Do Bundled Payment Models Pose Complications for Surgery?
By - Due to ongoing reforms in the healthcare industry, both federal government agencies as well as insurance companies are looking to renovate healthcare payment methods. Value-based care instead of fee-for-service is one example of the innovative payment models spreading throughout the healthcare field. Additionally, bundled payment models have taken over many aspects of the health insurance space.
According to the Health Affairs Blog, bundled payment models are essentially a system of single payments given to providers and clinics or hospitals for all of the services completed to treat a particular medical condition. Bundled payment models also require providers to assume the costs associated with treating preventable complications.
The services completed may consist of several practitioners and procedures conducted over a stretch of time. Earlier this year, the Centers for Medicare & Medicaid Services (CMS) are moving healthcare providers away from the fee-for-service model to bundled payment models instead, according to The Tennessean publication.
Instead of fee-for-service where each particular medical procedure is paid for along the continuum of care, bundled payment models involve a lump sum being paid to the medical facility and then divided among healthcare professionals based on their involvement in the patient’s care.
Currently, CMS is planning to move about one-third of Medicare reimbursements to the bundled payment system toward the end of 2016. Also, as much as half of Medicare reimbursements are expected to consist of bundled payment models in three years time.
This past summer, CMS also announced that it will be testing bundle payment models in 75 markets throughout the country, which would essentially consist of about 35 percent of the US population.
In one particular market, CMS will be looking to use bundled payment models among hip and knee joint replacement services. With more than 400,000 of these elective services conducted in 2013, the taxpayer cost was about $7 billion. It is predicted that bundled payment models will decrease these costs by a 2 percent annual reduction, which could save the entire healthcare industry as much as $700 million if the program is incorporated fully throughout the country.
With the ongoing reforms in health insurance, the federal government is working to develop greater consistency throughout the public sector when it comes to healthcare payment and development of health insurance exchanges.
The House Energy and Commerce Oversight Committee held a hearing yesterday on health insurance exchanges and examined the overall progress of requirements under the Patient Protection and Affordable Care Act, according to JDSupra. While there are proponents of the bundled payment system, there are also critics that show concern about the new payment model among hip and knee replacement surgeries. House members recently sent a letter to Acting CMS Administrator Andy Slavitt asking for a delay in the movement toward bundled payment among hip and knee operations.
“CMS recently proposed the Comprehensive Care for Joint Replacement Model (CCJR), a new episode-based payment model for lower extremity joint replacement (LEJR) that would apply to 75 Metropolitan Statistical Areas (MSA’s) for five years,” the letter stated.
“The CCJR proposed payment model represents a significant change for beneficiaries and providers because it constitutes the first mandatory Medicare episode payment model promulgated under CMS’ CMMI authority. Other CMS proposed models, including the Bundled Payments for Care Improvement (BPCI) on which the CCJR model was based, have all been voluntary. Given this substantial change for Medicare beneficiaries and providers, we raise certain questions and ask that you delay the implementation of the CCJR payment model for at least one year.”
“We are concerned that patients requiring higher-cost complex surgeries (such as hip fractures and ankle replacement procedures) or who suffer from multiple chronic conditions may find it more difficult to find hospitals willing to serve them, since the greater risk of complications or the higher level of post-acute care associated with their condition would be logically viewed by hospitals as increasing their risk under the proposed CCJR model,” the letter concludes.
