Non-binding letters of intent for the CMS Bundled Payment Initiative are due next Friday November 4. This initiative allows physicians and hospitals to collaborate to improve quality and reduce costs, and to share the savings with the physicians. As opposed to the ACO payment program that hasn’t been part of a previous demonstration, bundled payments have been piloted with the Acute Care Episodes (ACE) demonstration project that’s currently ongoing, and with the heart bypass demonstration of the late 1990s, and participants have had generally favorable results. Participants have wide latitude to select DRGs for inclusion in the initiative and to design their applications around the areas in which their relationships with physicians have the greatest potential for success. Since this is not a shared savings program, hospitals can participate in the bundled payment initiative and also in an ACO. Therefore, participation in the bundled payment initiative can provide an environment for developing meaningful, financially-backed relationships with physicians before committing to a capitation-based ACO model.
Hospitals submitting bundled payment applications can request historical data from CMS for their service areas that includes hospital, physician and post-acute provider claims. This allows hospitals a rare look at the full scope of services that surround an inpatient episode, which would allow evaluating some of the contributing factors for readmissions and quality-related metrics, among others. Viewing and analyzing this data with the respective providers can contribute to a more data-based conversation about patient care with these providers. Access to this data should provide value to a hospital even if it doesn’t subsequently decide to participate in this program, and CMS will cover the cost of providing this data, which is generally several thousand dollars. CMS provides a partially-completed research application and data use agreement here: http://www.innovations.cms.gov/documents/payment-care/CMS-20107G-508_9.11.pdf
Bundled payment programs are simpler to implement than population-based systems like ACOs, which require generally require a PCP-based provider network along with significant investment in organization development, information technology and care management programs. Therefore, many commercial payers have indicated interest in developing these programs as alternative payment systems, and participating in this program may allow hospitals to develop the physician integration and analytic infrastructures to participate more effectively in these programs.
The CMS application information for the bundled payment initiative is at http://www.innovations.cms.gov/areas-of-focus/patient-care-models/Bundled-Payments-%20Care-Improvement-Application.html, Some additional information on this program is at http://www.singletrackanalytics.com/category/blog-category/health-policy/bundled-payment-pilot