Creating Value in Bundled Payments
by John Banks Powell
A debate has been brewing over the past few years surrounding the Center for Medicare and Medicaid Services (CMS) mandatory and voluntary bundled payment programs. The eventual goal is to shift healthcare providers from fee-for-service payment models to those that are value-based, the most popular being mandatory and voluntary bundled payments.
Many providers have said bundled payments prove challenging and they often don’t know where to start with implementation and execution. Others also doubt the programs will have the successful outcomes that they are designed to have due to incentives the limit utilization. However, some progressive providers have already positioned themselves for value-based programs by putting certain processes and structures into place. So the question is: Where do providers start and how can they ensure success with a bundled payment structure?
Understanding the Purpose and Challenges of Bundled Payment Programs
Let’s start from the beginning with what is the purpose of bundled payments? Many may not know, but the history of bundled payments spans nearly three and a half decades. Since Medicare started to pay fixed amounts for reimbursements based on diagnosis in 1983, the foundation has been set.
Since then, the bundling of payments has expanded to include more than a hospital stay, but also all of the care activities for one care episode. The programs are designed to promote high-quality care, and the system rewards providers that care for patients during the entire care episode under a predetermined cost. Conversely, if a provider goes over the predetermined budget, or target price, it is required to pay the difference back to CMS.
The challenge for providers is that bundled payments require more coordination that is tailored to individual patient preferences than traditional fee-for-service models.
Scaling this type of care management is typically a new process that will require better reporting, communication, and engagement workflows. Additionally, many providers do not have consistent processes around communicating with patients prior to their arrival or after they have left the facility to identify adverse events that could lead to a rehospitalization or ED encounter.
As providers work closer together and address the common challenges of engaging patients, gathering information, and acting upon data, bundled payment programs create greater risk of uncoordinated and inefficient activities. The most common question that bundled payment participants ask is, “Where do I start?”
Where to Start with Bundled Payments
In order for providers to have success with bundled payment models, they must:
- Understand their current team and workflows
- Identify repetitive and time-consuming tasks
- Implement technology and efficient processes for success
- Gather data and identify actionable improvements
Their first steps should always be to take stock of resources and how they are currently being used. Any noticeable inefficiencies should be addressed either through better workflows or technology enhancements. Once these steps have been addressed, it is critical to gather the relevant data to drive informed improvements over time.
Achieving Success with More Efficient Processes
Even if providers/healthcare organizations are not convinced of the benefits of bundled payments, helping them to create a structure that drives proactive patient engagement will have a positive impact in the long term.
By implementing efficient processes to reach out to eligible patients with calls and/or text messages, providers can engage with patients multiple times and prioritize interventions based on the need for additional support. In this case, automation is the answer to empowering organizations to efficiently marshal the correct resources to meet patient needs.
As the healthcare industry searches for more value during care episodes, amplifying resources through automation and standardized processes will minimize the chance of error and keep patients on the road to recovery. Leveraging the right tools to engage patients can help create a better experience for the patient and their families from pre-arrival through recovery. In turn, this will reduce costs of care and help maximize bundle program reimbursements.
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