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Value-Based Care News

Are Bundled Payment Systems Suitable at Cutting Medicare Costs?

By Vera Gruessner

- The bundled payment systems were initially developed in order to curb the rising costs of healthcare including Medicare spending. Providers and hospitals receive a single sum for providing a summary of services to treat one particular medical condition within bundled payment systems.

Bundled Payment Models

The Lewin Group released a report earlier this year that discussed how the Bundled Payments for Care Improvement (BPCI) program is meant to reduce the costs of Medicare while at the same time ensuring high quality care throughout the medical industry.

The bundled payment systems are initiated when an episode of care is provided during patient hospitalization. Currently, the Centers for Medicare & Medicaid Services (CMS) is testing out four different types of bundled payment systems. All of these programs, however, are dependent upon an inpatient hospitalization. This type of payment model is not meant for outpatient procedures.

“CMS is testing four models of bundled payments, three of which are being evaluated under this contract,” the report stated. “Providers and other entities may participate in BPCI in various ways that differ based on whether they are providing services that initiate a bundle, accepting risk, or providing services to patients in a BPCI bundle. The roles and responsibilities may overlap. An Awardee has an agreement with CMS and accepts risk under the initiative.”

The payment models CMS is testing out vary from hospitals and physician group providers to post-acute care providers such as nursing homes or inpatient rehabilitation centers. The Harvard Business Review discussed how the United States model of bundled payments differed from that of the Dutch system.

While the United States has a focus on enhancing the quality of care during inpatient stays and reducing hospital readmissions during the 90-day post-discharge timeline, Holland is focused on improving primary care in order to prevent the need for outpatient specialist care and hospitalizations. It would be useful if the United States considered some of the initiatives behind the Dutch bundled payment systems.

While bundled payment systems may affect the costs of Medicare spending, it is also important to ensure healthcare providers and physicians have the resources and the reimbursement necessary to manage Medicare beneficiaries with chronic conditions.

A survey from chronic care management company SmartCCM shows that 67 percent of the Medicare population consists of patients with two or more chronic medical conditions like heart disease, diabetes, or asthma, according to a company press release.

The research also mentions how caring for these type of patient populations requires extra time on the part of the physician. More than 60 percent of those polled stated that one of the biggest challenges with managing these Medicare beneficiaries is the amount of time needed to guide and reinforce the patients’ understanding of their medical care and treatment.

It is also troublesome to see that 46 percent of polled primary care doctors did not realize they could be reimbursed for non-face-to-face services provided to Medicare patients with multiple chronic medical conditions. At the beginning of 2015, the Centers for Medicare & Medicaid Services (CMS) introduced CPT code 99490 to reimburse physicians for the extra time, resources, technology, and staffing needed to manage chronic care services.

“Knowing that chronic care patients are a significant part of the population – and a group that has additional needs – it is critical that physicians find ways to regularly monitor their wellness and compliance,” Andrew Baumiller, CEO of SmartCCM, said in a public statement. “The insights from this survey show that physicians are deeply invested in patient care, but need assistance in implementing CPT code 99490. SmartCCM is providing a way for physicians to have more frequent conversations with their patients and to improve their outcomes.”


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