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Bundled payments — The market and the message are becoming consistent

In the wake of the Comprehensive Care for Joint Replacement Program, going into effect April 1, 2016, it is has been made abundantly clear — bundled payments are not only here to stay, but will continue to expand their reach. Interest in bundled payments continues to increase as providers are doing what they can to prepare for, and become educated on, these newer payment reform strategies.

The bundled payment market is growing steadily, led by CJR but also with growth in Medicaid, commercial insurance and self-insured employers. There are many beta projects with commercial insurers but no single model has become dominant yet. The CMS programs (Bundled Payments for Care Improvement Initiative and CJR) could serve as templates but currently commercial bundles are generally "baked from scratch." The inability of hospitals and physician groups to process claims is an impediment to the development of true prospective payment bundled payments.

It is generally easier to affect standardized care redesign in surgical episodes than in medical episodes. The predominant episode of care in bundled payments is Total Joint Replacement of the Lower Extremities. TJR is a high-volume episode with a clear care redesign opportunity to eliminate the variation in post-acute care settings.

Whether you are voluntarily enrolled in a bundled payment model or currently mandated to participate in the CJR program, it is vital to have administrative and physician leadership, clearly defined goals with the "end in mind," project management resources to help prioritize goals and keep momentum and engagement/alignment of physicians, PCPs and specialists.

The critical success factors we stress are:

  • Episode Data Collection and Analytics: Understand where you are, where you need to focus and how your results are emerging
  • Care Redesign Implementation: Episode-focused care redesign that improves quality care, reduces variation and decreases cost across the continuum
  • Provider Alignment: Creating the right formal and informal agreements to drive provider alignment through impactful engagements that improve care and reduce cost under the bundle
  • Patient Engagement and Navigation: Personalized web-based care plans that digitally connect you to your patient while guiding them on their joint journey

Consulting firms can provide the support and expertise that hospitals and physician groups may not have available to tackle such new and complicated initiatives. Most hospitals in BPCI or CJR are utilizing third-party consulting companies to perform the data analytic and reconciliation work. In addition to sophisticated data analytics capabilities, commercial insurers, self-insured employers, hospitals and physicians may also hire actuaries that assist them in understanding and mitigating their risk. Stryker Performance Solutions is one option, as our suite of services provides a comprehensive solution for total joint episode management.

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Private healthcare costs spiked 37% during ACA's 1st 4 years: 5 observations
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