AHA Sees Opportunities in Bundled Payments

But investments in capacity and infrastructure are needed

In October 2015, the Centers for Medicare and Medicaid Services (CMS) announced that more than 1,600 participants had entered its Bundled Payment for Care Improvement (BPCI) program, including 415 acute-care hospitals, 305 physician groups, and 723 skilled-nursing facilities. In November, the CMS released its final rule for a new Comprehensive Care for Joint Replacement (CJR) initiative, a mandatory bundled payment program for total hip or knee replacement in 67 metropolitan statistical areas with 789 hospital participants beginning April 1, 2016.

Bundled payment sets a single spending target for all applicable health care services provided during a clinical episode of care over a specified period. The goal is to create financial incentives that encourage providers to coordinate care across treatment settings, to reduce unnecessary services, and to expand initiatives that can help patients recover quickly.

According to an issue brief from the American Hospital Association (AHA), acute-care providers have many opportunities to improve quality and to achieve positive financial results in bundling programs. “In contrast to ACO [accountable care organization] initiatives that generally focus on primary care, bundled payment offers an opportunity to directly engage specialist physicians in care redesign,” the report says.

A hospital’s success in a bundled payment program depends on several factors.

Hospitals “need systems for identifying patients likely to qualify for bundled episodes early—particularly if they are at high risk for complications or are likely to need medical or social support after they are discharged,” according to the AHA. “Second, hospitals will need to establish teams that will work with physicians to implement standard care processes to reduce treatment variation. Such efforts have been shown to reduce complications, readmissions, and hospital length of stay when they are implemented effectively. Hospitals also need to have a high-functioning discharge planning process.”

There will also have to be contingencies to deal with issues such as variations in spending caused by pricey outlier cases, the report says.

The most significant opportunities for reducing spending and improving quality generally occur after patients are discharged from the hospital, according to the AHA. Bundling participants can adopt several strategies to manage post-acute care more effectively. One is reducing the unnecessary use of more-intensive facility-based settings and referring patients to lower-cost settings when appropriate. Another is establishing preferred relationships with post-acute providers that have demonstrated good outcomes and are willing to collaborate on performance improvement. A third strategy is investing in systems and personnel to coordinate care transitions effectively.

The AHA notes, however, that bundled payment participants need to invest in new capacity and infrastructure to succeed. These changes include the capacity to:

  • Identify patients eligible for bundles early and assess their risk for complications.
  • Establish data analytic and information-sharing capabilities.
  • Track patients across the continuum of care.
  • Redesign care.
  • Engage physicians.
  • Coordinate care transitions and manage post-acute services.

Sources: AHA; January 19, 2016; and FierceHealthFinance; January 21, 2016.