Posts Tagged ‘Bundled Payments’

Guest Post: Demonstrating High Quality Care Becomes Paramount in the Bundled Payment Models

April 24th, 2018 by Shane Wolverton

Optimizing bundled payment model opportunities.

The Centers for Medicare and Medicaid Services’ (CMS) cancellation of the mandatory payment bundles for cardiac care, surgical hip and femur fracture treatment in late 2017 is expected to be replaced in 2018 with a voluntary program, called the Bundled Payments for Care Improvement Advanced (BPCI).

CMS also cancelled the cardiac rehabilitation incentive payment model and switched participation requirements in the Comprehensive Care for Joint Replacement (CJR) model from mandatory to voluntary while reducing the selected geographic areas from 67 to 33.

In the BPCI Advanced model, providers will be expected to share in the financial risk and redesign of care delivery to reduce expenditures while maintaining or improving performance on specific quality measures.

CMS’ decision regarding payment under the CJR model that allows total knee arthroplasty to be performed in outpatient settings has caused considerable concern for providers in the acute care setting due to potential loss of revenue to lower cost care settings. Despite these uncertainties, some hospitals under the CJR model have reduced spend per episode and implant costs by over 20 percent.

Regardless of the programs offered by CMS in 2018, providers should focus on finding ways to optimize the bundled payment opportunity with self-funded employers or other plan sponsors as they look to bundles for lowering spend and improving quality. Many of these arrangements require providers to implement stop-loss that assumes risk for utilization beyond the bundled rate. With bundles now offered by ambulatory surgery centers consistent utilization and quality performance becomes paramount. There are numerous organizations scaling to meet increasing demand for this type of value-based care ushering in greater competition.

Maximizing the Benefits of Bundled Payments

The key to success depends on the ability of the organization to foster multi-disciplinary teamwork organized around more refined episodic analysis looking at structure, process indicators and outcomes. These advanced analytics serve as the roadmap to thrive with this payment model. It is vital that the analytics be clinically focused and risk adjusted to determine whether variation is manageable or due to the clinical and demographics of the patients.

Four Steps

First, identify physician leaders to guide the study of current practice patterns, patient throughput and post-acute care. While the physicians facilitate this process, it is recommended that nursing, supply chain, pharmacy and other stakeholders be included.

Second, develop the analytic tools to assess care across the continuum using claims, EMR, and process and patient reported outcomes. Organizations should look for analytics that allow stakeholders to see severity-adjusted episode of illness across the entire continuum of patient care. Accurately comparing the total cost and utilization of medical services against peer groups, national norms, and best practices is important as the trend in bundles is to cover post procedural spend for as long as 90 days. It is essential to compile analytics refined enough to define the current performance and model the expected bundled rates and outcomes. If this step is not performed rigorously, the organization faces considerable risk and discontentment by stakeholders.

Third, determine how the bundles rate will be distributed to the physicians and facilities. This must include incentives for improvement for all stakeholders as margins improve and quality increases.

Fourth, educate the patients and families, as key stakeholders to empower them to work as part of a coordinated team. Providing clear information about the episode can reduce anxiety and improve adherence to recommended therapies and medications pre and post-surgery. Using navigators is a proven approach to help patients through the episode of care.

Patient Selection

As the journey into bundled care begins with the selection of patients best suited for this type of care, it is advantageous to build a repeatable and evidence-based approach to delivering this care. More variability in the clinical and demographic attributes of the patient leads to greater potential variance in treatment. It is vital that the teams develop a consistent care path especially early into the program. This fosters the knowledge required to set utilization and quality outcomes firmly in alignment with the bundled rate. Even the slightest inconsistencies can have significant impact on the programs performance.

Healthcare Performance Management & Analytics

With bundled payments, providers and healthcare delivery organizations benefit from the savings, provided the outcomes of the patient meet expectations. There are some arrangements where quality performance guarantees are included as part of the agreement. For instance, one of the most comprehensive arrangements is the inclusion of a lifetime guarantee for hip arthroplasty. As more care moves from the acute care setting into ambulatory surgery centers or hospital outpatient departments the price of bundles will be commoditized and attractive margins harder to maintain. Patients may also believe that lower cost settings of care may also translate to the delivery of lower quality of care. This puts tremendous pressure on hospitals to begin diligent work on bundles knowing they have a cost disadvantage compared to outpatient settings. Demonstrating high quality care to patients regardless of setting will foster greater trust with employers and payers and reduce the reluctance for patients to seek treatment in the outpatient setting.

