and compared to actual costs.
  3. Post-acute care stay. In this model, the bundled payment is for the skilled nursing facility or long-term acute care only, not the inpatient stay.
  4. Acute care stay only. In this model, CMS pays a lump sum to the hospital for all services provided, including physicians.
This payment methodology is similar to capitation in that it shifts varying degrees of the financial risk to the providers of care and incents better oversight of the care. Under this arrangement, providers are incentivized not to provide unnecessary tests or procedures.

What to Include In the Bundles
One of the challenges with bundled payments is deciding what to include in the bundle — there are 48 different chronic conditions that can be included in the bundled methodology! At Truven Health Analytics™, our teams have done considerable work in defining how to construct these bundles. Our researchers have worked on bundles covering coronary artery bypass, heart valve replacement, defibrillator and pacemaker in-plants, and joint replacements, so Truven Health is well-positioned to support this new opportunity. Truven Health has very strong references and demonstrable expertise in this arena, as we have helped several other clients in the application and ongoing measurement for the program. We offer a well established set of services and deliverables that have been successfully delivered to multiple clients.

Re-opening the opportunity for new participants at this time will expand the breadth of these programs. There are currently 61 sites across the country participating, and gathering more data on outcomes will be fundamental to evaluating its success. CMS continues to drive fundamental changes in payment reform, helping to transition away from the waste and excesses driven by fee-for-service. Will you decide to participate?

Michael L. Taylor, MD, FACP
Chief Medical Officer