Bun­dled pay­ments at­tract providers, but will they sign?

Modern Healthcare - - NEWS - By Me­lanie Evans

The grow­ing num­ber of health­care providers con­sid­er­ing join­ing Medi­care’s bun­dled-pay­ments pro­gram sig­nals wide­spread thirst to explore risk-based re­im­burse­ment mod­els, but the suc­cess of the ini­tia­tive will de­pend on how many ac­tu­ally take the leap.

About 4,100 new ap­pli­cants are el­i­gi­ble to join 2,400 hos­pi­tals, nurs­ing homes and med­i­cal groups that are al­ready can­di­dates for Medi­care’s Bun­dled Pay­ment for Care Im­prove­ment ini­tia­tive, the CMS In­no­va­tion Cen­ter said last week. At this stage, providers will merely eval­u­ate their per­for­mance un­der the pos­si­ble bun­dled pay­ments to see whether they can stom­ach the risk.

Not all of the can­di­dates will agree to ac­tu­ally en­ter into bun­dled-pay­ment con­tracts. In the very first crop, 86 did not and 236 went ahead. A large per­cent­age back­ing out should raise ques­tions about what prompted the exit, said Fran­cois de Brantes, ex­ec­u­tive direc­tor of the Health Care In­cen­tives Im­prove­ment In­sti­tute.

The next wave of can­di­dates was sup­posed to de­cide be­fore year-end. The CMS, how­ever, no­ti­fied them last week that the agency is de­lay­ing the re­lease of Medi­care pric­ing data that’s needed to as­sess bun­dled-pay­ment op­tions, said Brian Fuller, direc­tor of post-acute care for con­sult­ing firm Avalere Health. As a re­sult, can­di­dates will have up to four ad­di­tional months to de­cide whether to join the pro­gram. They can en­ter into con­tracts in Jan­uary as sched­uled but can wait un­til April 2015, and they can ex­pand con­tracts through Oc­to­ber 2015.

“The strength of the case-man­age­ment team is es­sen­tial to im­ple­ment­ing this ef­fec­tively,” said Rich Roth, vice pres­i­dent of strate­gic in­no­va­tion at San Fran­cisco-based Dig­nity Health, which is seek­ing to ex­pand its par­tic­i­pa­tion from two hos­pi­tals to nearly all its 37 hos­pi­tals.

De Brantes said the surge in in­ter­est sug­gests grow­ing com­fort among providers with re­im­burse­ment that comes with height­ened fi­nan­cial risk. The Medi­care ini­tia­tive’s four mod­els give providers the op­por­tu­nity to test bun­dled pay­ments on a lim­ited scale, un­like con­tracts that re­quire a more global bud­get.

The ini­tia­tive, launched in Jan­uary 2013, bun­dles pay­ments for mul­ti­ple ser­vices con­nected to some or all of 48 episodes of care. Par­tic­i­pat­ing providers profit when their spend­ing on that care falls below Medi­care’s sav­ings tar­get. With some ex­cep­tions, they must beat Medi­care costs by 2% to 3.5% be­fore they’re re­warded.

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