Assessment of risk adjusted mortality, complications and unanticipated readmissions along with Agency Healthcare Research and Quality patient safety indicators is essential in building and maintaining a bundled program. These indicators must be risk adjusted properly to validate performance, remediate poor outcomes, credential providers and market the program. The use of statistical process control techniques is also required to discern random versus special cause variation in utilization or outcomes. It would be desirable to use methods published in peer reviewed journals for integrity with the medical staff.

As plan sponsors look for lower cost settings, the quality of care delivered becomes even more important since partnering with a low quality facility may impact the success of this program and their bottom line. Providers that can share their level of safety and performance measures based on reliable and comprehensive analytics will be in a far better position to attract patient volume with better outcomes.

About the Author:

Shane Wolverton

Shane Wolverton is SVP Corporate Development at Quantros. He is responsible for establishing business partnerships for the company and is a sought after speaker on a wide range topics around value-based healthcare delivery.

With over 25 years of deep domain expertise in the use of clinically and risk-adjusted medical analytics he works with many stakeholders in healthcare including employers, brokers, benefits consultants, vendors & providers. He is currently working with numerous organizations leading the movement toward value-based care through high performance networks, COEs, transparency, consumer navigation, bundles of care and network optimization. In addition, he advises hospitals, and physicians, in the use of advanced analytics to drive clinical performance improvement, clinical documentation improvement and performance based marketing communications.

Prior to joining Quantros, Mr. Wolverton served as senior vice president of corporate development at Comparion Medical Analytics. He also served as a management consultant with Health Care Investment Analysts (now IBM Truven Health Analytics) and the McGraw-Hill Healthcare Management Group. He received his undergraduate degree from Auburn University.

HIN Disclaimer: The opinions, representations and statements made within this guest article are those of the author and not of the Healthcare Intelligence Network as a whole. Any copyright remains with the author and any liability with regard to infringement of intellectual property rights remains with them. The company accepts no liability for any errors, omissions or representations.

Infographic: Maternity Episodes of Care

January 16th, 2017 by Melanie Matthews

Maternity Episodes of CareThe cost of maternity care varies significantly by payer (commercial or Medicaid), by type of birth (vaginal or cesarean section), and by setting (hospital or birth center). Too often, women are not experiencing optimal outcomes in maternity care despite the significant resources spent, according to a new infographic by the Health Care Payment Learning & Action Network.

The infographic examines how an episode of care could be applied to maternity care—from an episode timeline for prenatal through postpartum care; episode parameters; operational considerations; and maternity care design elements.

Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ) has awarded $3 million to 51 specialty medical practices as part of a shared savings arrangement through the company’s Episodes of Care (EOC) program. The doctors, in five different specialty areas, earned the payments by achieving quality, cost efficiency and patient satisfaction goals in 2014 while treating more than 8,000 Horizon BCBSNJ members. As the largest commercial payor of Episodes of Care in the United States, Horizon BCBSNJ recently reported far lower hospital readmission rates and improved clinical outcomes for members in its EOC practices versus non-EOC practices in 2014.

During Episodes of Care: Improving Clinical Outcomes and Reducing Total Cost of Care Through a Collaborative Payor-Provider Relationship, a March 31, 2016 webinar, available for replay, Lili Brillstein, director of the Horizon EOC program, shares the details behind the health plan’s EOC program, from the episodes they have bundled to the goals and results from the program.

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Infographic: Tracking Patient Status for Bundled Payments

August 10th, 2016 by Melanie Matthews

The Centers for Medicare and Medicaid Services is targeting the wide variations in quality and cost of hip and knee replacements (lower extremity joint replacement [LEJR]) through its LEJR bundled payment program launched in April, according to a new infographic by Caradigm.

The infographic examines these quality and cost variations as well as the sites of care where patients typically recover from these surgeries.

Bundled Payments for Post-Acute Care: Profiting from Alternative Payments and Clinical Redesign A desire to position itself at the forefront of healthcare payment reform and be a catalyst for clinical redesign are two factors driving Brooks Rehabilitation’s participation in Model 3 of CMS’s Bundled Payments for Care Improvement (BPCI) initiative.

Today, having completed more than 1,000 bundled episodes for total hip replacements, total knee replacements and hip fractures, Brooks has reduced cost by 19 percent per episode, lowered readmissions to about 15 percent across its 60-day time frame, registered a patient satisfaction level of 94 percent and documented significant functional improvement.

Bundled Payments for Post-Acute Care: Profiting from Alternative Payments and Clinical Redesign examines the four domains of success of Brooks’ Complete Care program supporting the organization’s bundled payment clinical outcomes and financial results.

