Bundled Payment Program Progress: 6 Things to Know

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As healthcare providers and payers face seek to move from fee-for-service to value-based payment, a considerable number of them are implementing bundled payment plans.

According to a study commissioned by the nonprofit Health Care Incentives Improvement Institute and conducted by Bailit Health Purchasing, some public and private healthcare payers are beginning to commit to bundled payments as their core payment reform strategy, meaning the reimbursement model is no longer limited to pilot program status.

Here are six key things to know about bundled payment plans and their growing prevalence in the healthcare industry.

1. A payment "bundle" includes a set price meant to cover every element of clinical care and support for a specific procedure or condition.

2. Bundled payments hold considerable appeal for healthcare industry stakeholders, according to research from Strategy&, formerly Booz & Co. Seventy-eight percent of hospitals, 80 percent of payers and 50 percent of physicians find the concept appealing.

3. Still, bundled payments aren't the most prevalent value-based payment model, according to a report from Availity, a revenue cycle management and business solutions provider. While the report found 31 percent of 540 healthcare providers surveyed participate in a bundled payment plan, accountable care organizations (38 percent), pay-for-performance programs (49 percent) and Medicare quality incentive programs (53 percent) had higher participation rates.

4. CMS' Bundled Payments for Care Improvement Initiative is currently letting healthcare providers take part in a test of bundled payments' power to drive more coordinated care across various settings. The BPCI initiative involves four different payment models, depending on the type of healthcare providers involved and the nature and time frame for services included in the bundle. The BPCI program offers several potential strategic opportunities for providers, such as reducing costs, improving quality, providing a platform for more meaningful physician engagement and allowing hospitals to gain a better understanding of the total cost of care.

5. Providers participating in bundled payment plans so far have reported positive results: More than 80 percent of hospitals with bundle experience have seen greater patient engagement, increased alignment with physicians and further reduced administrative costs, according to Strategy&.

6. Based on in-depth interviews with seven provider organizations and one BPCI awardee convener, the recent HCI3 study concluded bundled payment plan success for providers depends on the following:  

  • Valuing leadership that articulates a unifying patient care vision and challenges participants to creatively develop strategies;
  • Mapping the arc of patient progress across the episode timeframe and quickly identifying patients who deviate from the expected path;
  • Tracking costs and utilization in real time;
  • Using a quality improvement model for care processes;
  • Integrating unaffiliated post-acute providers;
  • Adjusting the organizational structure to support and sustain the change in care delivery design; and
  • Continually communicating with patients involved in the episode.

More Articles on Bundled Payments:
6 Value-Based Payment Models Most Used by Healthcare Providers  
75% of Healthcare Providers Participate in a Value-Based Payment Model  
Financial, Clinical Considerations When Bundling Payments


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