How Hospitals Can Prepare For The Coming Wave Of Bundled Payments

In December 2016, the Centers for Medicare & Medicaid Services (CMS) finalized regulations regarding the Cardiac Rehabilitation (CR) Incentive Payment Model. This new bundled payment program affects over 1,100 hospitals nationwide and how they are paid for their heart attack and bypass surgery cases. The goal of this program, which has joined the orthopedic bundling program introduced in 2016, is to “improve patient outcomes and help keep patients healthy and out of the hospital,” according to CMS.

To prepare for these new bundles, and the others that are sure to follow, hospitals must embrace the concept of value over volume.

This article found at Health Leaders Media by Philip Betbeze follows several hospitals in their journey to bundled payments dating as far back as 2009.

“This kind of transformation isn’t a temporary one though, given the infrastructure requirements, says Reeve. “If you’re going to be in bundles, you have to do them right, and that means committing resources to data, measuring with data, and working with doctors in a wholly different collaborative fashion,” he says…

“Lowering the appropriate level of care to really what it should be rather than the easiest place to get into has driven most of the savings, but still a quarter of savings is coming from operational efficiency because everyone’s so engaged and aligned,” says [Gary] Whittington [CFO of Baptist Health in San Antonio, TX].

Part of that comes from achievements in the supply chain, especially with implants. With a standardized order set, Baptist now pays on average between 60% and 67% of what it was paying six years ago. That one standard order set for joint replacement has greater than 95% adherence.”

Read the entire article here: Get Comfortable With Bundles

With the move toward bundled payments showing no signs of slowing, hospitals must continue to adapt. Hospitals relying heavily on payment from CMS to make their ends meet will be facing more bundled programs over time, and private insurers will be sure to follow. In order to prepare for this, hospitals can look to find efficiencies and other gains to offset the increased risk that comes with bundles. Such opportunities include working more closely with doctors and staff to streamline operations, using data to improve outcomes and cutting down on supply expenditures to increase margins.