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Post-Acute Care Payment Bundles: Catalyst for Clinical Redesign, Improved Care Transitions

July 30th, 2015 by Melanie Matthews

Brooks Rehabilitation jumped at the opportunity to participate in CMS’ Bundled Payments for Care Improvement (BPCI) program to be at the forefront of learning more about healthcare payment reform, said Debbie Reber, MHS, OTR, vice president of clinical services, Brooks Rehabilitation.

We saw it as an opportunity for post-acute care providers to help make some of the healthcare policy changes related to the future of healthcare reimbursement. We also really want it to serve as a catalyst for our business to begin working better as a system of care, Ms. Reber explained during last month’s webinar, Bundled Payments for Post-Acute Care: Four Critical Paths To Success, a Healthcare Intelligence Network webinar now available for replay.

Post-Acute Care Payment Bundles: Catalyst for Clinical Redesign, Improved Care Transitions

Brooks Rehabilitation achieves 19 percent savings over historic spend and reduces readmission rates to 15 percent through Bundled Payments for Care Improvement Program.

“Our move toward bundled payments was a great opportunity to improve our care transitions, our continuum,” said Reber. “The other huge opportunity is to experiment with clinical redesign. As we approached bundle pay, we approached it with ‘we have a blank slate. We can redesign the care to look and feel however we want it to be. If we were doing things all over again, what are the things or the gaps or cracks to the clinical care that we could really improve upon?'”

“We knew that we wanted to have a strong voice regarding future policy and payment reform changes. We really wanted to show that we were sophisticated enough to take risk and play a primary role with that continuum of care,” she added.

Brooks is serving under CMS’ Model 3, in which it selects from a list of DRGs. It started in October 2013 with fractures, hip and knee replacements as well as hip and knee revisions.

Brooks added congestive heart failure, non-cervical and cervical fusions and back and neck surgery bundles this past April.

“All of our bundles are for an episode length of 60 days with the only exception to that being congestive heart failure. We did heart failure for 30 days just due to the tremendous risk of managing those cases and to decrease our risk overall with that population,” Reber explained.

Brooks begins its process when the patient leaves the acute care facility.

“We are then responsible for all non-hospice Part A and B services, including physician visits, DME, medications, post-acute therapy or rehab services, as well as any readmission,” she said. Of particular note is that the readmissions are not just related to the acute episodes that we are seeing them for…it’s for any reason that the patient would be readmitted.

Understanding what those readmission reasons are is huge to our success, Reber explained. For example, on the orthopedic side, even though the patients have just been seen for an orthopedic surgery, the primary reason for readmission is predominantly around cardiac issues or pulmonary issues that are more likely due to prior comorbidities. It’s really just managing those issues more.

Brooks has achieved an overall savings of about 19 percent over its historic spend and has decreased its readmission rate to about 15 percent across the 60-day time frame within this program. And, has also seen increases in patient functional improvement and patient satisfaction rates.

During the webinar, Reber walked participants through the four domains that have been critical to its success in the BPCI program, including: using standardized assessments across care settings; patient and caregiver engagement; the in-house developed Care Compass Tool, which includes a longitudinal care plan; and enhancing the role of the care navigator.

Leveraging the PHO Model for Bundled Payment Success

February 5th, 2015 by Cheryl Miller

As Medicare begins its ambitious timeline for moving Medicare payments from volume- to value-based models, alternative payment formulas, including bundled payment arrangements for episodes of care, which CMS has tested in a range of pilots in recent years, will come to the forefront. Here, Travis Ansel, senior manager of the Healthcare Strategy Group, explains why the physician-hospital organization (PHO) provides an attractive framework for bundled payment models.

Bundled pricing is appearing in more and more markets across a number of payors. As I’m sure everyone knows, CMS is testing bundled payment pilots across the country. A number of our clients that have been involved with that have had a reasonable amount of success. Overall, the level of success of the bundled pricing pilot program for CMS leaves one to wonder: is that the future of CMS? Is it some combination of accountable care organizations (ACOs) and bundled payments?

Another interesting program for bundled payments is what’s going on in Arkansas with the Healthcare Payment Improvement Initiative. In this program, the state Medicaid program and Blue Cross have actually worked together to create bundled payments for episodes of care based around high volume diagnosis-related groups (DRGs). The responsibilities for hitting the cost targets in this case are assigned to what they refer to as the “principal accountable provider.” For example, for DRG 470, major joint, the principal accountable provider is the orthopedic surgeon, but the orthopedic surgeon in this case was being held accountable for what goes on in his or her practice.

