BUSINESS CONSULT
DEIRDRE BAGGOT, PHD, MBA, RN,
Former Expert Reviewer, Bundled Payments for Care Improvement Initiative at CMS
Former Lead, CMS Acute Care Episode (ACE) Demonstration
Principal, ECG Management Consultants
CMS is Upping its Bet
on Bundled Payments
S
ince the introduction and rollout of the Affordable Care Act, The Centers for Medicare
and Medicaid services has sharpened its
focus on bundled payments as a viable and sustainable alternative to the costly fee-for-service reimbursement model. For instance, in 2011, CMS introduced a
bundled payment program for end stage renal disease.
However, recent developments are giving us insight
into how heavy CMS is betting on bundles. In recent
weeks CMS announced that it is extending the Bundled
Payments for Care Improvement Initiative (BPCI) for
an additional 2 years. Originally a 3-year pilot that was
scheduled to complete later this year, the BPCI program
now continues through the fall of 2018. What’s more,
on April 1, 2016, the first mandated bundle in orthopedics, the Comprehensive Care for Joint Replacement
(CJR) model, went live. Simultaneously, awardees have
been selected for the Oncology Care Model (OCM), a
new bundled payment program in CMS’s portfolio. So,
why is CMS upping the ante? The Commonwealth fund
estimates that bundled payments will save CMS $19
Billion between 2010 and 2019.
Bundled Payments and MACRA
A few weeks ago CMS published the final rules for
the Medicare Access and CHIP Reauthorization Act
of 2015 (MACRA). With MACRA, there are two
different reimbursement tracks, the Merit-Based
Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Within this new
framework, bundled payments fall under APMs;
however, it is important to note that not all bundled
payments are considered “qualifying” APMs. For
example, the OCM (Oncology Care Model) bundled
payment program has two models, one that poses
upside risk and another that includes downside
risk. Only the down-side risk OCM construct is
considered a “qualifying APM.”
This tells us that cardiology practices will need to
put some skin into the game when designing bundles
for CV services (such as CRM, CABG, and CHF) if
they want to be eligible for additional incentives within
the APM track. While most reimbursement to physicians beginning in 2019 will fall under the MIPs track,
physicians and physician groups will be eligible for
additional incentive payments for their participation in
APMs, including Bundled Payments and the Medicare
Shared Savings. The take-home message for cardiologists is that smart organizations are working now
to develop the programs and infrastructure to drive
predictable cost and quality outcomes, thereby making
the most of value-based reimbursement models.
The True Value of Bundles
With bundles, the cost-cutting benefits are quite
clear. CMS receives an up-front discount of 2–3%
on typical fee-for-service payments. On the provider
side, hospitals and doctors receive the benefit of a
Stark Waiver, thus allowing organizations to share
additional cost savings with their physicians.
When I was a practicing nurse (before becoming a consultant), I worked for a health system that
implemented cardiovascular bundles with the Acute
Care Episode (ACE) program. As we rolled out the
program, I learned firsthand that costs do indeed
come down. Yet a far more compelling benefit to
all stakeholders was that care quality also became
demonstrably better. Not only did we experience
better communication between nurses and doctors
and achieve improved clinical outcomes, but patients
also consistently commented that the coordination
of their care was noticeably better. And the benefits
of bundles go beyond the anecdotal. A look at CMS
data shows that bundled payments are actually one
of the only payment innovation models that have objectively yielded improved quality and reduced costs.
“As we rolled out the program, I learned first hand
that costs do indeed come down. Yet a far more
compelling benefit to all stakeholders was that
care quality also became demonstrably better.”
ACC.org/CSWN
Ultimately, however, the goal of bundled payments isn’t financial gain, or at least it shouldn’t
be. The true value comes from the opportunity to
improve communication and bridge gaps in the
continuum that have long plagued care delivery—
gaps that have prevented Americans from getting
the care we need and the outcomes we deserve. To
achieve these benefits, cardiology groups need to
design the right program(s) for the right service(s).
Preparing for CV Bundled Payment Programs
Regardless of whether your organization is currently
participating in a bundled payment arrangement or
just beginning to consider the approach there are a
number of critical steps that physicians can take now
to ready themselves for managing episodic risk.
• Benchmark your clinical and cost performance
to top decile programs around the country
• Build cross-continuum management
• Understand post-acute cost drivers and build
into your existing order sets and protocols
specific orders for how your patients will be
managed post-discharge
• Perform a monthly review of cost and quality
performance at a provider level
• Build robust readmission avoidance program
• Conduct a review of the current literature and go
back to the drawing board with your order sets in
an effort to redesign the care model based on value
A Winner’s Mind-set
While bundled payment programs won’t revolutionize health care on their own, they will contribute to
the system’s positive evolution. Bundles represent
one of the few approaches in health care today
where all stakeholders can benefit. Patients experience better outcomes due to greater care coordination. With re-aligned incentives, physicians can
better communicate and collaborate in providing
the right care at the right time. For payers, and the
system as a whole, costs become more sustainable
when value is incentivized over volume. ■
CardioSource WorldNews
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