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April 26, 2016

Bundled Payments Lead to Higher Quality of Coordinated Care for Physicians

The Bundled Payments for Care Improvement initiative (BPCI) was launched from the Center for Medicare & Medicaid Innovation (CMMI) to encourage care coordination and cost efficiency for patients and health care providers.  Historically, hospitals, physicians and post-acute care providers have been paid separately for services occurring during and after hospital admissions. With bundled payments, a fixed lump sum is shared among all caregivers, as well as a shared savings when actual expenses fall below the bundled payment amount.

Bundled Payment Model

As providers enter into the Bundled Payment Model, organizations enter into payment arrangement that includes financial and performance accountability for the entirety of care. This concept is thought to lead to a higher quality of coordinated care for beneficiaries at a lower cost. When entering the agreement, the BPCI denotes four different models defining the bundled payments:

  • Model 1: Part A services for index hospitals alone
  • Model 2: (the most comprehensive) Including Part A and Part B services for index hospitalization, readmissions and all other post-acute care
  • Model 3: only post-acute care
  • Model 4: Both the index hospitalization and any readmissions

Many types of providers have been choosing to utilize bundled payments, including orthopedic and cardiac services.  As the coordination benefits financially, risk is a questionable factor. The participant’s distribution of risk among the various providers that share in a patients care is yet to be determined. Though the risk involved with care in chronic conditions may be hard to distribute due to length of time, other procedures would make it easier due to measurable days of risk verses years. Though CMMI has offered risk corridors to address certain situations, providers still remain concerned about the inability to negate the risk for those who have multiple clinical courses.

As the program has only been introduced for nearly 3 years, BPCI has a great potential for growth and development. As participation increases, the potential for generalization of eventual outcomes has also increased as well. Medicare and Medicaid employees working behind the BPCI are ensuring that beneficiaries receive care from providers that are participating in BPCI with the highest quality of care. As the BPCI is monitored, providers identify quality and processing improvements, change in outcomes and reductions in expenditures. However, the magnitude of BPCI’s long term impact will strongly depend on the uncertain results of how to distribute the risk. As BPCI determines how to distribute risk across large risk bearing groups, CMMI’s ability to convince other providers to join the program will become easier.

If you have any questions on how the Bundled Payments for Care Improvement Initiative could affect your practice, contact the Anders Health Care Group.

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