What goes on before surgery? What goes on during the hospitalization and the surgery, and then what happens 30-90 days post-acute care? They’re being held accountable for care across the continuum. This is relevant to the PHO model, because as this is phased into a number of DRGs—it started with eight, but now it includes quite a few more—the need for a PHO model will bring these physicians together.

PHO Models
Travis Ansel, MBA, is manager of strategic services with Healthcare Strategy Group, LLC. Ansel’s practice focuses on helping hospitals and health systems with physician alignment issues through strategic planning initiatives, such as hospital strategic planning, employed physician group strategic planning, physician alignment planning, and clinical integration. Mr. Ansel holds a master’s of business administration from Vanderbilt University, and bachelor of science degrees in finance and business management from the University of Tennessee.

Source: Preparing for Value-Based Reimbursement Models: PHO Development for ACOs, Bundled Payments and Direct Contracting

Lessons from the CMS ACE Bundled Payment Project

April 3rd, 2014 by Cheryl Miller

Simply put, payment bundling is one of the few policy alternatives available to the healthcare industry in which patients, providers and payors do better, explains Jay Sultan associate vice president and chief product portfolio architect, Trizetto® Corporation. Here, he explains the model, in light of lessons learned from CMS’ recent Acute Care Episode (ACE).

I worked on the CMS ACE Demonstration as an agent for two of the hospitals participating in it; I helped them set up and design the program. Going through all the different constituents, the payor received a discount, they shifted risk, the hospital was able to decrease cost and increase market share.

In one fairly straightforward instance, a single diagnostic-related group (DRG) in the ACE Demonstration Project covered roughly 38 DRGs related to hips and knees. It was all of the implantable related cardiac DRGs, like valves, stents and AICDs. It also included coronary artery bypass grafting (CABG). On one of the DRGs, , they were able to get a $2,000 case reduction in their internal costs.

The hospitals and the physicians both had their revenues go up through their share of the cost savings by the 25 percent that CMS limited them to. Had CMS not placed a limit on how much revenue the physicians could collect, at least one hospital said they thought that they could have doubled the physicians.

Just to be clear, the physicians doing ACE on average, based on the data that’s been reported so far, are getting paid 125 percent for doing traditional Medicare. They could have gotten 200 percent if CMS had not capped their savings.

Is all of this bad for the patient? It’s led to improved quality measurement, improved patient satisfaction. And in this particular program, the members actually got a rebate; a portion of the savings CMS negotiated was given to the patient for going to the facility doing the bundles. I’ll come back to that point later when we talk about the role of steerage and winners and losers in these new payment methodologies.

Excerpted from Blueprint for Bundled Payments: Strategies for Payors and Providers.

More Than Half of Americans Favor State Insurance Exchanges; Lawmakers Split Along Party Lines

February 5th, 2013 by Cheryl Miller

On the heels of the inauguration, a new poll from the Kaiser Family Foundation, the Robert Wood Johnson Foundation and the Harvard School of Public Health reports that while lawmakers are split along party lines about the creation of state-based health insurance exchanges, most Americans, regardless of their party affiliation, consider it a top healthcare priority.

The extensive survey goes on to discuss the differences in how Americans vs. lawmakers feel about a wide range of healthcare issues, including Medicaid expansion, Medicare cuts, and federal spending for such projects as finding new cures and treatments for major disease threats, research for health problems resulting from natural or man-made disasters, ways to prevent the spread of infectious diseases, and help for chronic illnesses, such as heart disease, cancer, and diabetes. Full details inside.

Reducing hospital readmissions transcends party politics, and a new transitional care program is taking aim at this increasingly costly issue. Launched by Univita Health and Aetna, members and their caregivers are engaged immediately upon admission to a hospital. Specially trained nurses from Univita and case managers from Aetna discuss their condition and discharge plan in order to determine the type of support they will need when they go home. Once home, both professionals continue to help the member in a number of different ways, including assessing their living conditions, and explaining the signs and symptoms that may warrant a call to the doctor.

Care managers are crucial to another collaboration, this one between Franciscan Alliance and Cigna. Care managers employed by Franciscan Alliance will become part of the physician-led care team and serve as clinical care coordinators. They will help patients with chronic conditions or other health challenges navigate the healthcare system by helping them identify patients discharged from the hospital who might be at risk for readmission, and helping them get follow-up care and any needed screenings.

