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The Beginning of Bundling

Elyas Bakhtiari, for HealthLeaders Media, August 2, 2010

Not knowing when or if the transition will occur, though, has made it difficult for hospital leaders to simultaneously plan for today and prepare for tomorrow. Many CEOs and CFOs know that tighter integration and smoother care transitions will be essential to thriving in the new system, and that will require new infrastructure and changes in organizational priorities, in some cases. But it is difficult to justify spending much of today’s strapped budgets to prepare for a new system with a question mark for an implementation date.

The bundled program for dialysis at least gives both providers and CMS a chance to get their feet wet before jumping in. Everyone still has a lot to learn, and bundled payments won’t necessarily be any simpler than today’s complicated system.

Even though the new rule sets a base payment of $229.63 for a dialysis treatment, there can be adjustments for case mix, new patients, pediatric patients, co-morbidities, low-volume facilities, geographic wage index, training for self-dialysis, and high-cost outlier cases. If each bundled service has a similar number of adjustments and exceptions, the unintended consequences could be problematic.

Although most of the end-stage renal dialysis facilities affected are freestanding, about 600 of them are hospital-based. Those hospitals get their own mini pilot programs to test what it takes to succeed with bundled payments and value-based purchasing. What they learn will be valuable as the system expands to other diseases and treatments.

CMS hasn’t really indicated when that will be. Many questions remain about how bundled payments and true pay-for-performance will work and when they will be implemented. It will be a long transition from the fee-for-service system of today to the hypothetical value-based system of tomorrow.

But it looks like CMS is ready to begin.


Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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