Henry Ford director says payments aren't truly bundled under BPCI initiative

Three of Detroit-based Henry Ford Health System's hospitals participated in the first phase of the Bundled Payments for Care Improvement initiative in 2013. However, all three hospitals have dropped out of the program, according to Crain's Detroit Business

The BPCI initiative is comprised of four broadly defined models of care, which link payments for certain services Medicare beneficiaries receive during an episode of care. Under the initiative, the episode of care includes services the patient receives during a 30- or 60-day period that are anchored to a set diagnosis-related group.

Hospitals that spend less than the target price for the episode of care keep the savings achieved. A hospital is required to repay Medicare if the costs exceed the target price. Payments are reconciled retrospectively in the first three BPCI models and determined prospectively in the fourth model.

Henry Ford rolled out the bundled payment program for lower extremity joint replacement in 2013 at three hospitals: Henry Ford West Bloomfield (Mich.) Hospital, Henry Ford Wyandotte (Mich.) Hospital and Henry Ford Macomb Hospital in Clinton Township, Mich.

David Nerenz, PhD, director of Henry Ford's Center for Health Policy and Health Services Research, told Crain's the program was not successful because one-third of total services and dollars under the program were controlled outside of the system.

"[Hospitals] don't have good controls on people for patterns of care," said Dr. Nerenz. "There is no way to force them where to go. It is difficult to succeed in the program."

Dr. Nerenz told Crain's the BPCI initiative is "more a shared savings program," than a bundled payment initiative.

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