News & Commentary

To Save a Bundle, These Payments Need To Change

Ezekiel J. Emanuel, MD

Bundled payment systems have been with us a long while and maybe it’s time to tweak them, according to an opinion piece in JAMA. The authors argue that bundled payments can be even more cost-effective if their durations are lengthened, if some of the bundled services can be performed outside a hospital, and if they can be integrated with ACOs.

Bundled payment systems pay providers for an episode of care based on how well they keep costs in check relative to benchmarks based on how much was spent in the past.

The authors—Amol S. Navathe, MD, Zirui Song, MD, and Ezekiel J. Emanuel, MD—say that the current structure of bundled payment systems limit their effectiveness. Emanuel, who is now on the faculty of the University of Pennsylvania, was a health official in the Obama administration and had a hand in shaping the ACA.

Bundled payments have retained the fee-for-service incentive to do more, especially for conditions without well-defined criteria for intervention, they wrote in JAMA. Another trouble spot: an unintended incentive to select for healthier patients and potentially increasing low-value care that offsets efficiency savings.

One change these authors want to see is restricting bundled payment to conditions with a clear starting point and those in which there is only limited physician and patient discretion.

Including services outside of the expensive hospital setting would involve allowing primary care physicians to take on some of the financial responsibility.

The authors cite Medicare’s oncology bundle care model as an example. It lets outpatient practices share in the risk.

“Similarly, allowing ambulatory surgery centers or orthopedic practices to serve as the risk-bearing entity for hip replacements would incentivize a shift in surgical procedures out of the hospital, potentially generating substantial cost savings,” the authors write.

One of the biggest problems with the current structure of bundled payments is that, for the most part, they cover services up to 90 days after hospital discharge. That should be extended a year, they say.

Maternity bundled care, for instance, could include prenatal care, delivery, and subsequent neonatal care.

“For chronic diseases such as atrial fibrillation, the bundle may include physician visits, laboratory measurements for anticoagulation such as the international normalized ratio, diagnostic services such as electrocardiograms, medications, therapeutic procedures such as cardioversion and ablation, and associated hospitalizations.”

Bundled payments could work with ACOs if every provider involved has the same information on a patient. “The simplest approach is to count episodes for patients in ACOs in the bundle program by including the actual episode costs for assigned beneficiaries within the global costs of ACOs,” the authors write. This contrasts with current CMS policy for ACOs that “counts the historical target price for the bundle against the global costs of ACOs.”

Bundled payment care could be evaluated separately from the calculations of total cost at ACOs, according to the letter.

“This structure would not allow the ACO program to offset the incentive to do more within the bundled payment and would potentially reduce savings for ACOs by allowing clinicians to cherry-pick more profitable cases,” the authors write.


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