How a Los Angeles hospital mastered bundled payments: 6 steps

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Los Angeles-based CHA Hollywood Presbyterian Medical Center has significantly reduced readmissions, physician billing and spending on skilled nursing and inpatient rehab care by participating in CMS' Bundled Payments for Care Improvement Advanced program.

HPMC began participating in the BPCIA program when it launched in 2018 because its leadership thought payers such as Medicare would eventually require hospitals to be paid via bundled payments. 

In a March 30 Harvard Business Review article, Derek Haas, CEO of healthcare software analytics company Avant-garde Health, and Jamie Chang, MD, HPMC's chief clinical operations officer, attributed the medical center's bundled payment success to the following six steps: 

  1. Establish the right teams and management. HPMC made sure a new continuing care team, a set of multidisciplinary stakeholders, a hospital management team and board of directors were all working together on the project.

  2. Deploy comprehensive analytics. HPMC rolled out analytics to predict the bundle cost for each patient, compare predicted patient costs with target prices set by CMS after adjusting for HPMC patients' acuity and analyze the performance of post-acute providers that patients used. The medical center also provided physicians with scorecards that showed their patients in the program, their cost of care compared with the risk-adjusted target prices and quality metrics.

  3. Focus on post-acute care spending management. At the beginning of the program, HPMC launched a post-discharge clinic for patients but found it was underused and shifted to a home-based care model. The medical center also partnered with a company that alerts it when one of its BPCIA patients visits another hospital's emergency department.

  4. Improve end-of-life care. HPMC launched an inpatient hospice program and proactively educated patients about hospice care and its benefits.

  5. Align physicians' financial incentives with the medical centers' bundled payment success. Physicians shared in the money HPMC earned in the program but would not lose money if the medical center failed to meet CMS' spending targets.

  6. Ensure timely coding. HPMC reviewed every patients' documentation daily to ensure the code used to determine if a patient would be part of the BPCIA program would be identified right away.

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