Pay­ment over­haul

CMS’ bun­dled-pay­ment ini­tia­tive nears launch

Modern Healthcare - - THE WEEK IN HEALTHCARE - Me­lanie Evans

Medi­care took an­other step last week to­ward dra­mat­i­cally over­haul­ing how it pays hos­pi­tals, doc­tors and other providers.

Of­fi­cials named roughly 430 or­ga­ni­za­tions el­i­gi­ble to par­tic­i­pate in a large-scale bun­dled-pay­ment pi­lot project, which is sched­uled to launch in July. It si­mul­ta­ne­ously an­nounced more that two dozen hos­pi­tals have signed up to test an ex­panded physi­cian pay-for- per­for­mance pro­gram be­gin­ning in April.

The CMS has had small bun­dled-pay­ment projects in the past and in 2011 adopted bun­dled pay­ments for dial­y­sis care. But the cur­rent pro­gram, which in­volves 48 pos­si­ble con­di­tions, will serve as a dra­matic test of the vi­a­bil­ity of a uni­ver­sal bun­dled-pay­ment sys­tem.

The ef­fort stands to be Medi­care’s largest pi­lot of pay­ment bun­dles, should the 430 or­ga­ni­za­tions en­ter into bun­dled-pay­ment con­tracts this July.

The two new pay­ment ex­per­i­ments will last three years and are among sev­eral at­tempts un­der the 2010 health re­form law to de­vise al­ter­na­tives that wean providers from the fee-for-ser­vice sys­tem, where each surgery, test or ser­vice gets re­im­bursed. Health pol­i­cy­mak­ers fault fee-for-ser­vice re­im­burse­ment for in­cen­tiviz­ing providers to de­liver care be­yond what is ac­tu­ally med­i­cally nec­es­sary or ig­nore qual­ity prob­lems since it al­lows them to get paid for re­peat pro­ce­dures.

Bun­dled pay­ments would re­im­burse hos­pi­tals, doc­tors and other providers, such as nurs­ing homes and home health agen­cies, a lump sum for all the med­i­cal care pro­vided for a spe­cific con­di­tion or dur­ing a set pe­riod

of time. Providers that can treat pa­tients for less than the lump sum see a profit, but lose money if care costs more than the bun­dled-pay­ment amount.

Some pol­icy an­a­lysts fret bun­dled pay­ments will cre­ate an in­cen­tive for providers to deny care. “In­cen­tives to skimp on care are in­her­ent in any fixed-episode pay­ment sys­tem be­cause there is no pay­ment for ad­di­tional ser­vices,” a group of ex­perts wrote in Health Af­fairs in late 2011.

The CMS will mon­i­tor re­sults to see if that hap­pens. Con­tracts will “an­a­lyze qual­ity in­for­ma­tion avail­able from claims and qual­ity re­port­ing from the awardees (and) as­sess care ex­pe­ri­ence and health out­comes,” an agency spokes­woman said. “CMS’ mon­i­tor­ing ef­fort will aim to … de­tect in­ap­pro­pri­ate prac­tices in­clud­ing care stint­ing, pa­tient se­lec­tion to max­i­mize fi­nan­cial gain and cost shift­ing.”

North Shore-Long Is­land Jewish Health Sys­tem, based in Great Neck, N.Y., has been se­lected as a can­di­date for four of its hos­pi­tals to test bun­dled pay­ments. Howard Gold, se­nior vice pres­i­dent of man­aged care, said the 11-hospi­tal group plans to fo­cus in coming months on nurse train­ing and dis­charge plan­ning to bet­ter man­age care and costs un­der bun­dled pay­ments. Gold said a bun­dled-pay­ment ex­per­i­ment in the 1990s failed with­out such prepa­ra­tions.

The smaller ini­tia­tive an­nounced last week al­lows hos­pi­tals to of­fer doc­tors a fi­nan­cial in­cen­tive to cut costs and meet spec­i­fied per­for­mance tar­gets for clin­i­cal mea­sures— such as use of a low-cost drug in­stead of a pricier pre­scrip­tion. The pay-for­per­for­mance pro­gram uses a shared-sav­ings model, since it si­mul­ta­ne­ously re­duces Medi­care pay­ments to hos­pi­tals.

Of the 32 or­ga­ni­za­tions that will of­fer physi­cians fi­nan­cial in­cen­tives un­der the ef­fort, 29 are in New Jersey. Cen­traS­tate Health­Care Sys­tem will see its hospi­tal pay­ments cut by 0.5% in the sec­ond half of the first year, said Daniel Messina, se­nior vice pres­i­dent and chief op­er­at­ing of­fi­cer for Free­hold-based Cen­traS­tate. Cuts will in­crease to 1% in year one and 2% in year two.

Messina said the sys­tem’s sav­ings in the ini­tial pi­lot to­taled $2.2 mil­lion and physi­cian in­cen­tives var­ied based on in­di­vid­ual physi­cian per­for­mance.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.