As federal policymakers continue to accelerate reforms in healthcare financing, more hospitals, nursing homes and other healthcare providers are beginning to enter into Medicare's bundled payments initiative.
The bundled payments initiative, launched in 2013 as part of the Patient Protection and Affordable Care Act, aims to guide the shift from fee-for-service systems of reimbursement, which many believe increase spending waste and unnecessary tests and procedures, to value-based pay. Under bundled payments, healthcare providers take on the risk of providing all of the necessary care a patient will need during a care episode for one set price.
At the Becker's Hospital Review 6th Annual Meeting, Valinda Rutledge, former Center for Medicare & Medicaid Innovation Center senior leader and current CEO of Rutledge Healthcare Consulting, moderated a panel discussion on the future of bundled payments with Pamela Pelizzari, former CMMI technical advisor and current healthcare consultant at Milliman, Kelsey Mellard, vice president of payment and delivery reform of naviHealth, Mark Hiller, vice president of innovative solutions at Charlotte, N.C.-based Premier and Tommy Carlisle, former CFO of Medicaid for Arkansas and current associate director of Navigant Consulting.
Here are four key takeaways from their discussion.
1. The oncology care bundled payments model. As part of the overall goal of bundled payments to contain the rising costs of healthcare and improve quality, CMS is launching an oncology payment model with participating oncology practices and independent practitioners in a five-year test beginning in 2016.
"This model is extremely different than most of the bundled payment models we've seen with private insurers in terms of who is eligible for what and what is included," said Ms. Pelizzari. "CMS has said any patient who has chemotherapy can be included in bundles, meaning every treatment a cancer patient undergoing chemotherapy receives is included — inpatient, outpatient and even some Medicare Part D services."
However, according to Ms. Pelizzari, CMS has largely remained silent on how the program will be risk-adjusted, but she anticipates it will take a broad actuarial risk perspective. However, the hope is that hospitals will find effective solutions for cancer patients with alternative therapies to avoid unnecessary admissions and reduce costs. The goal is to achieve better patient management and identify and prevent avoidable complications.
2. The retrospective acute and post-acute care bundled payment model. In the second model in The Bundled Payments for Care Improvement initiative, the episode of care includes the inpatient stay in the post-acute care hospital and all related services during the episode, including the 30, 60 or 90 days after hospital discharge.
According to Ms. Mellard, one of the core components essential to managing the post-acute care bundled payments model is using data analytics to determine which patients will use post-acute care treatment. Across post-acute care sites, there is a variety of tools to collect patient information.
The Impact Act, which requires the specification of quality measures for the Long-Term Care Hospital Quality Reporting Program, standardizes tools so they are completely synergistic with one another. The Impact Act will hit the ground with post-acute care providers, such as nursing and home care providers, in 2016, according to Ms. Mellard.
3. The ambulatory care bundled payment model. "With regard to ambulatory bundles, it's the logical next step with the growth of the outpatient side of volume and revenue in the non-hospital setting," said Mr. Hiller. "More and more procedures and care are being delivered on the outpatient side."
Additionally, some of the services being bundled on the inpatient side, such as percutaneous coronary interventions and joint procedures, are being performed on the outpatient side. When those inpatient procedures start to dwindle and more people shift to the outpatient setting, the differences between the two start to blur, according to Mr. Hiller.
4. What do hospitals and practices need to be successful with these models in the future? Two issues healthcare organizations commonly encounter with bundled payments are fully understanding the prices included and obtaining access to information about the patients they are taking on risk for, according to Ms. Pelizzari.
A key opportunity for health systems under bundled payments will come from establishing new relationships with the community. "Organizations should rely on and bring in community-based organizations, because they know more about your patients than anyone else," said Ms. Mellard. "Bring in churches, agencies that help with child care and families. Include physicians in the conversations, too."
While making the changes — both financial and cultural — necessary to succeed under bundled payments is difficult, these changes are also forcing providers to look at the episode of care from the patient's point of view.
"Change is tough, but we all know this wave of change has already started," said Mr. Carlisle. "The move from volume to value is there."