Stakeholders' Interest in Bundled Payment Program Rises
August 1, 2014
Katie Sullivan, MA
CMS has announced that it will nearly double the number of candidates in its bundled payment program. As part of the Affordable Care Act, the program aims to reduce care costs and improve patients’ quality of care by offering providers with an alternative to the traditional fee-for-service reimbursement model.

Medicare originally began the bundled payment program in 2013, with about 243 providers agreeing to participate. CMS said it invited 2400 providers to join the 4100 candidate pool of other providers who are currently exploring the possibility of integrating bundled payments into their operations. Program participants can analyze their Medicare spending data to determine whether bundled payments may be appropriate for their practices. Barring few exceptions, they must reduce their Medicare costs by at least 2 to3.5% before they receive any financial rewards. CMS said the surge of interest in the program is encouraging.

 “Through the Bundled Payments for Care Improvement initiative, CMS is taking another step forward in identifying models that will provide better quality of care and improved health for Medicare beneficiaries, at lower costs for our nation's taxpayers,” the agency stated.

A recent study sponsored by the Health Care Incentive Improvement Institute and conducted by Bailit Health Purchasing found that public and private payers are also increasingly committing to bundled payments as part of the core strategy. The findings suggest that interest in the program extends well beyond that of a pilot program status.

“The predominant trend among providers embracing bundled payments is their commitment to developing and implementing comprehensive systems of care that continue for the duration of the bundle, and that include all caregivers,” said study authors Michael Bailit, MBA, president at Bailit Health Purchasing, and  Margaret Houy, JD, MBA, a consultant at the group. “With the Centers for Medicare and Medicaid Innovation’s (CMMI) Bundled Payment for Care Improvement (BPCI) initiative, the types of services to which bundled payment models are being applied have greatly expanded.”

For most existing bundled payment models, payers reimburse providers based on an episode of care. However, because most payers and providers do not yet have the resources to bundle claims–the process generally remains a manual one. With broader adoption of the model, it is likely this process will become more efficient. In fact, Mr Bailit and Ms Houy said the same payers that are integrating bundled payments beyond pilot status have already begun to automate the process.

"Payers are automating what have been manual, resource-intensive processes and are making significant investments to do so," the authors explained. "They are also simplifying their bundled payment methodologies to make them easier for the payer and its contracted providers to administer."

Incentives found in bundled payments may reduce unnecessary risks and waste, which will help to lower the costs of care management.
Around the Web

Interest Surges in Medicare Bundled-Payment Initiative [Modern Healthcare]

Key Payer and Provider Operational Steps to Successfully Implement Bundled Payments [HCIII]