Payors Moving Towards Bundled Payments

By Christine Kern, contributing writer

Though slow, a recently released report demonstrates move towards bundled and automated payments.

A new report on the adoption of bundled payment arrangements finds payors insisting on automating processes, a discrepancy in the speed of feedback data from commercial payors versus the Centers for Medicare and Medicaid Services, and a new appreciation among inpatient providers for the need to provide coordinated care.

The report, “Key Payer and Provider Operational Steps to successfully Implement Bundled Payments,” was commissioned by the non-profit Health Care Incentives Improvement Institute and conducted by Bailit Health Purchasing. Michael Bailit, author of the study and president of Bailit Health Purchasing, explained, “We found that these payers are automating what were previously manual, resource-intensive processes and making significant investments to do so.”

“They're also simplifying their bundled payment methodologies to make them easier for the payer and contracted providers to administer. We anticipate continued expansion of the scope of these arrangements in terms of participating providers and numbers and types of episodes.”

The report found two emerging trends for payors implementing bundled payments. First, a limited number of public and private payors are now committing to bundled payment as a core payment and deliver reform strategy, thus significantly expanding the scope of their efforts to include more providers and episodes. Bundled payment is no longer just in pilot status.

Second, these same payors are automating previously manual, resource-driven processes and are making significant investments to do so. Additionally, they are simplifying their bundled payment methodologies to simplify them for the payor and contracted providers to administer.

The predominant trend is the commitment to develop and implement comprehensive systems of care that continue for the duration of the bundle, and that include all caregivers. Though the samples included in this study were predominantly implementing orthopedic bundles, the approaches used in building systems of care are applicable to other types of bundled care, and with the CMMI Bundled Payment for Care improvement Initiative (BPCI), the types of services utilizing bundled care models have been greatly expanded.

The study also observed growth in the adoption of bundled payment initiatives, even though the number of providers and payors implementing bundled payments is relatively small. The study asserts that with the Medicare BPCI initiative, and three state-based programs implementing bundled payment programs on a large scale, a movement towards broader adoption of bundled payment might well be on the horizon.

Among the report's other findings:

• Inpatient providers, who have historically had little knowledge of post-discharge activities, report gaining new appreciation for the need for coordinated, integrated, systematic care processes. In several instances, data have served to inspire participating physicians to become strong leaders in driving the systematization of care across the duration of the episode.
• Providers working with commercial payers reported receiving regular (usually monthly) reports that convey cost information about each patient under the episode, and a listing of all claims associated with each patient. However, two providers participating in the CMMI BPCI reported that they have not been able to receive timely data from Medicare in the same fashion providers working with commercial payers have, due to a significant time lag (for example, in March 2014 the most recent claims provided by CMS were through September 2013).