Transitional care continues to get its due with the announcement that Medicare has accepted two codes, categorized as transitional care management services, that allow for efficient reporting of time spent discussing a care plan, connecting patients to community services, transitioning them from inpatient settings and preventing readmissions. Medicare’s acceptance of the new codes signals that the agency recognizes the importance of the work involved in transitioning patients from one care setting to the next, and its contributions towards improving the overall quality of healthcare, AMA officials say.

And in late breaking news, CMS announced that over 500 organizations will begin participating in the Bundled Payments for Care Improvement initiative. The initative includes four models of bundling payments, depending on the types of healthcare providers involved and the services included in the bundle. They are: Retrospective Acute Care Hospital Stay Only, Retrospective Acute Care Hospital Stay Plus Post-Acute Care, Retrospective Post-Acute Care Only, and Acute Care Hospital Stay Only. Through this new initiative, CMS will test how bundling payments for episodes of care can result in more coordinated care for beneficiaries and lower costs for Medicare.

And don’t forget to take our new survey on mHealth, or mobile health, starting February 5th. An ever growing segment of the telehealth industry, telehealth is expected to reach 1.8 million patients by 2017. Tell us what your plans are, and you will get a free copy of the executive summary.

Read these stories and more in this week’s issue of the Healthcare Business Weekly Update.

Healthcare Delivery Advice for 2013: Shore Up Payment Before Shifting Model

October 23rd, 2012 by Patricia Donovan

Eying a move to an ACO or the patient-centered medical home model in 2013? First, adjust the payment structure to support it, advises Steven Valentine, president of the Camden Group. Shifting to one of the popular post-reform healthcare delivery models before changing the payment system is courting financial disaster, Valentine warned during HIN’s ninth annual Healthcare Trends & Forecasts strategic planning session.

Valentine charted anticipated trends for healthcare providers in 2013, while Hank Osowski and Dennis Eder, both managing directors for Strategic Health Group, covered business opportunities for health plans during the 60-minute webinar.

All of the analysts agreed that the outcome of next month’s presidential election would have little impact on healthcare reform.

“Regardless of who gets elected president, many of the things I’m talking about — bundled payment, patient-centered medical home, co-management agreements, clinical integration, accountable care organizations — are all going happen due to the economics of healthcare.”

“The reform train has left the station,” agreed Eder. “Folks who are waiting around to see what happens in the election, or who waited around for the Supreme Court decision on the Affordable Care Act, are too late.”

The election results will “likely influence the pace of change to the healthcare system, but probably not the direction,” added Osowski. The continued acquisitions and consolidations evident in the industry are proof in the market’s belief in the longevity of reform-based initiatives, he said.

Common ground across the industry continuum includes potential from collaborations — hospital-physician co-management service agreements on the provider side, and strategic partnerships in population health management on the payor side. Partnership opportunities are more plentiful now than at any time in recent healthcare history, noted Eder. “I was involved in the original integrated health world in the mid-1980’s when systems were buying both hospitals and physician organizations and starting health plans. The sincerity and the desire to work as true partners are unlike any time I’ve seen before.”

The speakers identified the strategic focus for each sector, with Valentine indicating that the key investment for providers should be on growing their population — getting as large a defined population base at the bottom of the pyramid as possible, which encompasses the access points and primary care, he said.

For payors, the industry’s increasingly population-centric, value over volume sensibility offers many opportunities in coordinated care, particularly for Medicaid-Medicare dual eligibles, said Osowski. “Duals comprise about 18 percent of the state Medicaid population, and yet they account for almost a little more than a third of the total spend on Medicaid,” he said.

Duals are a complex population with unique health concerns, requiring a strong behavioral health component. “Duals tend to be very costly because they’re typically non-compliant patients and don’t really follow what is being asked of them in terms of their healthcare,” said Valentine.

“The dual population is not just frail elders; the dual population is 40 percent people under 65,” added Eder. And the vast majority of the people under 65 are disabled because of behavioral health-related issues. So for organizations considering getting into the dual market, if you’ve just done frail elderly programs and you think you’re going to be working with that same cohort of members, it’s going to be a painful learning.”

In other trends, the industry should expect delays in implementation of health insurance exchanges (HIEs), which face significant funding hurdles, said Osowski.

Healthcare may also see the reemergence of narrow networks, in which health plan members or employers benefit from lower costs when staying within their own health systems. Individuals will still have the choice of going outside the system, but face much higher copays.

“We’re leaving choice in place, but we are getting much better at directing back to a smaller, more narrow network that will help to steer volume back to the providers, and reduce the total cost of care and the out of pocket cost for the employee,” concluded Valentine.

Listen to an interview with Dennis Eder, Hank Osowski and Steven Valentine.