On Feb. 14, the Centers for Medicare and Medicaid Services re-opened the bundled payment program for new applicants over a 60-day window.
These programs have become increasingly popular among orthopedic and spine physicians, and physicians even submitting for potential participation before the 60 days are up will receive valuable information about orthopedics in their region.
Stryker Performance Solutions has years of experience working with healthcare providers on bundled payments, with a specific focus on the CMS program over the past few years. The program has been closed for a year-and-a-half to new participants, but now a slight window has opened for those ready to take advantage of it.
"We see bundled payments as an opportunity for physicians and hospitals to have an economic incentive to work together to improve care, outcomes, patient satisfaction and reduce costs," says Geoffrey Walton, MHA, Vice President of Alignment, Strategy and Reform at Stryker Performance Solutions. "We bring to the table a clinical, operational, actuarial, administrative and legal team necessary for hospitals or physician groups to participate in the program. We take the project management lead on development and implementation of the program providing a key resource to group practice and health system leaders on this fairly complicated opportunity."
The program necessitates taking on risk and reporting requirements to the government, but there are several advantages as well. When done right, the bundled payments increase physician and hospital reimbursement and give them access to valuable data about the industry. In addition to other orthopedic and spine focused webinars, Stryker Performance Solutions is offering educational sessions focused on how to participate in this program. Registration for these webinars is complimentary and may be completed at the link below.
The organizations most suited to take advantage of the Medicare bundled payment program are large physician groups, midsized physician groups and health systems. "We've done a complete analysis of the Medicare claims database for a series of different procedures by hospital and broken that down into quartiles to identify where bundle costs are higher than average and where in the continuum of care there are the biggest cost variances," says Mr. Walton.
Groups already providing the lowest cost of care in their region may not benefit from bundled payments. However, for groups with cost of care higher than the national average, the bundled payment program can provide some low hanging fruit. Through their research, Stryker Performance Solutions experts found the biggest variance in cost of care for one popular DRG Bundle (lower extremity joint replacement — DRGs 469 and 470) was between patients who were discharged to outpatient therapy and those who went to nursing homes after surgery.
"Data shows that people are better off going home and to outpatient therapy after joint replacement than nursing homes when it's possible," says Mr. Walton. "People are shocked when they see that 50 percent of total costs for TJR are out of the hospital, and only 10 percent is physician costs. Providers have the opportunity now to see what is best for their individual patients and reduce costs. It really empowers these groups to make wise decisions and improve the Triple Aim."
The steps health systems or physician groups take to enroll in the program are relatively simple:
• Decide whether to apply to participate and take risk directly in the BPCI program or to apply through a "convener" that may supply infrastructure and take some of the risk
• Fill out the CMS Intake Form and Spreadsheet, which serve as the application before April 18 — this is not a commitment to participate, but rather an application of interest
• Receive data from CMS in September about your local market to analyze for opportunities
• Based on your analysis, decide whether to move forward and participate in the bundled payment program
• Submit the final agreement for participation in November
• Applicants go at risk on their bundles beginning in January 2015
"We encourage people to apply because there are no binding requirements to submit the application in April," says Paul Jawin, JD, fellow Vice President of Alignment, Strategy and Reform at Stryker Performance Solutions. "You get the data from CMS which wasn't available before and you can decide whether to move forward. It's a no-obligation way to gain valuable information and really understand costs and opportunities for bundled payments."
Beyond the Medicare program, regional data will help providers make assumptions about the efficiency of their program during private payer negotiations; providers can show they are the lowest-cost in the area.
Studies have shown bundled payments work better for providers than accountable care organizations. The most successful bundled payments take on an episode or system and improve it; this means providers must have control of all aspects of care. This is easier in orthopedics than in other service lines, especially among otherwise healthy patients.
"What has been interesting is that this is a program for physicians and health systems to collaborate on, and we really do see collaboration with our clients," says Mr. Jawin. "They work together and understand this new system. They put the effort into learning it because they understand this is where contracts are going. Healthcare is moving away from fee-for-service and physicians are learning the new risk models."
According to Mr. Walton, the infrastructure needed to gather data and participate in bundled payments is relatively low. Groups without huge electronic medical record systems can still participate as long as they have a solid grasp on their data and can track their patients. So, are bundled payments in orthopedics and spine a good idea?
"We had a quote from one of our clients that was great. They said: If you are not at the table, you are on the table," says Mr. Walton. "We think there is a lot of opportunity here. We are big physician advocates and we're bullish on physicians taking leadership roles in the healthcare system. This gives economic incentive and opportunity for physicians to step into those roles."
Geoffrey Walton, MHA and Paul Jawin, JD lead the Alignment, Strategy and Reform practice area within Stryker Performance Solutions. Together, they have more than 10 years experience in this field. Mr. Walton and Mr. Jawin may be contacted at spsinfo@stryker.com or (800) 616-1406.
A live webinar focused on the Bundled Payments for Care Improvement Initiative will be repeated on February 25 and March 5. Please register for these complimentary webinars at https://www.marshallsteele.com/ThoughtLeadership/webinars.asp.
More Articles on Bundled Payments:
Roadblocks to Spine Reimbursement: Pave the Way for Bundled Payments
Bundled Payments for Spine Surgery: What's On the Horizon
Independent Predictors of Spine Surgery Cost: Where are Opportunities for Savings