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CMS Bundled Payment Changes Untenable?

Karen Minich-Pourshadi, for HealthLeaders Media, December 10, 2012

"A big concern applicants have is that they don't have access to the physician's billing data—unless they own the physician practice. So the hospitals have the Part A information but not the Part B ... but that data is going to have an impact on [the hospital's] level of risk for readmissions and on the amount of the discount," says Baggot. "Managing across the continuum of care is new for many hospitals, so many hospitals still don't have much of an idea on what's happening with physicians outside of their own four walls—but with [Medicare] bundled payments it will affect them."

The bottom line is that CMS' revised CMMI bundled payment model has increased the level of risk for provider organizations, Baggot says. However, it is still one of the most advanced payment models for a provider organization to participate in. She notes that CMS has spent several years consolidating fiscal intermediaries so that all providers in a region are on a single fiscal intermediary for Part A and B billings. That means CMS is more prepared to make a single bundled payment to an organization than perhaps many commercial payers.

"Some people think it will be easier to work with a commercial payer. I don't think it's easier. What's challenging there is that many payers aren't prepared to execute on this [payment model]. They have the data but they can't figure out how to get at it. And the commercial payers' readiness is so variable across the country," says Baggot. "Regardless of these changes, I don't believe hospitals and physicians can do nothing [with bundled payments]. However, they need to scale their level of participation in bundling logically. Don't jump into it with both feet, but don't do nothing either."


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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1 comments on "CMS Bundled Payment Changes Untenable?"


Maria K Todd,MHA Phd (12/10/2012 at 5:04 PM)
As a long time advocate and successful expert in bundled payment methodology, I can state with the courage of my conviction that the methodology for this bundled payment from CMS is fatally flawed. IF I were a provider, I would drop out if forced into this nightmare of politics and fantasy. I have published extensively on how to do it correctly, I've published case studies, and disasters. Bundled payment methodology is alive and well all over the world, and successful too. The problem here is the way the policy makers set up the system. It needs a complete overhaul to work. If I say more, it is going to sound like I am selling consulting from the pulpit, so I'll stop here. And no, hiring me won't "fix" what's broken. Maria K Todd, MHA PhD Author The Managed Care Contracting Handbook, 2nd ed., IPA, PHO, MSO Development Strategies The Physician Employment Contract Handbook, 2nd ed., and Physician Integration and Alignment: IPAs, PHOs, MSOs, ACOs and Beyond.