If you’ve recently submitted your organization’s BPCI Advanced application, congratulations! Since the Centers for Medicare and Medicaid Services announced late last year that it would end mandatory bundled payment models for hip fractures and cardiac care, many have worried that this would be a setback for the move to bundled payments.
But bundled payment contracting remains an enormous area of interest for hospitals, health systems, and physician groups, and commercial payers. Bundled payment programs, both those arranged by CMS and by private payers, are designed to align incentives to promote high-quality, efficient care that truly improves outcomes for patients.
CMS released BPCI Advanced in early January with an aggressive application deadline of March 12. The timeframe for providers to ready themselves for the Oct. 1 start of the model is equally ambitious. Since time is short, providers that have built the capacity to implement value-based care models are well positioned for success.
If you didn’t meet the March 12 application deadline for the first cohort of participants in BPCI Advanced, CMS will provide a second opportunity to apply in January 2020. The time is now to ready your organization for participation in bundled payments. Here are three suggestions to help your organization more closely manage episodes of care.
1. Strengthen Your Post-Acute Care Strategy
Until now, many providers have done little to reign in post-acute care costs, which means it constitutes a very large area of opportunity. An Institute of Medicine study found that 73 percent of variation in overall Medicare spending could be explained by variation in post-acute care spending.[i] Higher-cost procedures like those in orthopedics, spine, or other higher-acuity scheduled surgical intervention can represent $5,000 per patient per case of revenue. Reducing the amount of unnecessary post-acute care presents a significant opportunity to drive performance.
Success under BPCI Advanced will require a high-value, high-performing post-acute care network that discharges patients to the right level of care and identifies the best provider for the care that is needed. By discharging patients to skilled nursing or rehab facilities and carefully monitoring their utilization, or by safely discharging them to their homes, providers can reduce the total cost of care while delivering excellent clinical quality.
2. Don’t Overlook the Power of Prehabilitation
Prior to surgery, engaging patients in a prehabilitation program that focuses on education and surgery readiness is also critical to success under bundled payments. The presurgery process ensures patients are following prescribed diet and exercise recommendations, taking prescribed medications, and completing required pre-operative therapies. A comprehensive prehabilitation program educates patients about what’s going to happen during and after surgery, as well as recommended steps to take to ensure a safe, effective recovery.
A patient who goes into surgery in optimal physical condition and with the right mindset and expectations has a swifter recovery, fewer complications, and lower post-discharge costs, all of which are crucial to bundled payment success.
3. Implement a Patient Engagement Solution
For providers participating in BPCI Advanced, an automated patient engagement platform can be an important tool to better manage episodes of care. By delivering personalized educational information before surgery, the platform arms patients with the tools to understand the entire care episode and how to respond to potential challenges. Through daily engagement after surgery, care teams can detect problems early, preventing or minimizing an adverse event. This two-way conversation should continue for at least 90 days after discharge, preventing potentially avoidable readmissions and unnecessary emergency department and clinic visits.
Based on our experience at HealthLoop, costs can be reduced by about $656 per case through automated patient engagement, and those are dollars that drop straight to the bottom line. For an orthopedic surgeon performing total joint replacements whose income per case is $1,500, for example, that’s a 30 percent increase in payment per case.
What Does the Future Hold for Bundled Payments?
The introduction of BPCI Advanced shows that CMS is continuing down the road to value. That means health systems can rest assured that value-based initiatives and investments will pay off, both financially and in quality of care improvements.
Speaking to the Federation of American Hospitals earlier this month, new Department of Health and Human Services Secretary Alex Azar voiced his support for bundled payment models. “Simply put, I don’t intend to spend the next several years tinkering with how to build the very best joint replacement bundle – we want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely.”[ii]
In his speech, Azar outlined four areas of emphasis: giving consumers greater control over their health information; encouraging transparency among providers and payers; using experimental models focused on value and quality; and removing government burdens that impede value-based transformation.
With CMS giving providers the added incentive of making BPCI Advanced an Advanced Alternative Payment Model, over time it will become increasingly advantageous for providers to participate in bundled payment models. This is the direction in which the industry is headed; providers must get on board to remain competitive.
[i] Variations in Healthcare Spending. Target Decision Making, Not Geography. Institute of Medicine, July 2013.
[ii] Remarks on Value-Based Care Transformation to the Federation of American Hospitals. Alez Azar, March 5, 2018. Retrieved from: https://www.hhs.gov/about/leadership/secretary/speeches/2018-speeches/remarks-on-value-based-transformation-to-the-federation-of-american-hospitals.html.
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