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.
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