Easing bundled payment requirements: A chance to accelerate value-based care

Last month, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule addressing bundled payment programs that have been, or are going to be, implemented by the Centers for Medicare & Medicaid Innovation (The CMS Innovation Center)—a department established by the Affordable Care Act to serve as a test bed for value-based care initiatives.


In the proposed rule, CMS substantially decreases several bundled payment programs, including the Comprehensive Care for Joint Replacement (CJR) Model—making the program mandatory for only 34 geographic areas instead of the 67 that were previously required. The remaining areas will have the option to opt in or opt out of the program. In addition, the Episode Payment and Cardiac Rehabilitation Incentive payment models, which were due to begin this coming January, were cancelled. Note that CMS did not alter the Bundled Payments for Care Improvement Initiative (BPCI), which is the largest bundled payment program and is scheduled to run through September 2018. It is possible that some of the previously mentioned models could be rolled under the BPCI course.

What prompted the changes
CMS’s actions point to a fundamental priority shift by the administration, signaling it has concerns that mandatory bundled payment participation is too burdensome on providers, particularly small and rural physician practices. At the same time, the changes underscore the administration’s desire to offer greater flexibility in how organizations get involved with value-based care.

Let’s face it, healthcare organizations are already overloaded implementing MACRA—an initiative that has full bipartisan support and incentivizes physicians to work in alternative payment models. Additional mandatory programs add to this burden, especially since most of the bundled payment initiatives do not count as alternative payment models under MACRA.

Although CMS’s rule takes aim at bundled payment, it is important to note that this action does not indicate any shift by the administration—or the industry as a whole—away from value-based care. On the contrary, these changes are intended to provide a longer runway and more flexibility for providers as they work toward the transition.

An opportunity emerges
From a provider perspective, the proposed changes to bundled payment stand to be a positive development. Those organizations that were formally mandated to participate in these programs—and now are given a choice—can take the time to examine their financial situations and decide whether it makes sense for them to participate in the models. If they are doing well, for example, they may choose to continue their involvement. However, if they are losing money or struggling from a resource perspective, they can opt out. The give in the requirements allows organizations to ¬¬prioritize the value-based efforts they feel are most relevant to their patient populations—and the ones in which they believe they will be successful.

Coordinating care should remain a priority
Even though an organization’s involvement in value-based care may look different should the proposed rule be finalized, the push toward outcomes-driven payment remains in force—and as such, organizations will still need to improve care coordination across the continuum. Truth be told, because organizations are now being given the opportunity to concentrate on projects that make sense for them, we are likely to see increased attention around care coordination. Organizations must establish a robust infrastructure that supports real-time communication and collaboration between all members of a patient’s care team to ensure individuals receive appropriate, timely and proactive care while avoiding duplicative and unnecessary therapies. Given the increased flexibility, organizations can now consider exactly who the right entities are to have in their patient population’s wellness pathways and how they can bring those people to the table to discuss care. Instead of being mandated to identify the suitable providers for a certain pre-determined cohort, an organization can look at its high-risk populations and focus on identifying the resources in those areas specific to their needs. This will not only benefit healthcare organizations because they will be able to leverage customized care coordination solutions to better manage population health, but it will also help patients—offering them an easier way to navigate their care and interact with necessary providers.

Less could turn in to more
By reducing some of the requirements for bundled payment, the administration is encouraging healthcare providers to take a bigger leap toward value-based programs, and not just limit their focus to bundled payment. Going forward, bundled payment models will remain an option but will not take center stage in the effort to shift toward quality-driven reimbursement. The programs that continue will most likely include greater risk for providers, so they can qualify under MACRA as advanced alternative payment models.

It will be interesting to see whether the loosening of these requirements will accelerate organizations’ movement down the value-based care track. Ideally, providers will redouble their efforts in population health management, and care coordination will be a key element in that journey.

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