Rehab Select Blog

The Bundled Payment Model: Getting in on the Ground Floor

Posted by Bobby Stephenson

Oct 3, 2016 8:00:00 AM

The Bundled Payment Model: Getting in on the Ground FloorThe bundled payment model has emerged as the favored alternative to the traditional fee-for-service model in the ongoing shift towards value-based healthcare reimbursement. That status, already made plain by the rapid growth of bundled payment programs offered by private payers, including healthcare systems, insurance companies and large employers, has been cemented by the growing number of bundled payment initiatives rolled out by government payers. Perhaps the most notable of these are several bundled payment initiatives undertaken by the Centers for Medicaid and Medicare Services (CMS) that bundle payments for care provided to fee-for-service Medicare beneficiaries.

An interesting aspect of these CMS initiatives is that, while participation in the earliest programs was voluntary for providers, their latest initiatives mandate the participation of providers in certain geographic areas selected by CMS. Additionally, in the latest initiative proposed by CMS—bundled payment models for high-quality, coordinated cardiac and hip fracture care, set to launch on July 1, 2017—physicians who have significant participation in bundled care models will be provided pathways to qualify for financial rewards through a proposed Quality Payment Program. The purpose of that particular provision is to encourage greater physician participation in the bundled payment model, helping the agency meet the goal of transforming the healthcare delivery system.

What that means for providers is that the bundled care model is rapidly gaining ground in the healthcare industry. Its progress, given the support of government payers, can be expected to continue to accelerate. Given these facts, stepping in on the ground floor by getting involved in current and upcoming bundled payment initiatives is wise. So what advantage is there in early participation?

Advantages of Early Participation

Perhaps the most important advantage of early participation is the ability to help shape the bundled payment model. This value-based model is still, at this point, in its infancy. The current and proposed CMS initiatives—as well as many plans put forth by private payers—are works in progress. Results of these programs are being carefully tracked to determine their effects on cost-efficiency and quality of care. Based on those results and the input of participants and patients, adjustments to the rules, procedures, and structures of these arrangements will be made as necessary to optimize their benefits. Providers who get in on the ground floor position themselves to be part of the process, helping to ensure that their interests and that of their peers and their patients are adequately represented as that process moves forward.

Getting in on the ground floor as bundled payment programs are launched can soften the blow of the shared risk aspect of the bundled payment model. This is certainly true of the Medicare bundled payment initiatives, in which penalties for failing to meet cost and quality benchmarks are phased in gradually, allowing providers a grace period to tackle the learning curve of this relatively new payment model and make the necessary adjustments in policies, practices, technology and infrastructure necessary for successful participation.

Experience and preparation are other important advantages of getting in on the ground floor. As more and more payment arrangements enter the healthcare landscape, providers who have experience with the bundled payment model will be steps ahead of those who have hesitated to throw their hats in the ring. When it comes to performance-based reimbursement, knowing the ropes and having the necessary infrastructure in place early is a big advantage, giving providers the ability to navigate emerging new bundled payment plans to the best advantage of their patients and their practice or facility.

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Topics: Bundled Payment