Skip to main content

Three Tips for Providers Following the Bundled Payment Delay

What can you do while CMS decides how to handle the mandatory program?

As the healthcare community continues its march away from fee-for-service models, bundled payment initiatives have risen in popularity—thanks in no small part to their ability to fuel cost savings and significantly improve care outcomes.

The Centers for Medicare and Medicaid Services (CMS) issued an interim final rule in March that delays implementation of the new bundled payment model for heart attack and cardiac bypass surgery services; expansion of the existing Comprehensive Care for Joint Replacement bundling model; and implementation of a new cardiac rehabilitation incentive payment model, from July 1 to October 1, 2017.

Prior to the interim rule, CMS’ push forward on bundled payments focused the industry on episodic efficiency. The delay has pushed these initiatives back three months and, as DataGen’s Vice President, Kelly Price recently explained, is causing confusion and worry among participants.

Benefits of the delay

Despite Health and Human Services Secretary Tom Price’s negative statements about mandatory bundling initiatives, the delay has some benefits. Stakeholders across the industry will have more time to assess the efficacy of the program and provide comments to CMS. In addition, Secretary Price and others hope to align the payment periods with the calendar year. Providers can use this opportunity to better prepare for the program’s official start.

Will value-based care survive this overhaul?

Patrick Conway, Chief Medical Officer at CMS, has indicated that early findings around bundles are “encouraging,” but more data are needed to fully assess their impact on costs and quality. This validates CMS’ plans to test pilot bundles.

Industry experts think there is little reason to worry that bundled payment programs and other quality payment programs, such as those under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), are in danger of being decimated. The fact that MACRA was passed through a bipartisan vote indicates that Republicans and Democrats understand that there is a need to lower spending and shift away from fee-for-service toward value-based care. However, experts believe there might be a shift from mandatory bundles to voluntary bundles as it facilitates increased provider participation.

What should participants do now?

  1. Provider organizations that had previously expressed concern about the accelerated pace of the program can leverage this extra time to strengthen engagement with their patient populations. 
  2. Hospitals that will be participating in these programs can begin implementing test strategies to understand what would drive bundled payment profitability. Some factors to consider: 
    1. Program costs: These would include staff, marketing outreach to physicians, and information technology improvements. 
    2. Price discount: Providers may have a false sense of confidence if their historic spend is commensurate with the region rather than above that region. However, with a discount factor of 3% taken to calculate targets, those providers are already behind. 
    3. Gainsharing: While gainsharing is not allowed outside of the waivers in CMS’ bundling programs, providers can begin defining and discussing the parameters of a successful arrangement. Savings can be split by creating gainsharing incentives among the different stakeholders across the continuum. This will allow physicians to collaborate on the modalities they use to treat their patients. 
  3. Though it may be a long process, providers should begin educating senior leadership and setting appropriate expectations. While the concepts sound simple, in-depth exposure and discussion is needed to truly understand the implications of these new rules. 
At the same time, the CMS Innovation Center can use this extra time to test and evaluate these innovations in care delivery and payment and determine whether modifications are needed. CMS can also continue to examine the effectiveness of both mandatory and voluntary bundles to observe which route promotes increased participation and better incentives.

The delay raises several questions about what value-based care will look like under the Trump Administration. Even though it gives more time to stakeholders to review and test these programs comprehensively (and hopefully increase the chances of success under this model), it also could impede innovation, which would further drive up healthcare costs. We hope the latter is not the case.

Contact DataGen to learn more about bundled payment programs. Also, visit our Resources page and follow us on LinkedIn for more learning on healthcare payment reform.

Popular posts from this blog

Alternative payment models: Strategies for success

In this edition of DataGen Insights, we look at how alternative payment model participants can ensure their processes and workflows are optimally set up for success. To help, DataGen listed the top three strategies all providers participating in APMs can employ and created a handy checklist to enable maximum returns and reduce financial risk. Please explore our website to learn more about our  products and services .  Download DataGen Insights today .  We hope you enjoy!

Why it's critical for Primary Care First participants to control and understand leakage

Patients' primary care visits outside of their attributed primary care office, also called “leaked” patient visits, can have unintended consequences for Primary Care First participants. Beginning July 2022, PCF Cohort 1 will face a reduction in population-based payments based on their leakage rate. The payment adjustment will be based on their 2021 claims data and will roll forward quarterly. To calculate your leakage rate, divide the number of qualifying visits and services your attributed beneficiaries have made to care centers outside of your practice (for example, visits to urgent care centers) by the total number of qualifying visits and services your attributed beneficiaries have made. Calculating primary care leakage with claims data alone comes with some unintended challenges. Unfortunately, some circumstances can unfairly and negatively impact a practice’s leakage rate: Nuances classifying care delivered by provider team members: It’s difficult to distinguish

CMMI’s New Enhancing Oncology Model – Deadline Approaching

As the final at-risk period for the Oncology Care Model was closing at the end of June, the Center for Medicare and Medicaid Innovation announced its new Enhancing Oncology Model (EOM). EOM aims to improve the coordination of oncology care, drive practice transformation and reduce Medicare fee-for-service spending through episode-based payment.  What is EOM? EOM is a voluntary, five-year model set to begin July 1, 2023. Patients undergoing chemotherapy for the treatment of cancer will trigger six-month episodes of care.  Eligible EOM participants include physician group practices with at least one Medicare-enrolled physician or a non-physician practitioner who furnishes evaluation and management services to Medicare beneficiaries receiving chemotherapy for cancer treatment.  EOM participants are required to implement eight participant redesign activities to drive care transformation in their practice. Examples include the provision of patient navigation, 24/7 access to an appropriate c