In April of 2016 CMS implemented the first ever mandatory bundled payment for total hip and knee (THA/TKA) procedures for approximately 800 hospitals in 67 metropolitan statistical areas (MSAs). This reimbursement model assigns an expected cost for each THA/TKA episode. Providers who keep costs under the bundled amount during the 90-day episode keep the savings, while providers who exceed the anticipated costs will operate at a loss for that episode.
Since the initial announcement of the mandatory bundled payment program, CMS has expanded bundles to surgical hip/femur fracture (SHFFT), acute myocardial infarction (AMI), and coronary artery bypass graft (CABG). The idea behind the bundled payment programs is to incentivize providers to collaborate together to reduce the total cost of providing care. This is a stark difference from the fee-for-service model providers are used to operating under. While there have been delays in the implementation of the mandatory programs, one thing has become clear, the concept of providing higher quality care at a lower overall cost isn’t going away.
In the countless conversations I’ve had with providers over the last 12 months, I’ve picked up on what progressive and proactive providers are doing to position themselves for the future of bundled payments. Providers who are looking to maximize incentives are taking the following steps: building teams and networks, implementing new processes, and adopting technology.
Step 1: Building Teams & Networks
- The hospitals selected for CJR and the cardiac expansion are working to put the right infrastructure in place to effectively manage patients through the full episode of care, preoperatively through 90-day postoperative. One common denominator across these teams is the Navigator. Typically, a Navigator is a designated staff member tasked with being the lead on coordinating bundled payment patient’s care during the episode.
In addition to building internal teams dedicated to bundled patients, hospitals participating bundled payment initiatives are also looking to better structure their networks. By developing a preferred network of post-acute providers, hospitals are looking to collaborate more effectively and help ensure lower costs of care. Most often, these preferred providers are the SNF and HHAs that can prove and maintain quality outcomes.
Step 2: Implementing New Processes
- Once the internal and external teams are in place, hospitals are layering on new processes throughout the continuum of care. Common observations across hospitals and systems here include preoperative education classes, post-acute planning before admission, and post-acute network monitoring. One component of post-acute network monitoring that has already proven significant savings is where hospitals set utilization expectations on SNF length-of-stay.
Uncovering new processes that span the entire care episode is frequently a new undertaking for care providers. To maximize incentives with the new payment structure, leadership needs to evaluate every aspect of a patient’s care journey to identify potential gaps and reduce the likelihood of an adverse event.
Step 3: Technology Adoption
- After establishing support teams and processes for bundled payment programs, the next step in ensuring a successful program is to implement technology that allows your team to operate at maximum efficiency. There are many vendors that offer products in this space, but few that check all the boxes on patient engagement and care coordination. Better engagement with the patient throughout their episode of care and enhanced communication amongst the team of care providers can create an optimal navigator-to-patient ratio and lead to better outcomes such as reduced readmissions and increased HCAHPS.
By following these steps, providers who are tasked with succeeding under the new payment model will be well-suited for the challenge. Learn more about how CipherHealth can be an effective technology partner to your organization as you prepare for bundled payments and value-based purchasing.