Payment Bundling Requires Suspension of FFS State of Mind
Four hundred healthcare providers — about a tenth of all those in the United States — can't be wrong, can they?
That's the number signed on to participate in a Medicare payment bundling pilot run by CMS, their biggest payor. And while it's too early to know if the reimbursement concept will stick, one thing's for certain, noted Jay Sultan during a recent webinar on Moving Forward with Payment Bundling: there's a growing body of proof that the payment model works.
As an example, Sultan, associate vice president and chief product portfolio architect for TriZetto® shared some data from California's Hoag Orthopedic Institute, formerly two surgical groups who have collaborated in a bundled payment model and "reengineered every aspect of care, from beginning to end, significantly lowering its common cost structure." In one proof point shared by Sultan, Hoag reduced infection rates for knee replacements to 0.1 percent, significantly below the national 2 percent average, Sultan explained during the advice-filled session. The savings per avoided infection is about $60,000, he said.
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While the federal payor has yet to report, early feedback from CMS's recently concluded ACE bundled payment demo is largely positive in terms of revenue for participating payors, hospitals, physicians — even the patients in the pilot received a rebate from CMS, he added.
Based on Sultan's own research, he is "not aware of any prospective payment, bundled payment program that was not beneficial for the providers, the payor and the members." He contrasted prospective payments with retrospective payments, which he characterized as similar to fee-for-service (FFS) but with the possibility of receiving a bonus afterward.
There is a place for both payment types, but prospective does a better job of transforming care, Sultan noted.
Sultan went on to outline the general challenges for both payors and providers of crafting an episodic payment program, which could take up to 12 months.
You can "attend" this program right in your office and enjoy significant savings — no travel time or hassle; no hotel expenses. It’s so convenient! Invite your staff members to watch the conference. We will send you a DVD or CD-ROM of the conference proceedings or a link to our web site with a username and password. You can log in and view the program right from your computer — any time of the day or night, whenever convenient for you and your colleagues — and benefit from the archived recording of the conference, including the Q&A period.
You'll get to listen to the question and answer session to hear how providers are dealing with the statistical variation in setting performance goals for clinical and financial measures that will be acceptable to both hospitals and physicians; how to address various risk stratification of care within an episode of care; a reasonable strategy for beginning a pilot without going "all in"; mechanisms most frequently used to define payment bundles (Prometheus, CMS etc.) and common practices around duration; and themes developing on how providers are paid.
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