Are You Ready for Bundled Payments?

Every day seems to bring more news from CMS about bundled payment programs. It is becoming increasingly clear that Medicare considers bundling as their preferred method of payment as they move toward their goal of tying 90% of payments to quality or value by the end of 2018. Why bundles? Well, quite simply, that’s where the money is. Study after study and many demonstration programs have shown that this reimbursement model has the most power to bend the proverbial cost curve. In 2017 it was announced that CMS would bundle payments for orthopedic and cardiac services. Payments will be bundled for the care of a patient with an acute myocardial infarction (AMI), coronary artery bypass grafting (CABG), and surgical repair of hip fractures. (Those organizations now mandated to participate in the comprehensive joint replacement or CJR program will also be bundle-paid for hip fractures).So, how do you prepare to operate successfully under bundled payment programs? Here are a few key steps that Coker Group recommends to prepare for this significant change in the healthcare economy:

  1. Know your processes of care: Utilize proven care mapping techniques to understand, connect, and coordinate care across the continuum for care processes that are going to be bundled. Once you understand your current care processes, you can ensure that they include current best practices and measure results (both quality and costs) that can be used to iterate them further via a continuous, data-driven, process improvement system.
  2. Know your costs of care: Even if you are being paid under a global budget, you must know your costs to determine whether this budget provides you with an adequate margin. If not, costs must be eliminated (without sacrificing quality and patient safety) to meet the targeted budget. Use activity-based cost accounting to determine your costs and avoid inaccurate proxies for cost, such as charge-to-cost ratios.
  3. Clinically integrate your providers: Coordinated care delivery is the name of the game with bundled payments. Older, disjointed care delivery organizations have a hard time operating under bundled models. Clinically integrated networks can better deliver high-quality, cost-effective, collaborative care in this environment.

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