News Roundup on Bundled Payments

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Rhonda Oakes By Rhonda Oakes 
Regulatory Analyst, Change Healthcare
News Roundup on Bundled Payments

The Centers for Medicare & Medicaid Services (CMS) continues to press forward on the Bundled Payments for Care Improvement (BPCI) initiative that provides one payment for a particular treatment regardless of the care setting. The purpose is to study whether CMS can cut costs while providing coordinated, higher quality care to patients.

In theory, providers of different services including physicians, hospitals, rehab centers, nursing homes, and home health organizations receive reimbursement in proportion to their participation in that care episode. The exact funding formula depends on the agreement that each provider enters into for care delivered. When incentives are properly aligned, providers work together across the continuum of care with one thing in mind—taking better care of patients.

Home health care organizations will play a critical role in many of these bundled payment initiatives. Home healthcare is the least costly post-acute care setting, which could position the industry for a more prominent role in bundled payment models in the future.

Home Health Use Rises in Bundled Pay Models

An analyst report for CMS on Year 2 of BCPI for Models 2-4 shows an overall decline in the use of institutional post-acute care in favor of home health care. Among cardiovascular surgery patients who received any post-acute care, the number of patients discharged to an institutional setting declined nearly 20 percent. In contrast, those using home health providers had an additional 1.5 visits relative to comparison episodes. Twenty-eight home health organizations are participating.

“For Model 2 orthopedic and cardiovascular surgery episodes, participants’ efforts to reduce episode spending are achieving expected results,” the report stated. “For these episodes, which account for a large share of Model 2 episodes, we saw a statistically significant shift from more expensive institutional PAC [post acute care] to less expensive home health care among beneficiaries discharged to any PAC setting. This shift was the major contributor to the larger relative decline in total payments during the anchor stay and the 90-day (post-discharge period) for orthopedic surgery episodes.”

The report covered these models:

  • Model 2, the most comprehensive, includes the hospital stay and all concurrent professional services and post-discharge services for either 30, 60 or 90 days, including readmissions.
  • Model 3 begins when the hospitalization ends with a referral to a post-acute care provider, includes professional services and runs 30, 60 or 90 days, including readmissions.
  • Model 4 includes hospitalization, concurrent professional services and readmissions within 30 days of discharge that are not specifically excluded from the bundle.

Final Rule Issued for CJR Update, New Cardiac Models

CMS has released the final rule for the Episode Payment Models (EPMs) that update the existing Comprehensive Care for Joint Replacement (CJR) Model and introduces three new measures for Cardiac Rehabilitation Incentive Payment Model. You’ll find more specific details (and participation areas) by clicking on each link below.

Participation by acute-care hospitals is mandatory within the selected geographies. The models begin July 1, 2017, and cover a period from hospital intake to 90 days post-discharge.

Hospitals will receive greater latitude, in certain instances, to direct care to lower cost settings such as home health. Specifically, the models allow “payment for certain types of physician-directed home visits for non-homebound beneficiaries.”

EPMs are a time for the home health industry and hospices to shine. I encourage all hospices to read the relevant pages of the final rule and the CMS response about hospice care, as it is part of the EPM on pages 315-317 of the 1,759-page rule. Although not all post-acute care providers will be located in the identified geographical areas, the patients in your community that will return from those areas will need your organization listed as part of the “complete list” that must be offered to the EPM beneficiary when applicable. The requirement in the final rule is in addition to any “preferred lists as applicable.”  EPMs will be an integral part of alternative payment models that drive integrated care processes focused on the patient and the care they need to achieve the best possible outcomes.

The new rule can provide your organization with an opportunity to advocate for patients in your community. Additionally, it will be beneficial for your organization to be included on the lists that are required to be given to the EPM beneficiary.


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