Under the Patient Protection and Affordable Care Act, the HHS Secretary has the authority to scale any pilots after the CMS actuary can attest that savings has occurred with no decrease in quality.
The recent move by CMS to require bundling of reimbursement for hip and knee surgeries is just the beginning of its efforts to link provider profits with costs and quality metrics, analysts say. Next year, the agency will launch the Oncology Care Model to incent cancer doctors to reduce hospital and pharmacy costs, in part through better care coordination.
CMS is likely to move on to other services shown to be ripe for improving quality and cost effectiveness.
The most likely next targets are several medical conditions that have demonstrated positive outcomes under the Bundled Payments for Care Improvement (BPCI) Initiative, which offers voluntary bundling for 48 conditions. The standouts from that model include congestive heart failure, pneumonia, and stroke.
Under the Affordable Care Act, the HHS Secretary has the authority to scale any pilots after the CMS actuary can attest that savings has occurred with no decrease in quality, says Richard Bajner Jr., managing director with Navigant Consulting in Chicago.
Orthopedics Bundled Payments a Classroom for Value-Based Care
CMS has been working toward bundled payments for some time and is finally pulling the trigger, says Rob Lazerow, practicing manager with The Advisory Board Company, a consulting practice based in Washington, DC. Good results from earlier efforts like the Acute Care Episode Demonstration, which bundled orthopedic and cardiovascular procedures, spurred CMS to act on the BPCI results sooner than some might have expected, he says.
Bundled Payments' Disruptive Effects
"I think it's safe to assume that CMS is betting big on the promise of bundled payments to make care higher quality and more efficient," Lazerow says. "It is likely that they are going to expand to more conditions after starting with hip and knee, and I expect they will continue to focus on the areas where they have been experimenting with bundled payments in the past. I think that is much more likely than introducing entirely new areas for bundling."
Knee and hip procedures have been the most popular procedures for voluntary bundling under the BPCI, but Lazerow notes that congestive heart failure chronic obstructive pulmonary disease (COPD) also were high on the list. CMS is likely to factor that into deciding where to go next with mandatory bundling.
Percutaneous coronary intervention (PCI) is another likely option for bundling based on past efforts to improve quality and cost, says Andy Ziskind, MD, managing director at Huron Healthcare, a consulting company based in Chicago.
Politically Sensitive Services
There also are some services that could make sense for bundling, but which Ziskind suspects CMS may shy away from for political reasons. Trying to bundle reimbursement for care involving breast cancer or HIV treatment, for instance, "could be perceived politically as rationing of healthcare," Ziskind says.
Even though the BPCI experience is likely to guide CMS in future bundling mandates, BPCI is not necessarily a roadmap for how any of those services will be bundled, Bajner explains. The Comprehensive Care for Joint Replacement Model (CCJR) is different from the BPCI in several important ways. For instance, the CCJR requires that episodes must initiate with a hospital (not physician or a post-acute care provider) and reconciliation will be annual rather than quarterly as with BPCI.
"There also is a transition in setting the target price from provider historical experience, as with BPCI, to include a regional rate. Over time, by Year 4, provider target prices will be based entirely on regional rates," Bajner explains. "The concept of benchmarking individual performance to a regional benchmark has also been introduced in the Oncology Care Model; therefore, that's now a trend on Medicare programs."
Similar to the trend to bundles being expanded from inpatient setting to include post-discharge care, Bajner and Lazerow both expect to see bundling grow beyond inpatient-triggered episodes to include ambulatory episodes, post-acute bundles with a single price regardless of site of service, and chronic bundles.
More bundling could be good news for many healthcare leaders, but certainly not all, says James Laskaris, EE, BME, emerging technology analyst with MD Buyline, a hospital consulting company in Dallas, TX.
Cost Variability
"If you're a good-performing hospital, tightly aligned with physicians, using the leading technology, and you have good follow-up care with patients, this could be a very good thing," Laskaris says.
"If you're a hospital that is not very successful with long term care, especially those that deal with some really sick patients, this might not be good. The sicker patients cost more and this is capitated payment."
Most providers are doing a reasonably good job of introducing standardized care processes in the inpatient phase, Ziskind says. But most of the variability comes in post-acute care, and that will drive hospitals to invest more in IT systems that optimize communication among caregivers, he says. Hospitals also will have to focus on volume, ensuring they have enough physicians, patients, and procedures to deliver quality and cost efficiency that meets CMS metrics, Ziskind says.
Bundling Beyond CMS
In the move toward bundling, most healthcare leaders are willing to share claims data to help evaluate performance across the care continuum, Bajner says, but they worry that delays in data sharing could impact the ability to quickly engage physicians in standardization and improvement efforts. Post-acute providers have expressed concern about the development of preferred partnerships without having the full picture, specifically the ability to risk adjust patients on only the claims data provided to financially evaluate episodes.
Bajner expects commercial insurers and providers to follow CMS's lead.
"As payers and providers gain experience with bundled payments and grow as a methodology for reimbursing for services, providers will explore opportunities to either partner with commercial payers on high volume conditions and/or explore ways of directly serving employers with a bundled payment partnership," he says. "We anticipate a growth in bundled payments in the commercial market, as well as by Medicaid."