Shrinkage of Mandatory Bundle Program a Blow to Value

Philip Betbeze, August 25, 2017

Hospitals and health systems that made preparations to participate in CMS's bundled payment programs are left in the lurch, but those who failed to prepare will be rewarded.

Want to see a battleship turn on a dime?

You're about to get your chance, because by proposing to cancel its mandatory cardiac and expanded joint replacement bundles, the Centers for Medicare & Medicaid Services expects many hospitals and health systems to do just that.

After months of preparation, hospitals and health systems must scale back their plans to participate in what were formerly mandatory bundled payment programs.

Related: Docs, Hospitals Respond to CMS Retreat on Bundled Payments

Some may be happy to do so, because they recognize the potential to undermine profitable service lines and will be glad to jettison the expense associated with preparing for an unfamiliar way of paying for complex medical care.

Moody's Investor's Service calls the decision a "credit positive" for most nonprofit hospitals.

But others that have expended time, effort, and investment into preparing will find many of those efforts wasted.

Nearly no one will say that they don't want to achieve more value-based reimbursement in healthcare, partly because it's obviously the right thing to do, but mainly because healthcare costs too much and isn't of high enough quality.

There are legitimate disagreements on how to achieve better value, however.

The idea behind mandatory bundles was that bundled payments for specified conditions would incentivize doctors, hospitals, and post-acute providers to make better, more economic decisions regarding patient care. Because low quality begets higher costs.

Related: Hospitals Eye Continued Red Ink for CJR Bundles


Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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