Bundled Payments for Colonoscopy & Beyond: Can GI Practices Build a Viable Model?

K. Calisher - Head ShotThe call to embrace risk sharing and alternative payment models in healthcare is growing louder, but can these alternative models work in practice?

"We feel strongly that there is a potential upside to bundled payments for GI, however there is a wide array of variables that need to be carefully considered when weighing the actual viability of the model," says Kevin Calisher, president of GI practice and endoscopy center  management consulting company Calisher & Associates. These variables include:

•    Payment logistics. In the typical payment model in use in most GI practices and endoscopy centers, the payer is responsible for ensuring reimbursement reaches the proper parties. Under a bundled payment program, this task would shift to the provider side. The facility, most likely, would receive one check and be accountable for disbursing payment to the physician, anesthesia provider, pathologist and any other involved party.

"This responsibility comes with a significant amount of additional time, overhead and potential liability," says Mr. Calisher. "So depending on the rates that we are dealing with under the bundled payments, the immediate question is will the center be appropriately compensated for all of the additional aspects involved in the process of the bundled payment model?"

•    Provider coordination. A truly effective bundled payment program demands cooperation and mutual trust amongst all providers. In some scenarios this may be a simple step to take. For example, Calisher & Associates works with a St. Louis endoscopy center owned by five gastroenterologists from the same practice. The  practice has in-house pathology services and partners with one anesthesia provider group. But, this is hardly the typical situation. Endoscopy centers can host non-physician owners, use multiple pathology labs and partner with more than one anesthesia provider group.

The logistics of ensuring proper payment reaches each party in each case is daunting, not to mention the issue of making certain all providers are on board with the bundled rates. "You can see how potential challenges and complications really start to escalate as different variables are introduced into the equation, and how things could become exponentially more difficult for the physicians and the centers depending on their particular situation," says Mr. Calisher.

•    Post-procedure concerns. A bundled payment model for colonoscopy will likely include repeat colonoscopies for issues such as poor bowel preparation or post-polypectomy bleeding. "Quite often the direct costs for these particular cases sustain a significant increase when supplies such as APC probes are used to control bleeding; compounding the costs by adding a repeat procedure with no additional reimbursement can seriously compromise the financial viability of the bundled payment model," says Mr. Calisher.

The question becomes one of risk versus reward. Going forward in healthcare, providers and payers are expected to partner to curb healthcare costs. Though not without risk, bundled payments may be a key tool to achieve this goal.

"The intent behind the bundled model is to reduce rising healthcare costs. So, if insurance companies are not open to exploring mutually beneficial rates on the bundle, it could directly conflict with the viability of the model for endoscopy centers and physicians," says Mr. Calisher. As with any new provider-payer initiative, negotiating acceptable bundled rates will take time and effort to educate payers. Demonstrate quality outcomes and a willingness to work with the payer to produce a mutually beneficial bundled model.

The American Gastroenterological Association released a model for colonoscopy bundled payments, creating the basic skeleton any interested GI practice or endoscopy center can use as a springboard. The AGA model includes:

•    Pre-procedure professional services
•    Facility fee
•    Physician fee
•    Anesthesia services
•    Pathology services
•    Post-procedure services

"Overall, I think if we can find a model that works for colonoscopy, we could easily find a model for EGD procedures as well," says Mr. Calisher. GI diseases generate approximately $142 billion in direct and indirect costs each year. Implementing innovative strategies, such as bundled payments, across more than one procedure could play a role in curbing this economic burden.

The bundled payment model, though in its infancy, could be a stepping stone for more innovation in the ASC industry. "Price transparency in the bundled model could definitely benefit ASCs," says Mr. Calisher. ASCs and endoscopy centers willing to take on a bundled model and reveal pricing structure will be situated as key players in a field that has mounting demand for lower costs and more transparency.  

More Articles on Gastroenterology:
How Will Bundled Payments Affect GI? Three Gastroenterologists Chime In
Reimbursement, Thriving in the Age of Accountable Care & More: Q&A With AGA Institute President Dr. John Allen
CMS Approves GIQuIC as PQRS Qualified Clinical Data Registry: Q&A With GIQuIC Director & President Dr. Irving Pike

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